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A Call for a More ‘Equitable’ Housing System

The Center for American Progress (CAP) is calling on lawmakers to make homeownership and affordable rental housing more accessible to people of color. Citing specific historical instances of racial discrimination and segregation in the housing finance system, the center is calling on lawmakers to reverse the ongoing impacts of this discrimination and make the housing system more “equitable.”

“Homeownership and high-quality affordable rental housing are critical tools for wealth building and financial well-being in the United States. Knowing this, American lawmakers have long sought to secure land for, reduce barriers to, and expand the wealth-building capacity of property ownership and affordable rental housing,” states a new report from the center.

“But these efforts have almost exclusively benefited white households,” the report reads.

Today there are significant disparities in homeownership and wealth among black and white families in the United States.

The median value of a home owned by a white household is $219,600 compared to $152,700 for a home owned by a Black household, according to CAP. At the same time, the homeownership rate is about 73% for white families compared to 41% for Black families.

When comparing overall wealth, the CAP found that white households tend to have about 10 times more wealth than Black households.

Today’s disparities and often highly segregated neighborhoods are the result of laws and policies that either explicitly or implicitly favored white and wealthier residents, according to the CAP’s report.

For example, in the 1930s the National Housing Act and the Home Owner’s Loan Act were adopted to help make homeownership more accessible. The Home Owners Loan Corporation created maps that marked certain supposedly risky neighborhoods for home lending in red, and according to CAP the maps “assessed risk in part based on a neighborhood’s racial composition.”

While this process, known widely today as redlining, is no longer legal, it has left lasting impacts.

The FHA relied on those early “redlined” maps to determine where it should insure mortgage loans, and between 1934 and 1962, just 2% of FHA loans went to nonwhite homeowners, according to CAP. Today nearly three out of four of those first redlined neighborhoods are low- to moderate-income neighborhoods, and more than 60% of them are “predominately non-white,” according to CAP.

Zoning laws in the early 1900s expressly prohibited Black families from purchasing homes in neighborhoods with mostly white residents and prohibited white families from purchasing in neighborhoods with mostly non-white residents. Race-based zoning was deemed unconstitutional in 1917, but the CAP asserts that single-family zoning laws have effectively perpetuated segregated neighborhoods in many areas.

“As white households typically had higher incomes and access to a range of federal home loan programs, single-family zoning produced racially segregated neighborhoods without explicit race-based ordinances,” the CAP report reads.

Thus, in order to level the playing field and make housing more accessible and affordable to all Americans, the CAP report urges lawmakers to “dismantle exclusionary zoning practices” and “support robust civil rights enforcement in the housing market by fully implementing the Affirmatively Furthering Fair Housing Rule.”

Single-family zoning has been a relevant and contentious issue in the housing industry of late, and the CAP is not the only to connect it to racial segregation. Ibraheem Samirah, a Virginia state delegate, wrote a recent op-ed about the issue, renewing his call for zoning reform that would allow for two-family housing on lots across Virginia.

A couple of states have already passed laws limiting single-family zoning laws. Both Oregon and Washington are allowing multifamily housing in some areas previously zoned for only single-family homes. However, Oregon’s law has been met with some solid opposition.

About Author: Krista F. Brock

Krista Franks Brock is a professional writer and editor who has covered the mortgage banking and default servicing sectors since 2011. Previously, she served as managing editor of DS News and Southern Distinction, a regional lifestyle publication. Her work has appeared in a variety of print and online publications, including Consumers Digest, Dallas Style and Design, DS News and DSNews.com, MReport and theMReport.com. She holds degrees in journalism and art from the University of Georgia.
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