Homeownership is a foundation for building wealth. Purchasing a home is a sound investment, boosts net worth and becomes an asset to be passed down generationally. Over time, the effects of that compound. Intrinsically, a racial wealth gap dovetails with the homeownership gap.
“Within the past few years, if a Black family was at the poverty line, the average net wealth was $0. At the same point in time, a white family under the poverty line typically had $18,000 in wealth,” said James Ryan, president of Time For Homes, an advocacy group that aims to combat homelessness in New York. “This isn’t necessarily the work of some racist politicians from the deep south with redneck ideas making nefarious legislation. It’s a continuum of what’s happened previously. The majority of white families passed down some kind of wealth.”
Those gaps can be blamed in part on the last century’s redlining practices. Black people already faced a stacked deck before the racist practice put up another housing barrier in the 1930s. Redlining pushed segregation, devalued neighborhoods of color and made it nearly impossible for Black people to obtain mortgages.
And even though the Fair Housing Act should have eradicated redlining, the act only holds power if it’s enforced. Cases surfaced in recent years, including a 2019 undercover Newsday investigation, which revealed widespread discriminatory behavior among Long Island’s real estate agents, and resulted in new state regulations to strengthen the law.
Credit issues create another obstacle for potential buyers of color.
“You can’t get a mortgage without at least halfway decent credit,” Ryan said. “Again, it’s disproportional to communities of color. You also have a disparity in the criminal justice system. If you go to apply for an apartment to get on track to be fully housed and a step closer to buying a home, most will require credit check and background checks, which could be problematic. Indiscretions with the law shouldn’t matter if you served your time and are no longer on probation or parole.”
From “American Banker Vol. 185 No. 122” and “Breaking down the color barriers to homeownership” (nahrep) by Paul Centopani, Brad Finkelstein, and Bonnie Sinnock.
Read the full article on: https://nahrep.org/nahrep-in-the-news/2020/06/19/breaking-down-the-color-barriers-to-homeownership/