As St. Louis leaders are looking to turn the city into the fastest-growing metro region for immigrants in the next few years to spur economic growth, a new report shows that a majority of the city's foreign-born residents don't own their own homes.
The Immigrant Housing Project's report, researched by a coalition of local organizations, finds that less than 40 percent of St. Louis' foreign-born community are homeowners, a far lower rate than native-born residents (at 46 percent). It's also a lower rate compared with immigrants across the country (52.4 percent).
Foreign-born residents make up only 6.83 percent of the city's population, or about 21,700 people, and in fact, recent Census data show the city is losing immigrants. But recent reports say having more immigrants actually helps a local economy, contradicting claims that an influx drives down wages and takes away jobs. Likewise, Elisabeth Risch, director of research and education at the Metropolitan St. Louis Equal Housing Opportunity Council, said increasing homeownership among those here benefits the city.
"It helps build the community," she said. "We want people to invest in our neighborhoods and one way to do that is through encouraging access to housing, to home-ownership and opportunities for that."
The report also finds a significant difference in the homeownership rate by citizenship status. Only 23 percent of foreign-born St. Louis residents who are not U.S. citizens are homeowners, compared with 65 percent of naturalized citizens. Interestingly, that's a higher rate than that among native born residents.
Risch said many barriers to homeownership exist for immigrants, including limited access to mortgage loans. Using 2013 data from the Home Mortgage Disclosure Act, the report found large disparities in the number of mortgage applications made by minorities, which would include many foreign-born residents, compared with white residents.
More significantly, the denial rate for white St. Louis residents who applied for mortgages (14.8 percent) was significantly lower than that for black (33.66 percent), Hispanic (20.5 percent), and Asian (25.36 percent) residents. The report notes that while the HMDA data does not provide data on applicants' credit-worthiness, such as credit scores or debt-to-income ratios, the disparity in denial rates between minority and white borrowers is "concerning."
"You also need things like checking account, savings account, a credit score, so not understanding and participating in that system is one barrier that's limiting access currently," Risch said.
Meredith Rataj of St. Francis Community Services' South Side Center said many of her clients in the Amigas Latinas program just don't know how to go about buying a home.
"Many of them have lived here for several years and they've been renting all this time, and they really want to make an investment in their communities, they just don't know how," she said. "Some of them with documentation status have a more difficult time accessing homes or products to be able to buy homes."
That's why Rataj's organization, along with Risch's and several other groups, are creating an Immigrant Housing Center, to be housed at St. Francis' south side location. The new center will help immigrants build credit, access savings accounts and down payment assistance, and provide financial education.
In addition to St. Francis and EHOC, several other groups will bring their expertise to the center: Missouri Immigrant and Refugee Advocates, Beyond Housing and the International Institute of St. Louis. The collaboration will provide immigrants with:
- a resource connection program to directly link home-buying assistance services to immigrant populations in the city
- first-time homebuyer education and housing counseling offered in a variety of languages. The report notes such programs are shown to help participants be more likely to "make payments on-time, refinance their mortgages in the future, and to pay the loan off before the term ends." But most of these resources in St. Louis are currently only offered in English with limited other languages available.
- increase access to Individual Development Accounts, or matched savings programs. The report said "many studies have demonstrated that IDAs are effective at positively influencing the long-term savings behavior of the participants." But currently in St. Louis, the availability of those programs are limited and may have additional barriers for undocumented immigrants. The Center hopes to encourage more financial institutions to offer these services with "inclusive identification policies."
- down payment assistance programs, which will help families without the initial capital to buy a home. The report cites a Census Bureau study that found "by providing a one-time $10,000 subsidy, five million low-income and minority families would qualify for loans to purchase a home." But, as the report notes, many of the current down payment assistance programs come from federal sources that require documentation that not all immigrants have, though there are some that do in Missouri. The Center aims to increase the number of financial institutions that offer these programs to immigrants, regardless of documentation.
- credit builder and homebuyer products, such as small low-limit loan products and mortgages. Risch said refugee populations often "do not have traditional forms of U.S. credit and have not built up a credit history," making it difficult to obtain loans and home mortgages. Moreover, many financial institutions' homebuyer and mortgage products "are often tied specifically to social security numbers," she said, making it difficult for immigrants who are not U.S. citizens. The Center also wants to grow the availability of these options for all immigrants.
The issue of citizenship is at the crux of several barriers to homeownership among immigrants. But David Nehrt-Flores of Missouri Immigrant and Refugee Advocates said until nationwide immigration reform occurs, foreign-born residents in St. Louis have a right to housing, regardless of documentation.
"Our foreign born community - they are here, they've been here for a number of years, now it's time to build those opportunities of home ownership for them," he said.
Speaking in Spanish, Rita Cabrera of Dutchtown, who attends Amigas Latinas at St. Francis' center, said having a place like the Immigration Housing Center will help immigrants get over any "embarrassment" or "fear" they might have in trying to get information about becoming a homeowner.
"We shouldn't be afraid in asking how we can buy a house, because - are there people who can help us? Yeah, there are," she said.