By: April Carson
According to data from the Urban Institute, today the gap in homeownership rates between Black and white families in the U.S. is bigger than it was when refusing to sell someone a home based on skin color was legal.
In Washington state, the homeownership rate for Black people is 31.1%. This is significantly lower than the national average of 42.6% and less than half of what it is for white residents in Washington, which is 64%.
Fewer Black families own homes in Washington and across the nation when compared to white families. This is due to racism and discrimination in the housing market that dates back to the 1930s.
Keeping a home
Keeping a home in the family is often a key to passing on wealth, so this inequality in homeownership has led to an even wider gap in wealth disparities between Black and white Americans.
This alarming trend of widening inequalities highlights the need for more proactive measures from our government to ensure that all individuals have equal access to housing and can build generational wealth. Policies such as the Fair Housing Act and Community Reinvestment Act are important steps forward in fighting housing discrimination, but more must be done to level the playing field for everyone.
Comprehensive education and training programs that equip people with the knowledge they need to spot discrimination when it arises are just one example of how we can work together to create a fairer system. Additionally, increased funding for legal aid and advocacy organizations to help individuals take action against discrimination can also play a key role in the fight against this injustice. By working together and investing in resources that can make an impact, we can move closer towards eradicating housing discrimination once and for all.
Let’s not let another decade pass by without progress. It’s time to take action now. As part of that effort, we must also acknowledge and confront the reality that housing discrimination has gotten worse over the decades. We must be aware of the systemic causes behind this unjust trend, such as restrictive zoning laws, socioeconomic segregation, exclusionary lending practices, targeted rental policies – all of which have been used to exclude or limit access to housing for certain individuals based on race, gender, ethnicity, religion, and other characteristics.
Losing a home
Losing a home or being denied access to housing affects individuals in a variety of ways, from economic and psychological distress, to social isolation and decreased quality of life. We must remind ourselves that the consequences of these discriminatory practices are far-reaching, impacting entire communities as well as other facets of society such as education, employment opportunities and more.
The practice of housing discrimination has only gotten worse over time as discriminatory policies and laws become more deeply entrenched in our society. This is seen, for example, in the proliferation of redlining – a racial segregation technique whereby lenders draw lines around certain neighborhoods to indicate which areas they will not lend money to. Redlining has been used throughout history to limit access to financial resources and restrict housing opportunities for marginalized communities.
More recently, the housing crisis of 2008 saw an increase in discriminatory lending practices such as subprime loans – high-interest loans offered to borrowers with lower credit scores who are often people of color or those living in poverty. These loan products come with higher default rates, which means that these borrowers are more likely to experience foreclosure. In addition, the Fair Housing Act of 1968 outlawed discrimination in housing, but there is still evidence of systemic racism and classism in lending policies that continue to shut out communities of color from accessing homeownership opportunities.
It's clear that over the decades, discriminatory practices have become increasingly entrenched within our housing system. Redlining, the practice of denying mortgage loans to particular neighborhoods based on race or ethnicity, has been a major contributor to this problem. The result has been a decades-long history of unequal access to good housing and financing opportunities that have had an enduring impact on communities of color.
The degrees of racism
Data from renowned real estate experts concludes that the odds are against Black families when they attempt to purchase a home.
The average black household would have to save for nearly 30 years in order to make a down payment, based on state data. By comparison, African Americans are two-and-a half times more likely than white borrowers to be rejected when applying for a loan.
One of the reasons this is true for Black families is that they're more likely to have student loan debt as well as higher debt-to-income ratios, both of which banks see as red flags when approving loans.
But even when Black families are able manage a purchase, they often face additional roadblocks and disparities.
Harvard University discovered that Black families pay higher interest rates on their homes than white families, even when both are considered "high income," or earning $75,000 to $100,000 annually.
Not only do black homes sell for less, but they are also appraised to have less value.
A number of studies in the past few years show that Black homeowners receive appraisals that are up to 23% lower than White homeowners for comparable homes.
There are multiple layers of racism at play here, and they're all intertwined. For example, people of color pay more for homes that are valued less, so there's a clear financial disadvantage from the start. This in turn makes it harder to build wealth for themselves and their families.
In addition to housing discrimination, Black Americans also face lender discrimination. This includes being denied mortgages or having more punitive terms such as higher interest rates and fees. Studies show that across all mortgage types, Black borrowers are 2-3 times more likely than white borrowers to be denied a loan. These disparities still exist even when accounting for credit score, loan amount, repayment capacity and other factors.
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About the Blogger:
April Carson is the daughter of Billy Carson. She received her bachelor's degree in Social Sciences from Jacksonville University, where she was also on the Women's Basketball team. She now has a successful clothing company that specializes in organic baby clothes and other items. Take a look at their most popular fall fashions on bossbabymav.com
To read more of April's blogs, check out her website! She publishes new blogs on a daily basis, including the most helpful mommy advice and baby care tips! Follow on IG @bossbabymav
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