Addressing Discrimination in the Housing and Wealth-Building Space

To address and reduce the racial gap between in home ownership and wealth-building, the Urban Institute and the Federal Home Loan Bank of San Francisco (FHLBank) have committed $1.5 million to a new program called “Racial Equity Accelerator for Homeownership” which will “develop and incubate innovations in housing finance, including underwriting and financial technology.” 

"The yawning homeownership gap between whites and communities of color has only grown and with it, BIPOC [Black, Indigenous, and people-of-color] communities have missed out on opportunity and wealth accumulation,” said Urban Institute President Sarah Rosen Wartell. "The evidence is clear and the time is ripe for seizing the moment, and every segment of the home lending industry should work together to address long-standing barriers." 

San Francisco-based FHLBank will work with its member financial institutions to promote equal home ownership, create economic development projects, and expand access to affordable housing. The two-year program and financial contribution reflect the bank’s “call-to-action" for the industry to evaluate the “systemic barriers that continue to limit people of color from achieving homeownership, and implement tangible solutions that enable and ensure equity in homebuying.” 

“The numbers are staggering, and unjust,” said Teresa Bryce Bazemore, President and CEO of FHLBank. “The rates of Black homeownership, in particular, have plummeted to levels not seen since housing segregation was legal. Our charge is to summon the highest and best thinking and move with urgency in creating solutions that scale and inspire actionable advancements in policy and practice.” In partnership with its members, community organizations, developers, and others, the Bank is investing in multiple new evidence-based initiatives to ultimately close the racial wealth gap in America.” 

According to the press release, the new program aims to “spur mortgage finance research and development in areas that can facilitate and sustain more equitable homeownership” including alternatives to traditional scoring credit models that take into account student loan debt, which has a disproportionate effect on the Black community. It will also create new product structures that will better protect buyers in the case of temporary financial hardship. 

“This historic investment comes at a time when we are seeing gaps in homeownership grow, and gains that we’ve made as a nation regress,” said Laurie Goodman, Vice President of Housing Finance Policy Center at the Urban Institute. “There are real concrete solutions housing finance can implement to proactively dismantle the racial homeownership gap, and we are very excited to be working on innovative solutions to this critical issue.”