According to a report published by the Portland Housing Center (PHC), a nonprofit organization that serves, consults and educates first time homebuyers, 35 percent of African-Americans in the Portland area own a home, whereas 65 percent of Whites do.
The report notes that during the 2008-09 recession participation in services offered by PHC dropped considerably. As the turnaround began, interested homebuyers returned to PHC for services. But by 2010, it was clear that African-Americans were not rejoining the market at rates near that of other races and ethnicities. In response, PHC set strategic goals for increasing African-American participation in its financial services for potential homebuyers.
“Getting Your House In Order” (GYHIO) is a model for African-American financial education intended to increase participation in PHC services and raise rates of homeownership. This innovative program takes a novel approach: teaching financial fitness through a culturally specific lens that incorporates African-American history, culture, experience and community into course materials.
Associate Professor of Urban Studies and Planning, Dr. Lisa K. Bates partnered with PHC and its African-American Advisory Committee to assist with the development and evaluation of a pilot program. Together, Dr. Bates, Dr. Rhea Combs (a curator at the Smithsonian’s National Museum of African-American History and Culture), and PHC worked with participants and the African-American community to determine what kind of outreach and educational programs would be of greatest value to them.
Participants in the GYHIO program learned about the African-American community’s experiences with money and financial institutions—histories of discriminatory and predatory practices, community distrust of banks and similar organizations, the ways social networks at times adversely influence personal money management decisions; how to build a strong credit rating; and what to do to achieve financial goals, all within an African-American sociocultural and cultural-historical context. The theory behind the class is an understanding of the influences of stress and uncertainty related to suspect or actual racial stereotyping on financial behaviors and decision making, and the benefits of self-efficacy in achieving personal goals.
“One of the main points of the class was to have participants talk about their experiences with these things,” said Dr. Bates. “So people in the class would talk about experiencing negative emotions such as stress or anxiety when confronted with negative or racist stereotypes. The goal was that by sharing their experiences they would learn to recognize when such feelings were affecting their decision making abilities. They also talked about the economic history of African-Americans. The financial survival mechanisms African-Americans have used over time. Family and community experiences. The point was to look at these things explicitly and consciously and ask which were promoting positive practices and behaviors and which were not.”
In each of the six cohorts of GYHIO courses Dr. Bates tracked and collected data on, participants came to understand how personal experiences and sociocultural and cultural-historical experiences influenced their financial fitness. And as research shows that African-Americans often learn about finances and money management from their families and social networks, participants examined the financial lessons they learned from family and those they taught their children and grandchildren. They considered how those lessons were taught, learned and whether they had harmful or beneficial outcomes. Participants practiced making sound financial decisions, set goals, and learned how to make sense of their personal finances. Throughout the course, participants were encouraged to share their experiences and learn, not just from instructors, but from one another.
As Dr. Bates noted in a recent presentation sponsored by the REACH Community Development organization and PHC, data she and her partners at PHC collected indicate that the program has been a remarkable success. 97 percent of participants continued using PHC’s financial services. The average increase in credit scores of participants was 24.5 points. Savings increased. Debt decreased. And among the participating 104 households, 11 achieved homeownership. With the success of the GYHIO pilot program, Dr. Bates said that she and the PHC believe it could be implemented nationwide through NeighborWorks, a national network of more than 240 community development and affordable housing organizations of which PHC is a member. Dr. Bates also noted that PHC is currently developing a Latino oriented version of the program.
Increasing homeownership in minority populations will help combat poverty and inequity in the U.S. For many, much of their wealth is in their home. And homeownership is directly related to an individual’s or family’s net worth. According to Dr. Bates, homeownership is the primary vehicle for families to pass wealth from one generation to the next. By encouraging first time buyers to purchase homes, helping them get into those homes and showing them how to improve their financial fitness, organizations like the PHC along with researchers and urban planners like Dr. Bates, are working to create a more balanced distribution of wealth, security and wellbeing for all.
Authored by Shaun McGillis
Posted August 4, 2014