wealth inequality

We must create more opportunities for Black families to buy a home

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The Urban Institute’s “Who Owns the Twin Cities?” report, released in June, confirms what affordable-housing advocates have known for years: Affordable homeownership in the Twin Cities has become increasingly inaccessible to Black families.

The Twin Cities is in the unenviable position of having the greatest inequity between Black and white homeownership in the nation. Seventy percent of white Twin Cities families own their homes, while just 21% of Black families do. Even worse, the Urban Institute’s new research confirms that the gap has widened, increasing by 10 percentage points since 2000.

This drop in Black homeownership was caused by a combination of market forces that have made it much tougher to buy a first home, even for the middle class. The decline represents a huge loss of potential wealth accumulation and a missed opportunity to begin closing Minnesota’s persistent racial wealth gap.

Just over a month ago, our country marked 100 years since the brutal destruction of the prosperous Black community in Tulsa, Okla., by a white mob, a vivid example of Black Americans being stripped of their wealth by a white power structure. Right here in the Twin Cities, the destruction of St. Paul’s Rondo neighborhood in the 1960s to make way for Interstate Hwy. 94 is one of the reasons for the present-day wealth gap of Black Minnesotans.

At Twin Cities Habitat for Humanity and the Minnesota Homeownership Center, we meet every day with low- and moderate-income Black families who are striving for the stability and wealth-building potential of owning a home, but who confront a tsunami of barriers to realizing that dream. Some of those barriers are rooted in discriminatory real estate and lending practices. Others were created by current market conditions, including historically low mortgage interest rates, record high home values, a drastic shortage of affordable homes for sale, and competition for those homes from private-equity investors who are buying them for use as rentals. In this environment the odds are stacked against even the most tenacious first-time home buyer.

We know that equity in homeownership leads to equity in all other aspects of life. That connection makes it imperative that we adopt a laserlike focus on creating more pathways to affordable homeownership for low-income households of color. Providing affordable rental options is an important part of the housing mix in our community, but renting does not put Black families on a path to wealth creation. To close our racial wealth gap, we must create more opportunities for Black families to buy a home.

Creating more pathways to homeownership will require significant public and private investment in programs that we know work — like down payment assistance and homeownership advising. That means a much larger commitment of state funds for organizations like the Minnesota Homeownership Center, which has a 25-year history of advancing equitable access to homeownership through education and support services as well as leadership of industrywide initiatives to promote ownership of affordable homes. It will require a major expansion in the production of homes that lower-income households can afford.

Failure to make these investments and create more pathways to affordable homeownership will not only slow our progress toward economic equity, it will also negatively affect Minnesota’s future vibrancy and growth. According to a 2020 Itasca Project Housing Affordability Report, the Twin Cities metropolitan area will need to produce nearly 18,000 housing units each year for the next 10 years to meet the demands of projected growth and make up for a decade of under-building. That’s about $4 billion in annual investment and a more than 30% increase over the 2000-2016 annual average of 12,900 units. Much of the new housing…

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