How the real estate industry is working to close the gap between black and white in homeownership


By Adina Salomon

REALTORS® are members of the National Association of REALTORS®

When she started working as CEO of Minneapolis Area REALTORS®, Carrie Chang was shocked to learn something about her hometown: The rate of blacks in Minnesota owning homes peaked in 1950. It was before the Civil Rights Movement and Fair Housing of 1968. Act.

In Minneapolis – where The Black Lives Matter protests after the murder of George Floyd in 2020 sparked a nationwide movement – 77% of white residents own a home. Only a quarter of black residents do so. With a difference of 52 percentage points, Minneapolis has the largest black-white homeownership gap of any major US city.

“[Minneapolis] is very segregated, ”Chang told The Daily Beast. “This is the reality of how we live in our community here, which is not healthy and definitely perpetuates the homeownership gap that we are working to close. “

Based on race / ethnicity data collected by the U.S. Census, the homeownership rate for non-Hispanic whites is the highest of any group, at nearly 74%. Only 45% of blacks own their homes.

This gap is expected to worsen. Without intervention, the national black homeownership rate is expected to decline to 40.6% by 2040.

The reasons for the homeownership gap are complex. Historically, government at all levels has enacted policies that have erected barriers to homeownership for people of color. One of the most infamous is redlining, where the federal government has refused to insure mortgages in colored neighborhoods, Chris Vincent, vice president of government relations and advocacy for Habitat for Humanity, told The Daily Beast. International.

In addition to government, the banking system and the real estate sector have been actively involved in perpetuating unfair practices.

“Even if the 1968 [Fair Housing Act] made them illegal, you had … a whole structure around how housing was facilitated and accessible, ”explains Vincent.

Inequalities prevented many black families from accessing homeownership and ultimately the wealth creation that resulted from it. And, for black homeowners, disparities such as the devaluation of homes in black neighborhoods have also meant that their home’s value has not appreciated as much as that of white neighborhoods.

Recent events have also taken their toll. The 2008 financial crisis, which disproportionately affected people of color through targeted subprime mortgages, significantly eroded black wealth. COVID-19 a made the situation even worse.

Over the years, the real estate industry has recognized past and present discrimination and has taken steps to help address the inequalities that result from it. Minneapolis Area REALTORS® examines its own role in the city’s homeownership gap, Chang says. Chang, who in addition to being the CEO of the group is also REAL ESTATE AGENT, member of the National Association of REALTORS®. The organization strives to ensure that its members and their clients are fully informed about the state’s down payment assistance program and its qualification requirements.

Additionally, it helps launch Pathway to Achievement, which aims to ensure there are more real estate professionals of color in Minnesota by providing educational support and mentoring opportunities. This in turn will help increase black home ownership by building confidence in real estate interactions, Chang adds.

At the national level, the National Association of REALTORS®, a professional organization of real estate professionals who must adhere to a code of ethics, is committed to advancing the right to real estate property for all, advocates for policies that promote fair housing financing system, including down payment assistance programs and tax credits. He is also a member of the Black Homeownership Collective, which in June launched an initiative to increase black homeownership by creating three million new net black homeowners by 2030.

Another barrier to home ownership is student debt, which prevents potential buyers from qualifying for a mortgage or saving for a down payment. The National Association of REALTORS® advocates for policy proposals to provide tax relief to student debt holders, who are disproportionately people of color. And, on a legal level, the organization calls on the government to increase funding for the federal housing equity enforcement to help remove systemic barriers to homeownership.

These interventions promise benefits beyond increasing homeownership rates. Homeownership is the primary method of wealth creation, so an increase in home ownership among blacks would also mean that there is a greater – and critically important – ability to build wealth. generational.

Closing the gap between black and white homeownership will have positive effects throughout people’s lives, but if left unchecked, this gap could widen.

“It won’t be fixed overnight,” Chang says. “You have to be patient and persistent to keep making changes at the systems level. “

Source link


Comments are closed.