Home ownership is a huge part of what makes families able to maintain and grow wealth over generations. But even decades after the civil rights movement, People of Color are disproportionately locked out of this path, keeping families, neighborhoods, and even whole cities economically depressed. Only 44% of Black Americans own their homes, according to the U.S. Census Bureau, compared with 74% of white Americans.

Above: The Heidelberg Project, a long-term art installation by artist Tyree Guyton, pays homage to Black Bottom, a historically Black neighborhood in Detroit, MI, where Guyton grew up. Parts of Black Bottom were paved over for a highway and other parts were not rebuilt after 1967 riots. Photo by Mathias Berlin, 2019.

Black Americans overall are greatly disadvantaged in building wealth. Black families especially face systematic barriers to getting out of previously redlined neighborhoods and build wealth at the same rate as their white peers. It isn’t for lack of trying. It’s a long, complex history and intertwined cycle of poverty that creates hurdles that People of Color must overcome before they can reach the goal of home ownership.

When people are not able to achieve home ownership in desired locations, they lose access to jobs, schools, and even health outcomes that would benefit individuals, society, and the economy as a whole. Solutions are needed to fix housing discrimination and poverty at both the individual and systemic levels to lift the entire economy. Radical approaches and rethinking are needed to make an impact for families and the systems that created these problems in the first place.

Building a Country on Racism

From the beginning of US history, European colonists knew that land and housing were valuable. Settlers violently “removed” Indigenous peoples on the North American continent and forced “treaties” under duress, creating a baseline of stealing and denying wealth from communities deemed lesser. This stolen wealth largely still hasn’t been returned.

And of course, white settlers also built wealth on the very lives of Black people, trafficked across the ocean and enslaved. After Black people were freed, they moved north, seeking job opportunities, in the Great Migration. However, jobs and wages for Black people were limited.

Meanwhile, former slave owners were compensated for their loss by an average of $300 for every enslaved person, which is worth over $5,000 today.

Discrimination and Civil Rights

After the Civil War, the Jim Crow era took hold, when anti-Black legislation legitimized racism. Legislators and land owners restricted the places People of Color could live. The government-sponsored Home Owners’ Loan Corporation made maps showing where large populations of Black people lived—colored in red—and designating those areas as risky to invest in. This is where the term “redlining” came from.

Banks did not often provide home and business loans to People of Color and, when they did, they added unfair high-interest rates for people living in those areas. The Fair Housing Act of 1968 intended to stop discrimination based on race, color, religion, and national origin when it came to the sale, rental, zoning, and advertisement of homes, but discrimination persisted. Black and Brown people that tried to buy homes outside of redlined areas had difficulty finding real estate agents that would show them the neighborhoods they wanted to live in, and banks that would give them loans.

“The Fair Housing Act recognized what many have known for generations—that where we live impacts nearly every part of our lives: from the schools our children attend, to the jobs we have access to, to the quality of the air we breathe,” said a Dept. of Housing and Urban Development spokesperson. “Housing is the foundation for a stronger, more connected society—just like our schools, roads, and highways.”

My parents experienced this first hand in 1990 and 2000 when they bought their homes. My mother, who is white, always met with real estate agents and negotiated contracts. It wasn’t until signing time that my Black father would show up. Once, the bank tried to re-negotiate the interest rate and my parents threatened to sue and file for discrimination. Even in 2021, my father got an appraisal for his home in Howard County, Maryland, and suspected it was low. When he then removed all the photos of our family and had a white friend stand in for him, the second appraisal came back $51,000 higher.

The Poverty Trap

This inability to create wealth through housing feeds into a larger poverty trap. When people are unable to move to better neighborhoods, when they are unable to access better jobs, when they are unable to create these jobs for themselves, the neighborhoods they live in reflect this.

Maps of areas most affected by lead can often be matched up to redlining maps, showing that lead poisoning—which can lead to developmental delays and even death—affects Black children at a greater rate. The CDC lowered the safe level of blood lead levels in 2021 to 3.5 micrograms, meaning more children could be suffering from lead poisoning than were previously diagnosed.

At the same time, schools suffer from a lack of funds and maintenance. Public schools in formerly redlined areas receive federal and state funds like other areas, but nearly half of a school’s budget comes from the local level like property taxes, according to Education Week. That means kids in neighborhoods with lower housing prices go to schools that have less funding, which may arise in the form of outdated lead pipes, lack of materials like new textbooks, or less equipment for science and art classes.

A Stanford study determined that the schools with the lowest teacher salaries also serve the highest demographics of children of color. In turn, these schools have more inexperienced teachers and higher turnover rate for staff. Housing in redlined areas is also less likely to have high-speed internet, further hindering families in times of remote learning.

