Prior research has demonstrated that racial disparities in incarceration contribute to the black-white homeownership gap. In Homeownership Experiences Following Criminal Justice Contact, a new working paper originally presented at the Center’s Symposium on Housing Tenure and Financial Security, I show that disparities in arrests, criminal charges, and convictions that don’t result in incarceration may also contribute to that gap.

These findings are significant because recent estimates indicate that median net worth for white households in America is 10 times that of black households, while the black imprisonment rate is nearly 6 times that of the white imprisonment rate. Because principal residence makes up the largest share of household wealth – more than 60 percent of total assets – for the vast majority of Americans, much of the black-white wealth gap can be attributed to racial disparities in homeownership rates. Prior research demonstrates that racial disparities in incarceration – which affects financial resources, labor market prospects, and even romantic relationship dissolution – contribute to the black-white homeownership gap in aggregate.

While incarceration marks the most intensive form of criminal justice system contact, even lower-levels of criminal justice contact, like arrest and conviction, have the ability to disrupt employment and expose individuals to costly fines and fees. Moreover, while 2.2 million adults were incarcerated in American prisons and jails in 2016, an additional 4.5 million were under community supervision (i.e., on parole or probation), and 10.6 million were arrested over the course of 2016.

Using data from the National Longitudinal Survey of Youth 1997 (NLSY97), I examine the consequences of arrest, being charged with a crime, conviction, and incarceration for homeownership experiences in early adulthood. Like incarceration, these lower-level contacts with the criminal justice system are also disproportionately distributed by race (Table 1).

Table 1. Criminal Justice Contact by Age 30, by Race

Note: Author’s calculations from National Longitudinal Survey of Youth 1997 data.

The NLSY97 data, which are considered the best data available for estimating cumulative rates of exposure to the American criminal justice system, allow me to track homeownership experiences for a nationally-representative cohort of nearly 9,000 American millennials as they age from their teenage years through their mid-30s. In particular, I examine how these various forms of criminal justice system contact each independently relate to (1) probability of homeownership, (2) age of entry into first homeownership, and (3) homeownership duration.

Across a variety of models that adjust for individual achieved characteristics (e.g., education, income), family background characteristics, geography, and differences in homeownership trajectories that precede criminal justice contact, I find robust evidence that not just incarceration but also arrest, criminal charges, and conviction are associated with lower probability of homeownership, later entry into homeownership, and shortened duration of homeownership.

I find that incarceration has the strongest relationship (in terms of magnitude) with all homeownership measures, but being arrested, being charged with a crime, and, especially, conviction are also independently associated with less advantageous homeownership outcomes. For example, I find that conviction is associated with a 20 percent decrease in the odds of homeownership while incarceration is associated with an additional 23 percent decrease in odds of homeownership, all else held equal. Likewise, I find that being charged and being convicted are each independently associated with a roughly half year delay in entry into first homeownership, while incarceration is associated with an additional 1.5 year delay in entry into first homeownership, all else held equal.

It’s fitting that incarceration appears to have the largest impact on homeownership, given that incarceration marks a far more severe disruption to life than arrest or conviction. However, the fact that arrest only, for example, is negatively related to homeownership (particularly accrued years of homeownership) is noteworthy given that more than 10 million adults are arrested annually. Moreover, it’s important to bear in mind that arrests, like all forms of criminal justice contact, are not evenly distributed throughout the population – blacks in particular are arrested at a rate disproportionate to their share of the population and their level of criminal activity. As such, racial disparities in arrest rates are likely to feed into racial disparities in homeownership and, eventually, wealth accrual over the life course. These findings illuminate a potentially important pathway through which racial disparities in socioeconomic wellbeing are reinforced.