While COVID-19’s hardly at the root of housing challenges, the pandemic compounded them—a signal that another housing crisis can be expected for homeowners, renters, and rental property owners, according to a report from the Urban Institute.
In the eye of economic downturns, people of color are most vulnerable to housing instability, recent data and prior crises show. Black and Latinx adults are particularly at risk of housing instability, including falling behind on rent and mortgage payments at more than twice the rate of White homeowners.
Meantime, also especially vulnerable are owners of rental units in small buildings—a large source of affordable housing without subsidies. Almost one of every three feels the heat, believing it’s incumbent upon them—fueled by a lag in rental income—to place their properties on the market. On top of that, it’s likely for Black and Hispanic owners to especially feel the brunt. More broadly, a loss of these units would shore the stock of affordable rental housing. The upshot? It would tamp down housing options further among struggling renters.
When it came to previous crises (think Hurricane Katrina and the Great Recession) housing policy responses haven’t met the challenge of advancing racial equity and economic mobility.
Notably, a spate of current housing outcomes reflects historically racist intentions and practices, reported the Institute. While such practices have evolved or now are against the law, the racist roots of these policies continue to inform who owns homes, their location, and the county’s wealthy.
The growing racial homeownership gap and related dearth of intergenerational wealth-building opportunities for Black Americans is vivid proof of these trends. The Black homeownership rate is more than 30% lower than their white counterparts. That’s a more pronounced gulf than when racial discrimination against homebuyers was legal.
So, the question is how to reverse these legacies and uproot racism. Thing is, merely tracking those who participate in crisis response programs—as has been done during past crisis response programs—won’t cut it. What really needs to happen is racial equity must be an explicit starting goal of crisis housing policy responses. Furthermore, among other things, it’s incumbent that on-the-ground program implementation be guided by the voices of people of color—those most affected by this and past crises.
According to an analysis from realtor.com, President-elect Joe Biden would be entering the presidency during a unique time in the housing market, as the industry is experiencing a shortage of home inventory, record-low interest rates, and high home prices. There is no doubt that this housing market environment has made it challenging for middle- and low-income Americans to purchase a home, and entry-level housing has become extremely competitive.
“Biden has a really ambitious agenda that will try to create opportunities for more low- and middle-income Americans to become homeowners or afford rental housing," realtor.com Chief Economist Danielle Hale said.
During his run for the presidency, Biden’s campaign released a $640 billion housing plan. This plan includes assisting first-time homebuyers by providing them with “a down payment tax credit of up to $15,000,” which they could apply at the time of purchasing a home.
“Biden recognizes how challenging it can be for some people to become homeowners," Hale said. She predicts that a Biden administration would focus housing initiatives on policies that would help those who have struggled to attain homeownership in the past.