Opinion: A home remedy for the racial wealth gap

Addressing the shortfall in Black homeownership will require efforts by the private and nonprofit sectors and elected leaders.
Housing economists and analysts agree that any market correction is likely to be a modest one.  (Dreamstime/TNS)

Credit: TNS

Combined ShapeCaption
Housing economists and analysts agree that any market correction is likely to be a modest one. (Dreamstime/TNS)

Credit: TNS

The racial wealth gap in Georgia and across the nation represents a tragic legacy of centuries of racial discrimination. Study after study shows that one of the largest drivers of this continued inequality is the appalling difference in homeownership rates and the huge disparity in home appraisal values between Black and white communities. A recent Brookings Institute study estimates a cumulative loss in Black wealth of approximately $156 billion due to discriminatory valuation practices.

In Atlanta alone, the Black homeownership rate is 25% less than White households. And while Atlanta recently ranked second in having the highest number of mortgage-ready prospective buyers, limited housing stock and other factors prohibit homeownership progress. Homeownership creates stability, allows for wealth accumulation and drives community investment – all critical factors to closing the racial wealth gap. Addressing this gap will require an all-hands-on-deck approach from the private and nonprofit sectors, as well as local and national elected leaders.

Credit: contributed

Credit: contributed

With a long-term focus on ending housing disparities, the Urban League of Greater Atlanta (ULGA) has operated as a U.S. Department of Housing and Urban Development (HUD) Approved Housing Counseling Agency for the metro Atlanta region for more than 40 years. One of the greatest barriers to progress has been the lack of access to fair and affordable mortgage lending for people with low to moderate incomes. Our programs work to end discriminatory lending practices and ensure equal access to credit for Black and all qualified borrowers by partnering with financial institutions to tackle the problem.

We are positioned to make significant collaborative progress in partnership with Wells Fargo, the Community Foundation of Greater Atlanta and a regional coalition of residential housing stakeholders. Together, we have created an Atlanta WORTH Collaborative to advance racial equity in homeownership.

This initiative includes an online interactive Homeowners Urban Blueprint, The HUB platform, launching this fall. Our goal is to help 5,000-plus new homeowners of color understand, prepare for and navigate the homebuying ecosystem; find an affordable dream home; secure financing and secure down payment assistance and buy a home and sustain homeownership to build equity and wealth. The HUB will offer financial literacy and credit counseling programs and connect prospective buyers to industry professionals. We recommend that this model be replicated nationally.

The ULGA and Wells Fargo also are collaborating to expand the number of Black residential real estate appraisers over the next five years. We will connect interested individuals to the education and on-the-job training required to become certified in Georgia. They will be armed with tools to address disparities in appraisal valuations of Black-owned homes and begin to reverse the estimated $156 billion in lost wealth in the Black community.

With support from HUD and private-sector funders, the Urban League of Greater Atlanta’s Housing Program is making tangible advancements. Through collaborative efforts between local governments, community organizations and real estate professionals, we are creating solutions tailored to the Black community’s unique needs and challenges to homeownership.

However, local efforts can only do so much to bridge this gap. Thankfully, Georgia’s U.S. Sen. Raphael Warnock is also playing a leading role in making this issue a national priority. In his first year as senator, he introduced a bill called the Downpayment Toward Equity Act, which would aid first-generation homebuyers through qualifying expenses toward purchasing their first home — including down payment costs, closing costs and costs to reduce the rates of interest. This legislation would be a gamechanger here in Georgia and nationwide for so many Americans who have been denied the opportunity to own their own homes and recognize the full benefits of their hard work.

In introducing this bill, Sen. Warnock said, “Housing means dignity, safety and security for so many across our country … but because of lack of generational wealth, many hardworking families are kept from living their dream of homeownership.”

The racial wealth gap did not happen by accident and it cannot be undone by accident. It’s time we make sure that Black people are no longer systematically blocked from realizing the American dream.

Nancy Flake Johnson is president and CEO of the Urban League of Greater Atlanta.

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