Thursday, January 23, 2003
Copyright © Las Vegas Review-Journal

Official urges more affordable housing

Cost not always problem for minority buyers, local expert says

Housing and Urban Development Secretary Mel Martinez on Wednesday rallied the National Association of Home Builders to keep working with the government to create more affordable housing, especially for minority families.

"Unfortunately, many Americans, especially minorities, have yet to enjoy the benefits of home ownership," he said at the Home Builders Convention at the Las Vegas Hilton. "Boosting homeownership among minorities is the right thing to do, and now is the right time to do it."

Martinez said that while three-fourths of white Americans are homeowners, less than half of Hispanics and blacks own their homes. He said the Bush administration plans to increase home ownership among minorities by 5.5 million families by the end of the decade. It will increase money for programs that provide affordable housing or help low-income families buy homes, he said.

But one local housing expert said later that while he agrees with Martinez's efforts, the secretary has not seen the whole picture.

"There is a myth that minority buyers can't afford housing," said Steve Bottfeld, executive vice president of Marketing Solutions, a Las Vegas-based housing research firm. "Minority groups shopping for new homes here are well-qualified financially."

According to Marketing Solutions surveys, nearly 30 percent of home buyers are minorities. Hispanics represented 13.8 percent of the home-buying market in December 2002, Bottfeld said.

But increasing insurance costs from "an incredible amount of construction defect litigation," he said, are driving up local housing costs.

"It's not necessarily a minority issue, but an affordability issue," Bottfeld said.

Martinez announced a proposal to add $200 million to the American Dream Downpayment Fund to help low- to moderate-income families become first-time homeowners.

He announced a proposed budget increase of $113 million for the HOME Investment Partnership Program to help nonprofit agencies, developers, private lenders and contractors build, rehabilitate or buy affordable housing for low-income families. The increase should bring Nevada's funding to $12.8 million for such projects, up from the $9 million the state received in fiscal year 2002.

Martinez said the administration wants to educate first-time home buyers about mortgage lending and educate the housing industry about preventing discrimination.

Michael Ponce, a Regional Emerging Markets consultant for Wells Fargo Home Mortgage, praised the secretary's efforts. He said many minority first-time home buyers in homeownership classes at Wells Fargo cite a lack of a down payment and bad credit as obstacles to buying.

"There are ever-increasing numbers of folks in these classes who are Latino, African-American and Asian," he said. "Just their attendance shows an obvious need for this type of education."