The homeownership rate among black families today is no higher than it was on April 11, 1968, when housing discrimination became illegal under the Fair Housing Act. Since 2000, predatory lending practices, followed by excessively tight lending standards, have erased all the gains in black homeownership achieved since the FHA became law. For many of today’s black families, the opportunity to build wealth through homeownership is increasingly farther out of reach.
For two decades now, I’ve participated in debates about whether we should put so much emphasis on homeownership as a primary means for middle-class families to build wealth. The truth is, if I had the power to design a new system, I would create more diversified savings and investment vehicles for families. But as my colleagues at Urban have shown, the reality is that homeownership does play a primary role in helping people acquire wealth. It’s been the case for my own family over the past two generations. Yet despite the evidence, our society and system tend to be skeptical about homeownership as a main driver of wealth for people of color. In the context of prospective black and brown homeowners, I hear arguments that housing assets are not that secure, so why encourage people to invest?
As long as homeownership remains the principal way that people build wealth, we cannot tolerate a gap in access to it. It can’t be available to some and not to others. If our systems and structural forces continue to exclude black families, our society will only grow more unequal. We will perpetuate the ugliness of racial segregation we had hoped to leave behind us.
This is an issue that keeps me up at night. And it’s an issue that Urban has been digging into over the past year. Under the leadership of Alanna McCargo (@MyHomeMatters), Urban’s vice president for housing finance policy, our experts have examined the extent of the decline in black homeownership by region and family type, explored the systemic causes of the racial homeownership gap, and recommended evidence-based strategies for shrinking the gap. And we remain committed to sharing our research and engaging with influencers to help reform state and local policies that contribute to high foreclosure rates in communities of color, advance place-based strategies that can help overcome barriers to credit, and provide housing finance expertise to efforts to close the racial wealth gap.
Closing that gap is not just a “nice-to-do.” It’s a critical indicator of whether we’re truly on the course to be a fair, just society. I’m interested in hearing your ideas for how we can together tackle this challenge.
Take a listen
Want to learn more about our work on black homeownership? Hear what Urban’s Alanna McCargo has to say in episode #8 of Critical Value, the Urban Institute podcast.
Give a read
What would it mean for the Washington, DC region’s future economic prosperity if Amazon selects one of our jurisdictions for its second headquarters? See what Greater Washington Community Foundation CEO Bruce McNamer and I think in our commentary for the Washington Business Journal.
In partnership with the Mastercard Center for Inclusive Growth, we’ll host on June 27 the Innovation for Inclusion Summit, which will focus on how local leaders can use technological innovation to address racial and economic inequalities in their communities. Learn more and register.