Black Americans must be empowered to buy homes
For generations, owning a home—especially a first home—was a rite of passage for many Americans.
The home you purchased was a place to raise a family, a sanctuary after a long day at work, and the backdrop to life’s most precious memories. A home also served as a critical investment in creating generational wealth. It was and remains a source of pride and dignity for the American family.
Today, however, the possibility of owning a home is harder to come by, especially for Black Americans. The gap between Black and white Americans who own homes is larger today than when housing discrimination was legal—and it continues to grow.
A recent study from the National Association of Realtors illustrated the significant, persistent racial homeownership gap. Since 2017, the annual homeownership rate for white Americans has remained comfortably above 70%; however, the rate for Black Americans hovers around 40%.
That’s why we are calling for an increased commitment of time, energy, and resources into two efforts to narrow the gap: improving the housing finance system to support qualified borrowers who may not fit into current credit boxes , and expanding access to homeownership through policy changes that will support all Americans being able to own a home.
For years, we have been advocates of affordable and fair housing. Given the housing supply crisis we’re facing, we are hopeful Congress will coalesce around the bipartisan housing bills that have been recently introduced, which if passed, will benefit all Americans.
We applaud the work Realtors are undertaking to reform the existing financial framework, including credit reforms and housing counseling. We, along with the National Association of Realtors, urge Fannie Mae, Freddie Mac, the Veterans Administration and the Federal Housing Administration to modernize the way they underwrite borrowers to account for more comprehensive data, like rental and utility payments, that better illuminate how a consumer manages their finances
Increasing financial opportunities will have little impact, however, if housing inventory remains near record lows, with prices at record highs. A recently released report from the National Association of Realtors explores the chronic underbuilding of housing units, which totaled more than 5.5 million housing units in the last 20 years.
To increase the nation’s housing inventory, all levels of government must increase funding for affordable housing construction; commit to the creation, expansion, and preservation of tax incentives to renovate distressed properties; provide incentives to convert unused commercial space to residential units; and encourage and incentive reform to zoning laws that prevent new construction.
In addition to creating more housing opportunities, these efforts would carry great economic benefits beyond the housing market.
While we await action from lawmakers to combat this systemic issue, we applaud Secretary of Housing and Urban Development Marcia Fudge —a Cleveland native—for aiming to close the racial wealth gap when it comes to people of color.
Just last month, HUD released a report aimed at eliminating bias when it comes to appraising properties owned by minorities.
Our racial homeownership gap is not a new problem—and it is not an easy one to solve.
But it would be a mistake to overlook the numerous opportunities that the private sector and our elected leaders on both sides of the aisle have to confront systemic barriers, improve housing attainability, and grow homeownership across the country.
By empowering more Americans, especially those affected by the legacy of racism, to buy and sell homes, we will help communities to thrive and build financial security and generational wealth.
Ja’ron Smith is a partner at Denton Global Advisors. He was deputy assistant to the president in the Office of American Innovation and director of urban Affairs and revitalization during Donald Trump’s administration.
Steve Benjamin was the first African American to be elected mayor of Columbia, S.C. He is a former president of both the U.S. Conference of Mayors and African American Mayors Association.