Black Church leaders this month launched a political action committee “to hold politicians and agency functionaries accountable.” Lights On is a political action entity, with a 501(c)(4) IRS status. That means it is not a C3, for which contributions would be tax deductible. Rather, the tax category allows it to lobby and support issues that are important to us. People can contribute at its website, www.lightsonnow.org.
Alfred Babington Johnson, His Works United and The Stairstep Foundation, explored challenges and opportunities at hand for mobilizing Black voters around Black interests in an inaugural Lights On launch meeting at Shiloh Temple International Ministries, in North Minneapolis.
“The time has come for better informed, more intentional strategic action by African American people. Lights On is an instrument to achieve effective community engagement in a sustainable manner, Babington said. “Ownership makes a difference. We’re the ones we’ve been waiting for. The broader issue is empowerment. The broader issue is how do we get to be aware? How do we mobilize? How do we energize? We have a target of opportunity that gives us a chance to make the point we are really trying to make.”
Following are excerpts of a presentation made by Build Wealth MN CEO David McGee, who described the $100 million initiative at Build Wealth MN to reduce the homeownership gap between Blacks and whites by 15%. Presentations by Minnesota Attorney General Keith Ellison and University of Minnesota law professor, Myron Orfield were in the March 21 edition of Insight News.
By Al McFarlane, Editor
We’ve been working to get Black families into home ownership for the last 20 years. We’ve gotten over 3000 families into home ownership. We’re a community development financial institution (CDFI) and we are also a housing developer. We’re trying to keep them affordable and trying to find subsidies and funding to get families into home ownership.
When we started in 2005, the Black home ownership rate was 32%. Today, it’s 19% in Minneapolis and 16% in St. Paul. It’s going the other way. We are sitting here in an area where US Bank and Wells Fargo have very big footprints. Wells Fargo has more residential mortgages than any bank in the world. This is one of their biggest footprints, and they haven’t made a lot of investment to address the home ownership disparities.
If things continue to go at the rate they are right now, based on the income disparities of Black families, we will totally be priced out of the market of home ownership, period. We started building $190,000 houses in 2015. That was our first house. The houses that we just finished in late December sell for $270,000. So in just five years, the price went up $80,000 for the exact same identical house.
We started an initiative to close the homeownership gap by 15% over the next five to seven years.
I’ve been a banker for 39 years, an underwriter who was the one who decides whether or not you actually get a home. The underwriter decides that. I’ve been training underwriters that are underwriting all over the world. We don’t really pay attention to underwriting criteria for lenders that was created over 90 years ago. How many Black families were buying homes 90 years ago? The underwriting criteria and guidelines have not changed for over 90 years. There’s a system that’s been in place for home ownership for white people that hasn’t changed for 90 years.
That lets you know that the possibilities of discrimination and continued disparities will continue.
We’ve created an initiative called 9,000 Equities. Our goal to get 9,000 Black families into 9,000 homes as owners. We intend to create 9,000 legacies. We created a loan product that is a little more culturally sensitive. Not black money. Not free money. But is going to be culturally sensitive to some of the needs of Black families.
We raised $100 million to get this started. We have been doing education at Build Wealth Minnesota. Many of the families of your congregations have successfully completed our program. We teach the families about systems. If we don’t understand finance and governance systems, we’re going to perish.
So we teach families the intricate details of these systems, getting people in a position to be self-sustaining homeowners that can create a legacy utilizing equity. But if we don’t get families in homes now when they’re at the $300,000 range, five years from now, they’re probably going to be at $500,000. So by helping families buy today, our families will have the $200,000 worth of equity that sets a legacy for their family for generations.
We also have linked into the federal Section 8 program that allows families to use the payment they make for Section 8 housing to go towards home ownership. They stop using that as a tool. We have revived the tool. We’re going to get families that are on Section 8 into home ownership using their Section 8 payment as a mortgage payment.
Senator Champion has been helping us get funding to be able to do the work that we do. He has a Senate File 3427 which will help us build a revolving loan pool so we can help families. We have a bank that’s buying loans after we make them. They’re going to continue to recycle that year after year. Our goal is 9,000. We’re going to start out about 1,000 families a year for the first three years, then about 1,500 a year after that.
We’re hoping that we’re going to be able to get as many partners and as much funding and support as possible to make this even more aggressive. So some great work is going on already. We closed for the first family in January. And we’re up to about 150 already this year. It is on fire. We need all of your support. This is something like has never happened before.