In 1964, Dr. Martin Luther King Jr. wrote, “It is obvious if a man is entered at the starting line in a race 300 years after another man, the first would have to perform some impossible feat to catch up with his fellow runner.”
As we recognize Black America’s liberation from slavery this Monday on Juneteenth, King’s words capture the enduring injustice fueling the country’s staggering racial wealth gap. Today Black Americans hold a mere 2.9 percent of the country’s wealth — slightly more than in 1863 when the Emancipation Proclamation was signed. The median household wealth for white Americans now stands at about $188,000. For Black Americans, it’s a paltry $14,000.
White Americans pulled so far ahead for a simple reason: access to credit, land, and homeownership. Home equity accounts for 60 percent of middle-class wealth in America. However, more than a century of discriminatory land-use, housing, and lending policies restricted people of color’s equal access to land, homeownership, mortgage credit, neighborhood investment, and many other advantages afforded to white people in this country.
While the nation has made significant strides toward dismantling racial barriers since the passage of the Civil Rights Act of 1964, equal rights have not translated into equal wealth for Black Americans. Though the Fair Housing Act of 1968 outlawed housing discrimination, language barring people of color from owning homes or purchasing land still exists in countless home deeds across the country. These racially restrictive covenants are a stark reminder of how Black families have been and continue to be excluded from our nation’s most powerful path to wealth building.
In the late 1990s, bad actors in many of America’s financial institutions and related businesses compounded the problem. Recognizing an untapped market of Black Americans looking to own a home, many banks partnered with trusted local Black religious and civic leaders to host wealth-building seminars. They offered donations for every attendee who signed up for subprime mortgages — cheap, high-risk loans that quickly become unaffordable.
Often without other options, Black people were twice as likely than white people to fall victim to these loan schemes. From 2005 to 2009, Black communities lost more than half their wealth in the subprime mortgage crisis and subsequent recession.
Habitat for Humanity, where we both served on the board, has sought to break this cycle of racial and economic injustice by working to close the homeownership gap. Increasing the number of Black homeowners doesn’t just help those in need. Like sidewalk ramps initially intended just for those with disabilities, working with affordable-housing advocates and partners to reach the goal of 3 million net new Black homeowners by 2030 will result in safer, more stable, and economically vibrant communities for all people.
That’s why nonprofits, philanthropy, and governments must join forces to achieve greater progress against the homeownership gap. Here’s how to turn up the heat.
Look beyond one-shot changes. To address centuries of discrimination, lawmakers must do more than pass equal-rights amendments and new housing rules. It will take intentional and sustained action, investment, and systemic change to level the playing field.
Homes in Black neighborhoods are valued up to 23 percent below homes in white neighborhoods, according to the Brookings Institution. Policymakers and nonprofits must dismantle this systemic bias. Financial institutions must stop and then be held accountable for unfair mortgage lending and credit practices that have stymied wealth building for generations of Black families.
The good news is that communities across the country are making headway by expanding access to down-payment assistance programs, adopting tax policies that help low-income homebuyers, and combating predatory lending. Philanthropic organizations and housing nonprofits have a vital role to play to advance these programs and policies that enable Black families to build intergenerational wealth through homeownership.
Champion government and nonprofit partnerships. Policymakers and nonprofit leaders must work together to push for programs and investments that encourage Black homeownership. Nonprofits can partner with state and local governments to launch initiatives that help Black families buy their first home through first-generation down payment and credit assistance, financial coaching, and counseling.
They can also join forces to repeal overly restrictive zoning laws to help bring about more mixed-use, mixed-income communities and help Black families access better schools and other resources. Philanthropic leaders should add their voices to the growing chorus of housing advocates supporting YIMBY, or “Yes in My Backyard,” campaigns to increase the nation’s supply of affordable housing.
Advance federal affordable housing efforts. As local and state housing advocates and community partners fight disinvestment and redlining in communities across the country, Congress must ensure passage of the Neighborhood Homes Investment Act to help revitalize racially segregated and distressed neighborhoods through tax credits. Expanding government grants to nonprofit builders can also finance affordable home construction and create sustainable homeownership opportunities for Black households.
Federal policies designed to revitalize neighborhoods and expand the supply of decent, low-cost homes will attract new businesses, increase home values, and narrow the widening wealth gap between Black and white families.
As the country commemorates Juneteenth, acknowledging a legacy of social and economic injustice is not enough. America must encourage transformational change that creates thriving communities. Advancing Black homeownership opportunities to narrow the racial wealth gap is the first step. But to get there, we need to confront hard truths and commit to disruptive action. Only then can we achieve greater economic and housing justice for everyone and create a more perfect union in communities across the country.
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