As Latinos struggle to get back on their feet following the latest economic recession, a group of Latino leaders want to offer a helping hand.
This week, Latino leaders with the National Association of Hispanic Real Estate Professionals (NAHREP) announced they’re teaming up with business leaders to launch the Hispanic Wealth Project.
The purpose of the project is to develop a long-term plan to help Latino families not only bounce back from the recession, but also triple their household wealth over the next 10 years.
Former U.S. Secretary of Housing and Urban Development Henry Cisneros will chair an advisory group of business leaders, entrepreneurs and celebrities that will develop the plan.
“Hispanics are a substantial and growing segment of our workforce and consumer base. The entire country benefits when the Hispanic community succeeds,” Cisneros said in a statement. “Now is the perfect time for a thoughtful and comprehensive effort to address this important issue.”
Cisneros and his advisory group will also do a thorough analysis looking into the asset composition of Latino households. They will also analyze other areas, including the impact of debt, the role of education, current access to government programs, and small business formation trends among Latinos.
The group is expected to complete the long-term plan later this year. Research reports by the University of Chicago will also be released, showing an analysis of the impact that the Hispanic Wealth Project could have on the overall U.S. economy.
Latinos still recovering from the recession
These efforts come at a time when Latinos are struggling to recover from the latest recession, which hit Latino families the hardest, according to a study by the Pew Research Center.
The study found that the median household wealth among Latinos fell from $18,359 in 2005 to $6,325 in 2009. That’s a 66 percent drop, the largest among all racial and ethnic groups. Meanwhile, the median household wealth declined 53 percent among black households and 16 percent among white households, according to the study.
Leaders with NAHREP pointed to other “huge setbacks” for Latinos caused by the financial crisis. They said labor sectors that employ large numbers of Latinos — such as construction, housing, hospitality, and domestic services — suffered the largest job losses.
The group also noted the unemployment rate among Latinos averaged a full 2 percent above the national average. The latest jobs report shows the Latino unemployment rate stood at 8.3 percent in December, lagging behind the national unemployment rate of 6.7 percent.
Furthermore, leaders with NAHREP stated that foreclosures had a big impact on Latino families, with some of them losing as much as 66 percent of their household wealth between lost homes and lost equity.
A study by the Center for Responsible Lending found that the home foreclosure crisis affected Latinos more than other groups between 2004 and 2008. According to the study, 11.9 percent of Latino borrowers lost their home to foreclosure, compared to 9.8 percent of African Americans, 6.6 percent of Asians and 5.1 percent of non-Hispanic whites.
The long-term plan by the Hispanic Wealth Project will have a big focus on homeownership, given the big impact foreclosures had on Latino families and also given how historically home equity has accounted for two-thirds of the average net worth of Latino households, according to NAHREP.
“NAHREP’s own mission for advancing sustainable Hispanic homeownership is in alignment with wealth creation,” Gary Acosta, CEO of NAHREP said in a statement. “However, a broad set of factors like small business growth, savings, education, income, jobs and financial literacy will also be addressed in this project.”