Black Homeownership Pushed By Florida Housing Coalition

Miami FL

04 March, 2021

8:22 AM

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By Johania Charles, the Miami Times The American dream looks a lot different for Black Floridians without a home surrounded by the proverbial white picket fence to call their own. The racial wealth gap, housing discrimination and a high cost of living creates an alternate reality for Black people that keeps their homeownership rate suppressed, compared to other ethnic and racial groups. In Florida, nearly a third more white people than Black people own their own homes. Further, since 1970, white homeownership has grown at a faster clip than for Black Americans. Realizing that the rates of Black homeownership will likely decrease as a result of the pandemic's economic impact, local issue-driven organizations and financial services companies are partnering to close the gap. Spearheading that effort is the Florida Housing Coalition (FHC). FHC is the state's leading nonprofit working to eradicate homelessness and increase affordable housing and first-time homeownership opportunities. The organization was compelled to facilitate an individualized solutions-based approach that tackles the problem head-on, and recently announced that the Center for Racial Equity will do just that. Not only does it intend to boost Black homeownership, it also will create an avenue for the displaced to seek affordable rental properties. The hope is that renters can make the transition to homeownership over time. "There is a long history of intentional discrimination against people of color when it comes to homeownership, and it's even more severe when talking about Black homeownership," said Jaimie Ross, FHC's president and CEO. "We have never used such a big tent to address affordable housing. I'm really excited about this new way of doing business that is incredibly collaborative." FHC recognizes that solutions may look different across local housing ecosystems and in turn wants to be intentional about first identifying the ecosystem before providing practical steps to solve the problem. For some communities, assistance with down payments and closing costs will be sufficient to increase Black homeownership. Others may require education combined with multiyear credit repair and savings programs, or a community land trust. The Center for Racial Equity equips municipalities with resources, local data, support, training and technical assistance to address housing and race problems in their backyard. Policy surveys and data analysis reports will assess the history behind each municipality's housing system and evaluate how systemic oppression, conscious inequality and racism has played a role in homeownership rates locally. Closing the Racial Disparity Gap in Homeownership (Closing the Gap) is one of the primary programs offered under the initiative. It is a 3-to-1 matching grant program with applications opening March 19 and funded by the center's two major underwriters, Bank of America and Wells Fargo, each donating $100,000 to the cause. Beginning in the fall, grantees will work with the center over the span of two years to implement strategies around land use, regulations, financing, subsidies and program design, among other areas. By working directly with elected officials representing minority groups, heads of housing departments and local organizations working toward racial justice in the housing market, FHC looks to create a foundation for systemic change starting with resources and programming that will trickle down to potential homebuyers. Both staff and program participants of the center are required to read Richard Rothstein's "The Color of Law: A Forgotten History of How Our Government Segregated America" to reflect on a history of redlining and develop an understanding of how banking, real estate and land use influence the home-buying process. "The Color of Law: A Forgotten History of How Our Government Segregated America" breaks down the history of redlining and other systemic barriers to Black homeownership./Courtesy of Liveright "There are policies and ordinances at the local level that make it harder or easier to move into homeownership," said Ross. "The first thing we're going to do is a racial equity profile, review land development regulations and make recommendations for how those should be improved." Additional programs include a free "Leading with Equity" online course, a "Glossary of Shared Language" to implement equity in language and dialogue, the Funders Collaborative & Allies to build financial and physical capacity, a virtual conference in August and the CRE internship program to increase Black housing developers, which targets college students across Florida's HBCUs to be mentored in the industry. With cost of living soaring 14% higher than the national average, Miami will be a beneficiary of the program. Ross expressed an interest in working with organizations like the Opa-locka Community Development Corporation and others working toward equity. The center's climate justice branch also will work to address the rising sea level crisis and the gentrification issues that come with it. "One of the ways you can increase Black homeownership is by opening more areas to homeownership," Ross said, and added that single or multifamily homes are typically reserved for certain locations. "Having different forms of property available across many communities can open the doors for people with lower incomes to access more pathways." According to Ross, there's more work being done in Miami at the intersection of racial justice and affordable housing than anywhere else in the state. Despite this, the city still faces a serious housing issue leading many into homelessness. Common housing barriers that make it difficult to increase Black homeownership in Miami are disproportionate rental costs that diminish saving rates and cash accumulation, a lack of information about the homebuying process from private and public sector lenders, poor credit among mortgage applicants and the placement of affordable homes outside of neighborhoods with transportation or job access. An Urban Institute report released last month revealed that by 2040, homeownership rates will drop by 3% and the impact will be most felt amongst Black communities, especially millennials and seniors who will bear the brunt of a widening racial wealth gap. Because homeownership is a primary way to build generational wealth, the report suggests that policymakers take action to implement changes to adjust homeownership rates, while expanding financial education and preparation through assistance programs. Lenders such as Bank of America and Wells Fargo disclosed a financial commitment to start narrowing the gap before things get worse, including their contribution to the center. "While the Center for Racial Equity offers a wonderful opportunity for our work to continue, as a firm, Bank of America has a long-term commitment to support home buyers across the country," noted Vania Laguerre, the bank's Miami market executive. Through its Community Homeownership Commitment, Bank of America has played a major role in the Liberty Square redevelopment project Phases One through Three, with millions invested through construction loans, tax credit investments, financial management services and first-time homebuyer education programs for all residents. The commitment will also provide assistance through the Down Payment Grant, America's Home Grant, down payment loans as low as 3% and the First-Time Homebuyer Online Edu-Series. The bank says $15 billion will go toward helping individual families purchase homes through 2025. In an op-ed published in Black Press USA, Chuck Bishop, Wells Fargo head of diverse segments, talked about ways to narrow the homeownership gap. "While we have made progress, creating more than 72,000 [Black] homeowners to date, much work remains," he said. "As a lender, we look to support homeownership in a number of ways, from offering a broad array of products to providing high-quality education to consumers. We offer educational tools about the home lending process, building credit and other important financial topics, including an interactive experience at MyFirstHome.wf.com." Though Wells Fargo's commitment of $60 million in purchase lending and $15 million toward initiatives promoting homebuyer education and counseling may move the needle, Bishop encourages potential buyers to also seek other educational resources to gain an understanding of where they stand financially. JP Morgan Chase Bank, though not an underwriter for the center, is also participating in the effort to increase Black homeownership. Qualifying homeowners in predominantly Black communities across the country can receive a $5,000 grant when buying a home through the bank. A recent pledge of $30 billion will finance 100,000 affordable housing units. Chase also pledges to write 40,000 new-home purchase loans for Black and Latino households. The Miami Times is the largest Black-owned newspaper in the south serving Miami's Black community since 1923. The award-winning weekly is frequently recognized as the best Black newspaper in the country by the National Newspaper Publishers Association.