The Role of Family Wealth in Reinforcing Generational Divides

One way that extreme inequality shows up in our lives is unequal opportunity in homeownership.

And for millennials, these inequalities are compounded by the absence of publicly-supported mortgage programs, such as those that helped white boomers buy their homes after World War Two.

Both of us – Jessicah Pierre and Chuck Collins from the Program on Inequality at the Institute for Policy Studies – were interviewed for an article in the “Style Section” of the The New York Times, “Fly on My Own? Get Real.” Read what we had to say below.

Without government-subsidized mortgage programs that launched millions of white households into homeownership, family wealth plays an oversized role in determining who can buy.  And if that’s the case, it reinforces the existing economic and racial wealth divides.
“While it’s true that families with means have always helped their children (discreetly or not), what’s different today is that as the economy has more extreme gyrations and wages flatten, family wealth plays an outsize role in helping people get ahead, said Chuck Collins, a scion of the Oscar Mayer food corporation and the author of “Born on Third Base: A One Percenter Makes the Case for Tackling Inequality, Bringing Wealth Home, and Committing to the Common Good.”

Mary Wallace, a real-estate agent with Unlimited Sotheby’s International Realty in Boston who works primarily with first-home buyers (and is married to Mr. Collins), said that in 20 years she has rarely seen anyone in their 30s who did not have family help or an inheritance for their down payment. “In our market a buyer is expected to have 20 percent down to compete — that is between $80,000 and $100,000 to become a homeowner,” she said.

Jessicah Pierre, 27, a media specialist at the Institute for Policy Studies, a progressive think tank, has felt she is on unequal ground. “A friend was telling me how it wasn’t that hard to purchase a home. She was like, ‘Do this, do that.’” said Ms. Pierre, who lives in the Dorchester section of Boston. “But she wasn’t considering the fact that she graduated without any student-loan debt, came from a two-income household, as opposed to me. I am starting with negative wealth because I have loans to pay off and was raised in a family with only one income.”

Ms. Pierre’s father was an accountant in Haiti and became a cabdriver after immigrating to the United States because his degree wasn’t recognized. (She fully expects that she and her two siblings will take care of him in old age.)

Read the full article in The New York Times.

Chuck Collins directs the Program on Inequality and the Common Good at the Institute for Policy Studies, where he also co-edits Inequality.org. His most recent book is Is Inequality in America Irreversible? from Polity Press and in 2016 he published Born on Third Base: A One Percenter Makes the Case for Tackling Inequality, Bringing Wealth Home, and Committing to the Common Good.

Jessicah Pierre is the Inequality Media Specialist at the Institute for Policy Studies.