Low-income homeownership for intergenerational mobility - the role of intermediaries in risk mitigation

Balachandran, Sowmya

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https://hdl.handle.net/2142/112969 Copy

Description

Title

Low-income homeownership for intergenerational mobility - the role of intermediaries in risk mitigation

Author(s)

Balachandran, Sowmya

Issue Date

2021-07-14

Director of Research (if dissertation) or Advisor (if thesis)

Greenlee, Andrew J

Doctoral Committee Chair(s)

Greenlee, Andrew J

Committee Member(s)

• Chakraborty, Arnab
• Edwards, Mary
• Cromley, Jennifer

Department of Study

Urban & Regional Planning

Discipline

Regional Planning

Degree Granting Institution

University of Illinois at Urbana-Champaign

Degree Name

Ph.D.

Degree Level

Dissertation

Keyword(s)

• Housing
• Black Homeownership
• Community development
• Non-profits
• Empowerment

Abstract

Homeownership is an important marker of achievement and personal wealth for most Americans. It provides a sense of stability and is an essential conduit through which families access opportunity in the form of schools, jobs, urban services, and communities (Rohe et al., 2001). For low-income and minority households, including immigrant families, the idea of owning a home is also a marker of territorial rights and economic citizenship (Drew & Herbert, 2013; Grinstein-Weiss et al., 2011; Reid, 2014; Rohe & Lindblad, 2014). However, the complexities of risk-based pricing in mortgage markets, entrenched space and social stratification in city regions, remnants of historical disadvantage for marginalized racial groups, and the inherent risks of poverty make it difficult for low-income and minority households to reap the benefits of homeownership in ways White and higher-income households in better-quality neighborhoods do. Low-income households require deep subsidies, engaged support, and intermediation not just in accessing and sustaining homeownership but also in negotiating the broader aspects of urban living, such as sustaining through daily life, engaging productively in labor markets, and recovering from destabilizing life events like job loss, change in family configurations and unforeseen expenditure. My dissertation contributes to the discourse on housing and poverty-risk mitigation by providing essential insights on the bottom-up, multi-faceted and sustained facilitation provided by non-profit institutions in the Chicago metropolitan region for low-income and historically disadvantaged communities. I answer the following three critical questions to explore the breadth of institutional support available to low-income and minority households. What types of institutions form the geography of intermediary support, and what are their areas of work? And how does access to intermediary institutions impact low-income homeowners? How are these socio-spatial relationships constituted? I approach these questions qualitatively, quantitatively, and through a mixing of methods. The qualitative component consists of a multiple case study research entailing in-depth interviews of 22 respondents, participant observation, and study of annual reports and policy documents of intermediary organizations in the Chicago city region. The qualitative assessments then feed into a quantitative spatial evaluation of intermediary locations and a study of outcomes from the home loan process using the Home Mortgage Disclosure Act data for 2019 and a comparative analysis across 2011, 2015, and 2019 for low-income households. My research makes four main contributions for urban theory, research, and practice: 1) it deciphers the complexity of poverty risk and debt-risk in a neoliberal housing policy environment for low-income and marginalized groups, 2) it throws light on the influence of hitherto unexplored community agents and their practices in influencing social and economic outcomes for low-income communities, 3) it provides a new understanding of urban spatial opportunity through community-based lenses and 4) it reinforces the need for mixed-methods research in informing planning and policies for urban development. Structures of urban spatial opportunity are often associated with goods, institutions, and peer influences that accompany white affluence in the United States. However, in reality, low-income and historically marginalized communities often require more powerful intermediation to navigate the inequitable terrain of labor, credit and housing markets, as well as political arenas from which to make their voices heard. For low-income and marginalized households, the importance of stable housing and access to wealth through property ownership is also far more significant. It offers them the ability to exercise their rights to territory and citizenship and alters life chances and socio-economic outcomes over generations. Through my research, I provide compelling evidence of the need to develop community institutions towards the restitution of racial and spatial justice. Further, I show how state-led housing policy and low-income homeownership support can reduce financial and non-financial risks for households with intersectional attributes of race, gender, family composition, and citizenship status through proactive community engagement. In my analysis of tangible effects of intermediaries using the Home Mortgage Disclosure Act data, the results show that proximal access to intermediaries does not move the compass in enabling improved access to mortgage loans or loans of higher quality. Property values, lien status, and financial characteristics of the applicant are the strongest drivers of outcomes in both cases. Minority status is an essential adverse driver of access to mortgages. While these are crucial measures of success, preliminary insights from a qualitative assessment of households show that low-income households have unconventional trajectories for building wealth through homeownership and make unexpected tradeoffs to hold on to the home asset. Building wealth in the home and cashing out the equity they have built from time to time is key to low-income households’ finance management strategy and, at the same time, the result of inadequate knowledge or availability of other leverageable asset-building mechanisms. Also, some of the valuable support intermediaries provide during destabilizing circumstances do not fit conventional definitions of success. I conclude by calling for more consistent and reliable housing policy support across space and time for the different stages in the lifecycle of homeownership and continued investment in community institutions' building capacities, especially in disadvantaged neighborhoods.

Graduation Semester

2021-08

Type of Resource

Thesis

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Copyright 2021 Sowmya Balachandran

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