Best move to narrow the racial gap in risky homeownership, say progressives
Housing advocates warn that a unique opportunity to help close the growing wealth gap between black and white families risks being removed from a massive spending program as moderates seek to lower the overall price.
representing Maxine WatersMaxine Moore WatersHillicon Valley – Brought to you by LookingGlass – Congress Seeks to Bolster Government’s Aging Cyber Infrastructure Maxine Waters Says Her Twitter Account Has Been Hacked On The Money – Brought to you by NRHC – Senate Slowly Coming Back From Debt Disaster MORE (D-Calif.) Democrats as potential cuts.
According to the proposal, the Secretary of Housing and Urban Development would be responsible for establishing and managing a new program with nearly $ 10 billion in funding.
This funding is seen as a key step in helping first-generation homebuyers access thousands of down payment assistance, an initiative advocates and experts say could be groundbreaking in advancing home equity. housing for blacks and people of color.
The gap between black and white homeownership is now larger than it was in 1968, when lawmakers first passed the Fair Housing Act to end racial discrimination in housing matters.
Last year, a study by the real estate website Redfin found that the homeownership rate for black families was less than 45% nationally, compared to 73% for white families.
Meanwhile, MIT released research showing black Americans pay more than white Americans to own a home, making it harder for black households to accumulate real estate wealth at the same rate as their white counterparts.
In an interview with The Hill, Janneke Ratcliffe, associate vice president of the Housing Finance Policy Center at the Urban Institute, said it was clear that the lasting effects of slavery and racist practices like redlining contributed to the growing racial ownership gap.
And that gap, according to Ratcliffe and others, has played a role in racial disparities in wealth, as property ownership is one of the primary drivers of wealth creation in the country for many Americans.
“By denying access to property to one generation of people and allowing another generation to own property, then wealth accumulates and worsens for families who have had access to property and do not have it. not done for families who haven’t, ”she said. .
“As a result, in the long run, you sort of built that wealth advantage into white households, who then had more assets than they could use to pay for their education and help their kids buy their first home and to invest in companies, etc. on, ”she said.
Ratcliffe said research by the Urban Institute has also shown how some of these disadvantages have crept into areas such as lower credit scores for non-white households and less wealth.
The House financial services committee approved the down payment assistance proposal last month as part of a massive $ 300 billion project that the panel gave the green light to investments in affordable housing that has been hailed by lawmakers as historic.
But it remains unclear whether the proposal – along with others to provide housing choice vouchers to thousands of people and create and rehabilitate millions of affordable homes – will make the final cut in the massive spending plan. democrats.
The party leadership has set a goal of completing the package and getting it through both chambers by the end of the month using a procedure called reconciliation, which will allow them to pass the bill without the backing. Republicans in the Senate equally.
But the party struggled to stay united amid negotiations. As different factions disagreed on the size of the package, particularly the initially offered price of $ 3.5 trillion on the final bill, members disagree on what should be cut to cut costs.
“All that funding is now at risk of being removed entirely from the budget reconciliation,” Waters said of the housing assistance at a press conference earlier this week, where she was also joined by representatives Emanuel Cleaver (D-Mo.), Sheila jackson leeVoting organization Sheila Jackson LeeYouth launches M-registration effort in key battlegrounds (D-Texas), Nydia VelasquezNydia Margarita Velasquez Democrat criticizes Yellen for not showing up for Democrats hearing, organizations push to end supplying military-grade equipment to police Biden announces more diverse judicial candidates, including judge appointed by George W. Bush MORE (DN.Y.), Nikema Williams (D-Ga.) And others.
“This is our chance. This is a unique opportunity to finally invest in our housing programs, our communities and our future and a long overdue investment, ”she said.
And housing advocates agree.
“If you want to advance equity, you must make a substantial investment in housing, as many of the current barriers to the advancement of our country are tied to our country’s legacy of housing discrimination.” said Nikitra Bailey, senior vice president of public policy. to the National Fair Housing Alliance, said.
“You absolutely have to have targeted intervention in the housing market and in reality it is a down payment on the future of our nation,” National Consumer Law attorney Odette Williamson told The Hill.
Other housing laws also being considered as part of the Democrats’ reconciliation plan would allocate funds for the creation and preservation of affordable housing in certain areas, especially those with high and persistent rates of poverty, unemployment and underemployment, as well as populations at risk of displacement due to rising housing costs.
President BidenJoe Biden McAuliffe Holds Slim Lead Over Youngkin in Fox News Poll Biden Signs Bill to Raise Debt Ceiling On The Money – Progressives Are Playing Hard on Biden’s Budget Plan MORE proposed similar legislation as part of its Build Back Better program aimed at improving racial equity in the nation.
At a time when the country has seen a historic increase in housing costs, Ratcliffe said there was a “lack of fair and affordable homeownership” in the country, while adding that it also needed to be addressed. to the current housing shortage.
Senator Ron WydenRonald (Ron) Lee Wyden Democrats’ reconciliation bill breaks Biden’s middle-class tax pledge Missouri Department of Education calls reporter a “hacker” for reporting website security breaches of State (D-Ore.), Who chairs the Senate Finance Committee, introduced legislation earlier this year to address the housing crisis. The bill would implement a tax credit of $ 15,000 for the purchase of a first home that would be fully refundable.
But Ratcliffe said creating a new down payment tax credit for first-time homebuyers could have a diluting effect without the targeted proposal aimed at first-generation homebuyers.
“This will dilute their capital quickly by making it available to all potential first-time buyers,” Ratcliffe said, “because instead of just focusing on the first generation population, it will be available to everyone. . “
“So you will have some dilution in the ability of such a tool to bridge the racial wealth gap and the racial property gap,” she said.
If bold steps are not taken quickly to address disparities in home ownership, Ratcliffe said Urban Institute projections show that the racial gap that persists in housing is likely to increase.
“Based on current trends and without any intervention, we forecast that the overall homeownership rate will decline slightly by 2040, and that the black homeownership rate will decline even more,” a- she declared.
While Bailey, whose organization worked with the House Financial Services Committee to help with housing proposals, said “the down payment won’t solve everything,” she called it a “critical first step” that needs to be done. taken to tackle existing problems. housing disparities.
“We can bring in the families most overwhelmed by our history and the continuing legacy of federal housing exclusion policies.” Bailey said. “We made intentional choices that some Americans could gain access to opportunity and wealth through housing policies, and those Americans have been disproportionately white.”
“And now we have the opportunity to bring in the very communities that we have left behind,” she said.