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(In)Equity in Homeownership



About four in ten Black households own their homes in the US compared to seven in ten for white households. Black homeownership has been historically low because of redlining, discriminatory lending practices, and lack of access to credit.  Between 1945 and 1959, African Americans received only 2 percent of all federally insured home loans. Additionally, many Black families were unable to pass down wealth and property beginning with post slavery laws that prevented them from acquiring and maintaining property, and, more recently, because of high-interest subprime mortgages that increase the risk of foreclosure.


Income disparities and mortgage discrimination remain significant hurdles for Black Americans seeking homeownership. The racial wealth gap, stemming from centuries of systemic inequality, has limited the financial resources available to Black families, making it harder to save for down payments and qualify for loans. Additionally, Black borrowers are more likely to experience predatory lending practices, higher interest rates, and loan denials compared to their white counterparts.


Various initiatives and policies are being implemented to address the disparities in Black homeownership. These efforts aim to promote fair lending practices, provide down payment assistance, increase financial literacy, and expand affordable housing options. Organizations like the National Association of Real Estate Brokers and local community development organizations are actively working to increase Black homeownership rates through education, advocacy, and partnerships with financial institutions.


Image from NCRC.org


The National Community Reinvestment Coalition set a goal of 60 percent Black homeownership by 2040, which would require adding 165,000 new Black homeowners annually. For this goal to be met, it also assumes that we do not create new barriers by moving jobs farther from affordable housing or siting infrastructure or other projects in locations that lead to displacement and gentrification. This also means that we as policymakers and enablers in the economic development and transportation arenas need to realize that development decisions are not neutral. The legacy of redlining that pushed Black homeowners into struggling housing markets, as well as a history of transportation projects that have divided and further isolated these communities, requires significant efforts to redress. Yet at the same time we are weakening fair housing laws and support for public transportation. 


The Justice40 Initiative provides a great starting point to address these inequities, but it will also require working across the domains of housing, economic development, workforce development, and transportation to see meaningful change. Achieving equitable homeownership rates for Black Americans is essential for addressing historical injustices and promoting economic empowerment. By understanding the systemic challenges faced by Black communities and by breaking down the barriers that hindered access, affordability, and fair lending practices, we can work toward a more inclusive and just society. 


 

For more on this topic, check out the Advancing Equity in Housing blog post and Fourth Economy’s updated Equitable Development Toolkit. Interested in learning how we can help your community or organization embed equity and inclusion into housing practices and economic development? Reach out to us today.

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