Image by Cliff licensed under Creative Commons.

Most Americans’ biggest source of wealth is their home, but unfortunately homeownership rates are not standard across demographic categories. Thanks to the Urban Institute, we now know that Limited English Proficiency (or LEP) depresses homeownership, even when race, income, and other variables are accounted for. The question is why.

Individual and state-sanctioned racism has negatively impacted minorities

Racial minorities have lower rates of homeownership than white Americans. In the first quarter of 2017, homeownership rates for whites was 71.8%. The rates for Blacks and Hispanics was substantially lower — 43.4% and 46.6% respectively.

Although we know that there are disparities in homeownership rates across racial and ethnic groups, there are still debates about the exact causes behind them. In African American communities for example, racism, legacies of redlining, and unfair mortgage practices all play a role, but the order and combination often varies across space.

Hispanics also have lower homeownership rates than whites. Studies suggest that for Hispanics, a lower median age, limited education, and immigration status all depress homeownership, but the role of different variables is not consistent across the country.

Language proficiency is also a factor

The Urban Institute’s new study points to the role of a rarely-considered variable — limited English proficiency. The top five languages spoken by people with LEP are in the US are Spanish (39.1 million speakers), Chinese (3.2 million), Vietnamese (1.5 million), Tagalog (1.7 million), and Korean (1.1 million).

Although the percentage of people with limited English proficiency is higher for Chinese, Vietnamese, and Korean speakers, the sheer size of the Spanish speaking population — 10 times larger than the second-largest LEP group — means that the majority of LEP speakers speak Spanish (16.3 million).

Previous studies have noted that limited English proficiency depresses homeownership rates. However, Urban Institute’s study also finds that LEP is more influential than previously thought. That is, even when you control for differences in race, income, and age, LEP accounts for a significant portion of the disparity in homeownership rates.

Why does language matter so much?

The Urban Institute’s study doesn’t offer any concrete explanations for why LEP plays such an important role in depressing homeownership rates. Its goal was to account for the role of LEP. However, we can make some reasonable speculations for why LEP matters. Let’s look at two potential explanations.

First, applications for mortgages contain a lot of technical language. People with LEP often have English-speaking family and friends who can help them to fill out applications for driver’s licenses, banks accounts, etc. However, even native speakers often find mortgage applications overly technical and confusing. The networks people with LEP rely on may simply not feel up to the task of a mortgage application.

A second reason may be historical. Many Spanish-speaking countries in Latin America have recent histories with dictatorship. In authoritarian regimes, signing paperwork can be dangerous. Signatures can be used for nefarious ends — to repress opponents, cement support, or coerce the ambivalent. Although authoritarianism is on the wane throughout Latin America, social trust (among fellow citizens and in the government) tends to lag behind democratization.

In the Washington region’s inner suburbs where people with LEP are concentrated, boosting homeownership could not only provide a motor to the middle class for individual residents, but could also help stabilize areas often marked by transience.

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Carolyn Gallaher is a geographer and associate professor at American University.  Her research interests include gentrification in DC, the emergence of “ethnoburbs” in Maryland and Virginia, payday lending, and tenant empowerment.  Previously, she studied the militia movement in the US and Loyalist paramilitaries in Northern Ireland.  She lives in Silver Spring with her husband and son.