HUD chief seeks broadband access for the poor
23rd February 2015 · 0 Comments
By Freddie Allen
NNPA Washington Correspondent
WASHINGTON (NNPA) – Julián Castro, the secretary of the Department of Housing and Urban Development, wants to provide broadband access to public housing residents in an effort to increase socioeconomic mobility among poor and low-income families.
“We think [broadband access] is important because the world requires a connection to the Internet now,” said Castro.
He said that HUD wants to launch the program, which is still in its early planning stages, in 20 major metropolitan areas working with private sector telecommunication companies to wire the communities or provide wireless in a free or very low-cost way.
Castro said that in the vast majority of public housing communities, there is no connectivity.
According to a 2014 report by the Pew Research Center, most households with incomes below $20,000, “do not have an internet subscription for a computer, cell phone or other device, though they may have free access at a local library or elsewhere.” Roughly 25 million American households, “have no regular internet access at all, either at home or elsewhere.”
Sixty-two percent of Black adults have broadband access at home compared to 74 percent of White adults. A gap of 12 percent. The digital divide between Black and White adults 65 and older leaps to 21 percent (30 percent vs. 51 percent who have broadband at home).
A 2010 Pew survey revealed that Americans feel that people that don’t have broadband access at home “are at a major disadvantage when it comes to finding out about job opportunities or learning career skills, or when getting health information, learning new things for personal enrichment, and using government services.”
Castro said that a respectable number of people have Internet connection through their cell phone, but it’s not the same as having that access in your home where it’s more stable and you can do homework and other things that people generally don’t do on their phones.
Castro attended junior high school with a lot of kids that lived in public housing and his father also lived in public housing at different periods in his life.
“I know that the folks who live in public housing have the same aspirations and the same potential as anybody else,” said Castro. “And here at HUD we’re going to do every single thing that we can to make sure that they can be a part of our American success story.”
That American success story includes increasing homeownership to build wealth from one generation to the next and to increase upward mobility, and that’s a part of HUD’s long-term mission.
The department’s most immediate challenge, however, is addressing disparities in the rental market.
Blacks not only face discrimination in the rental market, but they also are treated differently than whites when they look to become homeowners.
According to a 2013 report by the Department of Housing and Urban Development, “Black renters who contact agents about recently advertised housing units learn about 11.4 percent fewer available units than equally qualified whites and are shown 4.2 percent fewer units.”
Blacks are also offered shorter leases and told that background checks are required more often than white renters.
Blacks faced even greater discrimination when attempting to buy a home. When Blacks contacted agents about recently advertised homes they were shown roughly 18 percent fewer homes than white homebuyers. During the housing crisis, minorities were often offered subprime loans products, even when they qualified for better loan conditions.
“Too many times African-American families don’t get the same opportunities to evaluate potential homes or rental properties just because of the color of their skin and we want to root that out,” said Castro.
The United States Census Bureau reported that the homeownership rate for Blacks was 42.1 percent in the fourth quarter of 2014, the lowest of all racial groups. Whites had the highest homeownership rate at 72.3 percent. The homeownership rates for both groups were down from the same period in 2013.
Castro said that the bulk of wealth of African Americans and Latinos is tied up in their homes.
Biniam Gebre, the acting commissioner for the Federal Housing Administration (FHA), said that even though homeownership rates have fallen, people are still creating families and having babies and that’s creating pressure on the rental market which, in turn, is causing the rise in rental costs.
“The rental market and the homeownership market are inextricably linked,” said Gebre. “You have to deal with both problems you just can’t deal with one.”
In an effort to make homeownership more affordable, Castro said that the administration is working to reduce mortgage insurance premiums, a fee that skyrocketed 145 percent ($1,600 more annually), since the housing crisis began in 2007.
“That has a significant negative impact on the ability of folks with modest means in particular communities of color to be able to afford to buy a home,” said Castro.
Castro said that reducing the premium would allow 250,000 more borrowers to afford a home through the FHA and the average borrower will save about $900 every year.
“The [Federal Housing Administration] FHA continues to play a vital role in creating a ticket to middle class and wealth creation through homeownership,” said Castro.
Castro said that HUD has also made significant investments in presale counseling, homeowner counseling, and financial literacy to help homebuyers understand the real cost of homeownership.
Castro said that it’s the combination of providing housing and providing the opportunity that excited him the most about his role as secretary of HUD, a post he’s held since July 2014. The San Antonio, Texas native said that the investments that are made across HUD make a difference in creating more opportunity for all Americans and those opportunities are particularly significant in the African American community.
“We can’t truly have a nation of opportunity until everyone, no matter their background or the color of their skin, has the chance to fully enjoy the same opportunity,” said Castro. “And we’re not there yet.”
This article originally published in the February 23, 2015 print edition of The Louisiana Weekly newspaper.
