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Article Excerpt
Chinese homeownership rates in the Los Angeles Consolidated Metropolitan Statistical Area adjusted by socioeconomic and housing market characteristics are, on average, 18 percentage points higher than those of native white households. This finding runs contrary to most immigration literature, which suggests that immigrants usually lag behind the host society in measures of economic well-being. This study focuses on two additional factors, which most economic studies of homeownership choice ignore, that may play a role in helping Chinese households achieve high homeownership in ways that other immigrant groups do not. The results of this analysis find that the high homeownership rates cannot be explained by the English skills of households. The cultural influence of homeowning peers may have partially contributed to the higher homeownership of Chinese households. While living in ethnic Chinese communities lowers homeownership rates, in general, it helps improve the likelihood that Chinese immigrants will own a home. Finally, we find that there is great diversity among Chinese subgroups with respect to their likelihood of owning a home, but very little diversity with respect to the education and income level of Chinese households across subgroups.
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In recent years, issues of the importance of and access to homeownership have triggered substantial academic research and policy debate. The research on access to homeownership (see, e.g., Coulson 1999 and Gyourko and Linneman 1996) is, in part, motivated by sizable and persistent gaps in homeownership attainment between white and minority households. (1) While the U.S. homeownership rate rose perceptibly over recent years to a record 67.1% in mid-2000, Simmons (2001) reports that the longstanding white-minority homeownership gap of about 28 percentage points was little changed. These facts are particularly troubling given recent research demonstrating positive socioeconomic and community impacts associated with homeownership (see, e.g., Green and White 1997 and Haurin, Parcel and Haurin 2002).
Population changes in the past decade signal a large increase in the nonwhite population. Results from the 2000 Census in the United States suggest that Latino populations have increased by 58% and Asian populations have increased by about 76% over the past decade. (2) Within the Asian minority group, Chinese immigrants now well exceed two million--the largest Asian immigrant group in the United States (U.S. Census Bureau 2002). More recently, Mainland China has become the second largest immigrant-sending country next to Mexico (Office of Policy and Planning 2002). These changing demographics have the potential to create and adverse impact on overall homeownership rates because ethnic minorities have homeownership rates that are much below that of white, non-Hispanic households (see, e.g., Alba and Logan 1992, Krivo 1995, Coulson 1999, and Painter, Gabriel and Myers 2001). Thus, it is critical to understand the factors that lead immigrants to own homes and to investigate under what conditions successful transition into homeownership has been accomplished.
Unlike evidence shown in Bianchi, Reynolds and Spain (1982) and Wachter and Megbolugbe (1992) concerning homeownership gaps between African Americans and whites, recent studies by Coulson (1999) and Painter, Gabriel and Myers (2001) suggest that the national gaps between whites and Latinos and Asians are largely due to income differences, residence in high-cost metropolitan areas and the high mobility rates among recent immigrants. Two recent studies--Painter et al. (2001) and Painter, Yang and Yu (2003)--of large gateway metropolitan areas suggest that there exists very little differential between Asians and whites in the likelihood of homeownership. Further, Painter, Yang and Yu (2003) found that Chinese households were much more likely to own homes than whites and Asians other than Chinese.
This finding would be surprising to proponents of the traditional assimilation literature (see, e.g., Gordon 1964 and Alba and Nee 1997), as their theory is oriented to explaining the process of immigrant adaptation into society as a function of catching up to the status of native white households. Recent Chinese immigrants, rather than climbing up the socioeconomic ladder over time, may have achieved a socioeconomic status comparable to that of native-born whites soon after arrival. While higher Chinese homeownership rates are surprising, Logan, Alba and Zhang (2002) propose a conception of emerging ethnic communities among immigrants that may provide insights into the mechanism for why Chinese homeownership rates are so high. This notion of immigrants choosing to live together even with elevated socioeconomic status may suggest that these groups have unique socioeconomic ties and are opting for close access to ethnic resources rather than immersing into white majority neighborhoods through spatial assimilation. Further, if groups are choosing to live together, and if these groups have both high initial preferences for homeownership and large ethnic resources for sharing, there could be peer influence among Chinese households to buy homes that could greatly reinforce homeownership attainment among these households (Glaeser, Sacerdote and Scheinkman 1996 and Manski 1995).
