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As a part of the +You Thought Leadership Series, Habitat for Humanity International CEO Jonathan Reckford sat down with five panelists to discuss the Black homeownership gap in the United States. The gap, now at nearly 30%, is the widest it’s been in over 40 years.

Intentionality and racial equity were recurring themes throughout the discussion, which began with a look at the problem and how it has only worsened over time. Chief program officer of Twin Cities Habitat for Humanity Shereese Turner, while speaking on her own experience of living in Minnesota, said, “We have systemic policies and practices that are just passed along from one generation to another, and there’s this perception that you want to be equal, but the policy speaks something very different. That’s a problem, because in the Twin Cities we’re struggling. We are talking about how are people able to feed, clothe, and house your families when they can’t get a decent paying job—and that’s why the gap gets wider and wider. I know for a fact we are working with families who had hardship before COVID. Imagine what that looks like for them today.

“The few homes we do have won’t be there in a few years, because they’re going to be in foreclosure. I struggle with this and how we got here. When I say systems, understand, systems are people. You have your gatekeepers who say who can get through and who can’t. Until we can change the people who are at the gate, a whole lot won’t change. We have to be more progressive in seeing the problem for what it is.”

Maurice Jones, CEO of OneTen, added, “We didn’t get here by accident. We got here in large part through intentionality, meaning there were intentional policies in the public and private sector that discriminate against Black folks and other folks of color. First thing I would say is we have to have intentionality. You've got to be able to work in the places and with the people who have been intentionally discriminated against.”

Unrooting the Problem

Jones touched on four points that could help to begin closing the gap, including down payment assistance, fairer mortgage and lending requirements, addressing unbanked or underbanked families, and access to quality jobs. He shared, “What produces intergenerational wealth like nothing else? Homeownership. Right? I think the homeownership rate for Blacks now is just over 40% and for whites it’s 73%. You’ve got to intentionally have public and private sectors that are focusing on increasing Black homeownership.”

The panel agreed that access to quality jobs would assist in the goal of owning a home. Rising rents and higher costs of living now limit what people can save. Renee M. Willis, senior vice president for racial equity, diversity, and inclusion of the National Low Income Housing Coalition, shared, “Nearly 8 million households are extremely cost-burdened and are facing difficult choices while paying more than half their incomes on rent.”

Yet, decent quality jobs are out of reach for many Black individuals because of company policies. Jones said, “If you look at jobs that pay $60,000 or more across the country today, 80% of them require you have a four-year degree just to compete. You look at jobs paying $40,000 and above, 71% of them require a four-year degree just to compete. If you look at Black talent in the workforce today, ages 25 and above, 76% of us do not yet have a four-year degree. You literally have a systemic barrier that keeps Black folks from making their way into the middle class in America. How un-American can you be?”

Tackling Supply

However, as these concerns become addressed, the housing shortage—especially affordable housing—presents an even larger obstacle. Thinking creatively and vertically were two thoughts shared among the group. One idea is building vertically as well as accessory dwelling units (ADUs).

Alanna McCargo, president of Ginnie Mae, shared about last week's 2022 Innovative Housing Showcase in Washington, D.C., “We had all these houses built on the National Mall overnight. These are quick-solution, factory-built, high-quality, energy-efficient real opportunities to serve communities. I think just opening our eyes to that as a real solution in terms of housing supply, we could be building so much more.

“We could really grab hold and debunk the myths that manufacturing housing is trailers, and it is not. That’s why the showcase was so important. There’s a real opportunity there that communities have to get their arms and heads around.”

To intentionally tackle the shortage and implement creative solutions, another concern that’s being addressed by the Biden administration is zoning. “Part of the proposal in the housing supply program talks about the need to tackle the issue of zoning and remove anything that’s exclusionary. This has to be intentional,” McCargo said. “Special purpose credit programs are about being intentional. And these ideas of zoning are also about being intentional.”

Building Access

Possibly connecting Community Development Financial Institutions (CDFIs) with the capital and liquidity access of Ginnie Mae was another idea McCargo shared. She said, “We’ve got a lot of work to do to figure this out, but this is an opportunity that could provide the scale, particularly to CDFIs that do home lending. The ones that do, my goodness, talk about intentional, they’re doing amazing work.”

This idea was further developed by Nikitra Bailey, senior vice president of public policy for the National Fair Housing Alliance, who said she believes minority-based CDFIs could do great things in targeting Blacks and other people of color.

Bailey stated, “In order for us to utilize those programs, we have to make sure Black families have access to credit. We know that we’re dealing with a system where we continue to see the overreliance of discriminatory credit scoring systems. So, if we’re going to be effective at meeting the plan’s goals, we must make sure people who are creditworthy get access to the mortgage credit they deserve. Real strong enforcement of our nation’s fair lending laws and intentional practices, like special purpose credit programs, can help bring in the communities that we have left behind.”

Inclusion by race-conscious solutions and funding to targeted groups could also help the issue. “Down payments are the major barrier to entry. They present a significant obstacle for us so if we target solutions to first-generation [home buyers], we have a chance to actually create 5 million new homeowners, 1.7 million of them would be Black, 1.3 million would be Latino, and 1.4 million would be white. Inclusive policies are the solution to making sure we bring forward every community that we’ve left out,” Bailey added.

Jones said, “We’ve got 7 million-plus [homes] that we have to build. It’s got to be a team sport.”

Read more on the Habitat for Humanity’s Advancing Black Homeownership Initiative.