Home Ownership is the Key
I don’t know the men who stopped traffic and jumped out of their car and shot at the white truck. Click here to see the shocking video. But I bet they were not homeowners. Cause homeowners don’t act like that. And therein lies the simple answer to crime. Create more homeowners. Simple to say. But as the saying goes “We got some fixing to do.” But here’s the shocker. Your attitude is possibly the biggest thing that needs to get fixed. But that’s part of the real solution for crime.
If you are an American, you believe certain stuff. American narratives. America is the greatest nation in the world. American exceptionalism. Americans live better than everywhere else. Love it or leave it. Baseball, 4th of July and apple pie. But built into these narratives are certain biases. Most black people are criminals is one. Before you brush that off, just think about the mass incarceration of African Americans. And you think, well they surely did something wrong to land in jail. That narratives is not only false but makes crime worse. Black people are not natural born criminals.
See I told you about your attitude needs fixing.
In contrast, American disparities are reality. African Americans are substantially less wealthy and healthy. African Americans earn on average about 45% of what White Americans earn. Blacks die 5 years younger than whites on average. And when they die, on average whites transfer over $175,000 in assets to the next generation while blacks often only leave debt. White families are twice as likely to receive an inheritance as black families, and that inheritance is nearly three times as much. The source of the inheritance is normally real estate. The parents’ home. So black people earn way less, die much younger and leave little behind.
As we search for a real solution for crime, we see too many Black families are stuck in generational poverty. Nearly every White family has a generational head start. Home ownership is the biggest steppingstone. Home loan discrimination is real. Today, African Americans are denied loans at 50% higher rates than whites of equal financial and credit worthiness. We have all heard about past redlining. Lenders circled black neighborhoods on a map. All loans from all applicants in theses areas were denied. African Americans have been denied home ownership for centuries. But even in progress there is discrimination.
A recent study by the University of California Berkley found discrimination in loans that were approved.
“The analysis found significant discrimination by both face-to-face and algorithmic lenders:
- Black and Latino borrowers pay 5.6 to 8.6 basis points higher interest on purchase loans than White and Asian ethnicity borrowers do, and 3 basis points more on refinance loans.
- For borrowers, these disparities cost them $250M to $500M annually.
- For lenders, this amounts to 11 percent to 17 percent higher profits on purchase loans to minorities, based on the industry average 50-basis-point profit on loan issuance.”
These practices exacerbate the generational stresses on African American families. The $550M extracted by these predatory loans enhance white wealth today. Current ratepayers not only have less money, but their ability to transfer wealth is diminished.
Why this matters Cause we Need a Real Solution for Crime
The biggest asset most people have is their home. Literally for centuries blacks were denied home ownership. There was no wealth transfer between generations. And for centuries white families have transferred wealth. Black families have been renters. Renters despite earning enough to buy a home.
The link between generational poverty and crime is clear. Generational renters are less stable than families with multiple homeowners. Generational poverty contributes to crime. 85-90% of violent street criminals do not own their homes. Homeowners are gainfully employed. They must fix their homes when something breaks. You need a job to pay plumbers, painters and electricians. Homeowners directly pay property taxes. So they care about government efficiency. The vast majority of renters are good people. But the vast majority of violent street criminals are birthed in the rental pool.
RELATED: Out of Control Juvenile Crime
To reduce violent street crime, we must first create more homeowners. Read next week to see how to do this. We really have a real solution for crime.
#Crime in NOLA