Homeownership is a well-established pathway for wealth-building and economic mobility
By LaKeeshia Fox, Director of Homeownership at Living Cities
On June 19 in 1865, 250,000 enslaved Black people in Texas were freed – nearly two years after the Emancipation Proclamation was signed. This event, named Juneteenth, is commemorated by many as the “second independence day.”
Though the original Juneteenth was 159 years ago, remnants of enslavement and racialized exploitation reverberate throughout America today. Nowhere is this more evident than in housing, with Black people having the lowest proportionate rate of homeownership – a divide that has increased over the last decade. One of the most authentic ways to honor Juneteenth’s spirit of freedom and autonomy is to increase access to homeownership for Black communities.
After emancipation, the U.S. military initially allocated 40,000 formerly enslaved families up to 40 acres of land each – an idea originally put forth by Black ministers who knew having access to earthly resources and physical autonomy offered Black people the best chance of survival. But that reparative policy was quickly reversed, turning land ownership of over 400,000 acres back to slave owners, who used it to trap generations in a cycle of sharecropping debt. The financial impact of this reversal is estimated to be worth $640 billion today.
Today, white people still heavily dominate both land and homeownership, often by design. Descendants of enslaved people – and Indigenous people, from whom the land was originally stolen – continue to be excluded from access, in many ways mirroring the forced displacement and familial destruction that fueled slavery. Black people are just 13 percent of the population, but account for 37 percent of those experiencing homelessness. Further, unhoused people are up to 11 times more likely to be arrested than someone who is housed, spurring a cycle of incarceration fed by people not having a roof over their heads. Black renters are at the whims of storms of inflation, rent increases, gentrification, and economic factors that dehumanize and concentrate wealth, leading to displacement and families separated both by force and by economic necessity.
Homeownership should be prioritized as a pathway to address housing insecurity and a lack of Black generational wealth. It’s a proven strategy, with homeownership being the largest generator of wealth for families – more significant than education level or household income.
The obstacles most Black people confront when trying to purchase a home are debt to income ratio, credit history, and collateral which leads to a lack of cash available for down payments, and being treated as riskier to lend to based on their skin color. That’s why we must create multi-faceted solutions.
While there is much needed attention on evaluating credit scoring and underwriting criteria, more attention must be paid to how the mortgage product is structured. Black households are the least likely to be homeowners, more likely to be declined for a mortgage, and, when they do attain homeownership, more likely to lose their home to foreclosure. That is why Living Cities is exploring the ways mortgages can be “enhanced” through insurance or savings vehicles. The necessary product innovations are accessible if homeowners have an emergency need or a home-related cost. The idea is having this money set aside would help prevent people from going into foreclosure in hard times, and give lenders some extra material assurance. Making mortgages less risky for lenders, insurers, and investors, in addition to families, should lead to an expansion of the credit box and allow even more households with modest incomes and resources to access and realize the benefits of homeownership.
Communities are beginning to pave their own alternative paths to buying homes. In Minneapolis, Youthprise is partnering with Living Cities’ Closing the Gaps Cohort to create a youth-owned and designed, live and work cooperative model. In Saint Paul, Living Cities contributed to the Inheritance Fund, which offers forgivable loans to help descendants of the historic Rondo neighborhood purchase homes. This is reparative justice at work. In Orange Mound, a historically Black neighborhood in Memphis, the city is partnering with the community to create a community land trust to provide long-term affordable homeownership opportunities for residents.
Elected and appointed officials, philanthropists, grantmakers, and nonprofit leaders have the opportunity to get behind innovative, community-driven efforts that increase Black homeownership. These ideas need resources – funding, infrastructure, policy changes, capacity, legal knowledge – that if provided, would decrease the Black-white wealth gap in the U.S.
It’s time to move beyond merely recognizing Juneteenth as a national holiday, and work collaboratively to truly liberate Black people from systems that have and continue to exploit and hold back our communities. While I believe we’re all born free, I want that inherent freedom to be tangible and attainable. I want to see it in the seeds our elders plant in their backyards, in the kids riding bikes between their homes in safe neighborhoods, and in the security of knowing resources and community ties are all around us.
