American Banker
By Orson Aguilar and Preeti Vissa

As long as most of us have been alive, owning a home has been a big part of the American Dream. If you ask renters or young people if they hope to own a home one day, the resounding answer will be yes.

These young dreamers might be dismayed at the growing movement to make America a nation of renters. Some conservatives and progressives have suddenly decided it’s time to rethink the ideal of homeownership — and by amazing coincidence, they seem to have had that brainstorm just as Latinos, African-Americans and Asians were beginning to get a piece of the action.

Time‘s Sept. 6 cover story, “Rethinking Homeownership,” bemoans “the dark side of homeownership … foreclosures and walkaways, neighborhoods plagued by abandoned properties and plummeting home values.”

The story declares flatly, “Homeownership has let us down.” It even blames homeownership for “the hollowing out of cities” and pretty much every wasteful, energy-inefficient aspect of the suburban lifestyle.

Time wasn’t the first to call for a retreat from homeownership. In a June 7 Wall Street Journal column, Richard Florida called owning one’s own home “overrated.” Currently about 67% of Americans own their homes, and Florida thinks we’d be better off at between 55 and 60%.

That, he claims, is the rate of homeownership in America’s “most economically vibrant regions.” Using his logic, high unemployment rates among Latinos and African Americans must also signal economic vibrancy.

Implicit in all this — not stated plainly in polite company, but lurking just under the surface — is the suggestion that things were fine until the wrong people started buying houses.

On right-wing blogs the accusation becomes more explicit, blaming government programs for putting people of color into homes. Yet former Federal Reserve Chairman Alan Greenspan himself has stated that the unregulated markets behaved in ways he never imagined.

Of course homeownership is not for everyone. But it was not homeownership that “let us down.”

What let us down were predatory and dishonest lending practices that made homeownership a casino game.

This is why entire financial institutions such as Lehman Brothers and Bear Stearns collapsed.

Meanwhile, firms such as Goldman Sachs encouraged investors to purchase mortgage-backed securities even as they were betting that the housing market would collapse.

Federal Reserve statistics show that communities of color were victims, not perpetrators, of the mortgage disaster. Among buyers with the best credit ratings — FICO scores of 720 or higher — 13.5% of Latino borrowers and 12.8% of African-American borrowers received high-cost loans, compared with only 2.6% of white borrowers. Translation: people don’t get equal treatment simply because they have the same income or FICO score.

The question is not whether we should be renters or homeowners. The question is how we can go back to the original idea of homeownership: seeing a home as the place that protects your family, not something you invest in for a quick flip.

Numerous studies demonstrate that homeownership, when done right, leads to greater family stability, higher voting rates and better health. It helps people accumulate wealth and assets that can be passed on to their children.

And people of color simply have not had as much access to this bedrock source of financial stability as whites.

According to a 2009 tally, while 74.9% of whites were homeowners, only 59.1% of Asians, 48.9% of Latinos and 47.5% of blacks owned their own homes. Not surprisingly, for every dollar of wealth the average white family owns, families of color have 15 cents.

Some, it appears, want to keep it that way.

The next time somebody proclaims that we need more renters, ask them, “How many homes do you own?”

Orson Aguilar is executive director and Preeti Vissa is community reinvestment director of the Greenlining Institut