Racism and Homeownership–Sabotaging the American Dream
Racism and Homeownership: How Racism Sabotages the American Dream
Race plays a significant factor in the home-lending industry from mortgages to appraisals. According to the The Markup report, co-published with the Associated Press, Latino, Asian and Pacific Islander, Native American, and Black applicants continue to experience discrimination during the mortgage approval process. But Blacks encountered discrimination more than any other demographic group. In fact, Black people were 80% more likely to be denied for a mortgage than white people with similar credit, debt-to-income ratios, purchase price and down payment (Blain). In some metro areas, the disparity between white and black mortgage denials was greater than 250% (Martinez and Kirchner).
“Black people were 80% more likely to be denied for a mortgage than white people with similar credit, debt-to-income ratios, purchase price and down payment.”
Racism and Homeownership
Discriminatory and exclusionary housing and lending practices are not new; they are rooted deeply in our American history. In the 1930s, the federal government created the Home Owners’ Loan Corporation (HOLC) to make it easier for Americans to own homes. Black Americans were deliberately excluded through a practice called redlining. In 1944, the GI Bill was created. It, too, replicated the same pattern of racial discrimination in housing shutting out almost ALL of the 1.2 million Black Americans that served their country in World War II (Blakemore).
Despite the passage of the 1968 Fair Housing Act, the 1974 Equal Credit Opportunity Act, and the Community Reinvestment Act (CRA) of 1977, racial disparity in home ownership persists, and through it the growing racial wealth gap in America today. In fact, the Black homeownership rate is 30% less than that of whites and 22% less than the national average (Blain). Add to that skyrocketing prices, record-low inventory, fierce competition from institutional investors, material and labor increases, and we have a recipe for a gap that will become enormous.
“The Black homeownership rate is just 44%–over 30% less than that of whites,”
Too many Americans—working families, people of color, Millennials—are being locked out and left behind. Despite the efforts to address equality in housing, the Markup report reveals that, then, as now, exclusionary and discriminatory policies are firmly in place. Access to safe, decent and affordable homeownership has not improved for far too many people. Is there an end in sight?
Blain, Keisha N. “Home Hunting While Black: How Racism Sabotages the American Dream.” MSNBC, NBCUniversal News Group, 4 Sept. 2021, www.msnbc.com/opinion/home-hunting-while-black-how-racism-sabotages-american-dream-n1278488.
Blakemore, Erin. “How the GI Bill’s Promise Was Denied to a Million Black WWII VETERANS.” History.com, A&E Television Networks, 21 June 2019, www.history.com/news/gi-bill-black-wwii-veterans-benefits.
Martinez, Emmanuel, and Lauren Kirchner. “The Secret BIAS Hidden In Mortgage-Approval ALGORITHMS – the Markup.” The Markup, 25 Aug. 2021, themarkup.org/denied/2021/08/25/the-secret-bias-hidden-in-mortgage-approval-algorithms.