The aim of this paper is to better understand the role that assimilation, ethnic concentration and nativity play on the homeownership rates of Chinese households. We proceed by testing four hypotheses using 1990 Public Use Microdata (PUMS) data from the Census. First, we examine the role of language proficiency, as an indicator of assimilation, in enabling households to own a home. Second, we examine the role of peer influence on owning homes among Chinese households in communities with a large presence of Chinese and relatively high Chinese homeownership rates. Next, we examine the role of different nativities among Chinese households to examine if households coming from places with different national wealth possess different likelihoods of owning a home. Finally, we examine the role of socioeconomic status and time since first immigration and their interaction with nativity. This enables us to isolate the factors that may have led Chinese households to be so successful in achieving high homeownership rates.
Past Research and Theory
Assimilation
Traditionally, research on homeownership choice has not focused on immigrants, and therefore it has neglected the investigation of factors that may play an important role in determining the likelihood that an immigrant will own a home. Two potentially important influences on immigrant homeownership are the extent to which an immigrant household has been assimilated into the host society and the extent to which peers influence their decision making and potentially provide information or resources to the household.
As revealed in Gordon (1964) and Alba and Nee (1997), assimilation theory describes a straight-line process of adaptation and acculturation, leading immigrants to a state of structural integration into the host society. These theories were based primarily on the experience of earlier European immigration. Many scholars have challenged the validity of this "melting pot" theory of assimilation in the contemporary context. Immigrants after 1965, mostly coming from Asia and Latin America, have been characterized by their drastic diversity of socioeconomic backgrounds and national origins. Instead of convergence over time and the forming of a unified group, Portes (1995) shows that many recent immigrants have experienced different adaptation processes, and have sometimes even shown a pattern of perpetual ethnic differences. As indicated in Zhou (1997a), the literature has recognized the importance of contextual effects in immigrants' assimilation, which underpins socioeconomic stratification in the host society. The high homeownership attainment of Chinese immigrants may be an additional case for the notion of "segmented assimilation" (Portes and Zhou 1993, Zhou 1997b).
Assimilation is manifested in many socioeconomic characteristics, such as cultural norms, beliefs and behavior patterns. In practice, English proficiency has been widely used as an indicator of the assimilation process (see, e.g., Alba and Logan 1992, Krivo 1995, and Myers and Lee 1998). Assimilation theory suggests that immigrants with higher English language ability are able to adapt better to the host society. English language ability is also a necessary skill for communicating with other people and negotiating the transactions necessary for purchasing a home. Consequently, English language ability should be positively associated with spatial assimilation, socioeconomic well-being and homeownership attainment (Alba et al. 1999, Carliner 2000, Fong and Kumiko 2000, Krivo 1995).
Ethnic Concentration
While many recent studies have revealed ambiguities in assimilation theory with respect to the socioeconomic outcomes of assimilation, few have focused on the role of ethnic concentration on homeownership attainment. On the one hand, forced concentration may restrict housing availability for certain ethnic groups, as discovered in Galster (1987), White (1987), Massey, Gross and Shibuya (1994) and Flippen (2001). Toussaint-Comeau and Rhine (2000) find that residence in an area dominated by ethnic enclaves leads to lower homeownership rates in that area. (3) Concentration has also been shown to lead to inferior labor market outcomes (see, e.g., Borjas 1998, 2000) and less socioeconomic mobility (see, e.g., Massey and Denton 1987, Allen and Turner 1996, Alba, Logan and Stults 2000).
On the other hand, concentration may provide better access to ethnic resources, such as an informal financial system, credit sharing and neighborhood support as noted in Fong and Gulia (2000) and Schoeni, McCarthy and Vernez (1996). Further, contextual effects, as discussed by Manski (1995) and others, may arise among ethnic groups that reinforce strong initial preferences to own homes. Haurin, Dietz and Weinberg (2003) provide a thorough review of the effects of neighborhood homeownership rates, through social interactions, on the residents of a community and an adjacent community. Via feedback mechanisms or social multiplier effects, neighborhood context can strengthen mutually supported social behavior such as religion, poverty, or homeownership attainment. This conception of contextual effects presents additional explanations of peer influences on homeownership attainment, particularly within immigrant communities whose residents share cultural preferences and a social network. If these initial preferences for homeownership were particularly strong, then peer influence among some groups could thus lead to higher homeownership rates than in native white populations. In other words, if the community is particularly predisposed to homeownership, then residence in immigrant communities may bolster homeownership rates of immigrants.
Chinese Subgroups
A final issue relevant for understanding the homeownership rates of Chinese households concerns the heterogeneous background of Chinese immigrants in the United States. The Chinese population in the United States has experienced significant changes in composition with respect to national origin and reasons for immigration. For example, while immigrants from Mainland China chose to come to the United States mainly because of economic prospects, most Chinese immigrants born in Vietnam...
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