The odds are already stacked against children growing up in formerly redlined and low-income neighborhoods, who must face systemic barriers in health, education, and finance from their homes, schools, and banks. While dismantling these systems cannot happen overnight, decades of innovative ideas and local trial and error have led to solutions that could be used to mitigate discrimination and poverty nationally.

Solutions: Past and Present

Historical documents from Baltimore, Cleveland, and Kansas City, show that “straw buys” helped Black families access white-only neighborhoods in the 60s and 70s. White couples would buy a home and then pass the sale and loan over to the other family—in Cleveland, entire organizations sprung up to integrate communities in this way, according to the Cleveland Restoration Society. Interracial bussing and lotteries into charter schools have taken away the educational barriers for some children.

Before the 2008 housing crisis, Black Americans were targeted by banks for subprime loans. Over a decade later, this discrimination is still being dismantled at the local and federal levels.

Supporting local and small lenders is a start. Lending institutions familiar with communities of color have seen success and low delinquency rates when they personalize their service instead of focusing on single numbers like rigid credit scores, as shown by data from the Federal Reserve and National Credit Union Administration. This may be especially true since the communities they serve are more likely to take out larger student loans and have a higher income-to-debt ratio.

Institutions like community development financial institutions, credit unions, and community banks are focusing on borrowers’ cash-flow and rental history payments more so than the credit score or lack of a score.

Some communities, like Cuyahoga County, Ohio, offer down payment assistance programs for low-income homebuyers who complete homeownership courses. In this case, potential homebuyers can receive 10% of their home purchase to use on their home or up to $14,900 for completing the course.

In 2021, The US Justice Department also launched the Combatting Redlining Initiative which aims to ensure fair lending practices and examine potential redlining with mortgage lenders as well as coordinate with State Attorneys Generals on violations.

At the local level, communities are also trying to reclaim neighborhoods that were destroyed in the name of convenience and capitalism. Citizen-led campaigns aim to remove the highways that were built in the 1960s on land that used to be thriving Black neighborhoods. These highways are now in disrepair and the people want them returned to walkable urban centers.

For example, Detroit’s Black Bottom neighborhood was demolished for I-375. Now, there are plans in place to remove a stretch of highway and replace it with a six-lane boulevard. Citizens are encouraging the planners to work with Black-owned businesses to reimagine what the historical district looked like instead of letting it fall prey to gentrification.

Additionally, the Biden Administration has proposed a $30 billion American Jobs Plan to invest in new Small Business initiatives including a $1 billion grant program through the Minority Business Development Agency.

A Not-So-Radical Solution for Poverty

While these housing solutions help individuals, the problem of wealth inequity remains. While it is possible to petition your local government officials to find solutions to housing discrimination in your area, the best way to break down these barriers is the most direct: money. Universal basic income (UBI), is a policy which gives a base amount of money to residents simply for living in an area.

This idea may seem radical, but it has been tried with success across the US. Stockton, California, studied the effects of UBI after a program called Stockton Economic Empowerment Demonstration (SEED), where it gave residents $500 per month from January 2019 to January 2021. In that time, employment increased as did physical and mental health. Residents who received the payment scored lower on a stress test than those in a randomized trial, and their stress continued to decrease in stress over time. People also started to pay more back in debts.

In a similar pilot program, members of the Eastern Band of Cherokee Indians in North Carolina have received $4,000-$6,000 in dividends from the reservation’s casino since 1997. A long-term study published in 2016 by Duke University researchers, called the Great Smoky Mountains Study, found that by four years of receiving this extra income, poverty rates had fallen by half for participants involved. After 10 years, the kids who were the youngest when the money started coming in were also less likely to have developed mental health issues or substance use disorders. They compared the findings to the non-Native children in the area who do not receive this additional income.

Gaining the Privilege to Plan

Mitigating financial insecurity through housing access programs and direct payments, opens doors to build wealth. People are no longer focused on making sure they have enough money to find their next meal or pay their utility bills. They begin to plan ahead, thinking about their goals and legacies they want to leave for their children. Instead of focusing on the short-term and just raising their children to survive, adults can look for meaningful employment and begin to save to buy homes.

Hope Lane-Gavin, fellow for health equity at The Center for Community Solutions, says that sometimes the best thing that people of means can do is to talk about the subject and find the angle that they know resonates like cost efficiency. These people may have the time and ability to take off work and go to a public forum.

“There are ways rich people and white people can raise awareness and say things we can’t. It happens from offices to the White House,” Lane-Gavin says. “Use your privilege and your voice. Sometimes it’s not a matter of they don’t care or don’t believe it. They just don’t know.” ✺

Aja Hannah is a writer, traveler, and mama. Her articles have been featured nationally and internationally in publications like The Progressive, The Independent, and Hawaii Business Magazine. She’s the author of two books and hundreds of articles.