Latino buying to shape future

April 14, 2007
By Brent Hopkins

Latinos work hard, have money and spend it, and their vast buying power - close to $900 billion nationally this year - will shape the future of American society, including the housing market, panelists at a business forum said Thursday.

"This is a very hard-working community," said Henry Cisneros, who chaired the program presented by the Tom s Rivera Policy Institute, a nonprofit research organization headquartered at USC. "No one surpasses the foreign-born Latinos when it comes to work ethic."

That work ethic translates into serious dollars. According to data from a recent University of Georgia study cited at Thursday's conference, Latinos will account for $863.1 billion in buying power this year. By 2011, that will swell to $1.2 trillion.

The trick for the businessmen and academics in attendance at the two-day forum, held at the Beverly Wilshire Hotel, is to turn that buying power into things like homeownership and future economic development.

While Cisneros noted Latinos have proven successful starting mom-and-pop entrepreneurial ventures that can provide for their families, they lag behind other immigrant groups in the major corporate sector.

They've also made substantial inroads in home ownership, with nearly 50 percent of Latinos owning houses, according to data provided by GMAC Mortgage LLC. That's still significantly below whites, who show rates of 70 percent homeownership.

While 65 percent of Latino renters considered buying a home in the next two years, they often have trouble finding suitable mortgages, don't qualify under traditional credit scoring methods and have institutional distrust of banks because of bad experiences in their native countries.

"We're losing too many good Latino customers because they don't fit in the box," said Ennio Garc a-Miera, vice president and director of GMAC's New Markets Group. "We need to change the box."

And while heated political rhetoric has clouded the debate over immigration, particularly from Mexico and other Latin American countries, in recent years, USC professor Dowell Myers pointed out that the tide of new immigrants has slowed. Once they've established themselves, he said, they can begin starting their own businesses, becoming citizens and playing a larger role in society.

"Accelerated immigration has made some people feel like it's hopeless, like, `We can't advance ourselves with so many new people coming in,"' he said. "But immigration has leveled off and the sea of newcomers has become settled and stable."

In 1990, more than 367,000 people immigrated to California. By 2000, that dropped 8.3percent to 337,000. By 2005, the number had dropped to 301,501. Those immigrants will be the ones buying the homes as baby boomers start cashing out and enjoying the market run-up of the past few years.

And as they work their way into communities through homeownership, Arturo Sneider said their buying habits will influence future commercial development and neighborhood.

As founding partner of Primestor, a developer that pioneered bringing national retail chains into Latino neighborhoods, he's seen Latinos become a coveted demographic for prominent chains like Starbucks and Target.

In a few days, his crews will begin work on erecting a Lowe's Home Improvement in Pacoima, part of the massive redevelopment of the former Price Pfister plant.

His consumers are not monolithic, he said, using the example of a Spanish-speaking grandmother who wants to shop at a carniceria accompanied by her English-speaking grandson who wants to go to GameStop. But with the proper handling, he noted, they can bring significant reward.

"It's a very sophisticated community these days, but listen to it," he told the audience. "It's open for business and it's there for the taking."

Source: Whittier Daily News