Addressing Homeownership Affordability for People of Color
Is It Simply a Coincidence, or Are We Failing to Address Homeownership Affordability Because Those in Need Are Disproportionately People of Color?
Homeownership Affordability: The 2021 census figures confirm what we know or should have known about the US population. We are aging (75+% of the population is over 18); more diverse (the share of the white population dropped roughly 10% to 57.8%); growing slowly (although the Hispanic share of the population is up roughly 15% to 18.6% total); and 9% more “urban” than we were in 2010, continuing a long trend. Nothing in this report contradicts what the Harvard Joint Center for Housing Studies confirmed in 2016: millennials and minority households would be the main drivers of household growth in coming decades. Indeed, millennials under the age of 30 in 2015 were projected to form “23 million net new households between 2015 and 2025, while 72 percent of household growth overall [was] expected to be non-white households” (McCue and Herbert).
In the meantime, successive presidential administrations failed to adequately spur the development of affordable homes to meet the need of these emerging households. Until President Biden’s and the Democratic Congress’ efforts this year, no real action has been taken to make up the 5.5-million-unit shortfall on housing starts over the last decade, much less to accommodate the boom in millennial homeownership interest that is fueling today’s price increases. Low-interest rates notwithstanding, the number of Americans making the median income that can afford to become homeowners dropped to 56% according to the most recent survey on affordability by the NAHB (Hoi).
The racial homeownership gap remains damning. The black homeownership rate, having fallen to lows not seen since the civil rights era of the 1960s, is only 60% of the white homeownership rate, while Hispanics are at 65% of that rate., The lack of urgency in addressing what is clearly a compelling need, for black and brown communities particularly, raises the uncomfortable question of whether the failure to respond more quickly and with greater impact is because the beneficiaries of that action would be people of color.
In truth, the policy and market urgencies to which we must respond are tied inextricably to whether we believe that equality of opportunity to buy and to build wealth should exist for all. Do we stand behind the promise of the American Dream? Much in the way we addressed the needs of returning GIs after World War II and the need to build highways in the 1950s to ensure that Americans could have access to work opportunities regardless of where they lived, we must now act to ensure our country’s diverse future. What matters now is whether that American Dream remains accessible for all, regardless of age, race, and compelling population trends. Twenty million (20MM) homes must be built in the next decade to begin to put our money into providing what our political rhetoric has long espoused: the future of the American Dream for all, regardless of race, creed, color, or preference. For more on the policy goals needed, see www.ncrc.org/ahc and growthbyncrc.com for our work on the ground (literally). Join our fight!
“Housing Opportunity Index (Hoi).” NAHB, NAHB/Wells Fargo, 2021, www.nahb.org/news-and-economics/housing-economics/indices/housing-opportunity-index?_ga=2.91804893.677455196.1628776430-403372675.1628776430.
McCue, Daniel, and Christopher Herbert. “Projection: US Will Add 25 Million Households by 2035.” Projection: US Will Add 25 Million Households by 2035 | Joint Center for Housing Studies, 3 Jan. 2017, www.jchs.harvard.edu/blog/projection-us-will-add-25-million-households-by-2035.