Nearly 90 years ago, Kelly Miller (1863-1939), a Black sociologist and mathematician, said, “The Negro is up against the White man’s standard, without the White man’s opportunity.” As the first Black man to enroll as a graduate student at Johns Hopkins University in 1908, Miller also authored a book entitled “Race Adjustment,” published in 1908.
Ironically, despite the passage of time, Miller’s words express the same sentiment held today by many Black Americans. As a people and across succeeding generations, we have held fast to our hopes for a better life. Yet it is painfully true that many opportunities enjoyed by other Americans have been elusive for people of color.
Noted author and journalist Ta-Nehisi Coates expressed a similar view during his June 19 Capitol Hill testimony on reparations.
“Enslavement reigned for 250 years on these shores,” noted Coates. “When it ended, this country could have extended its hallowed principles—life, liberty, and the pursuit of happiness—to all, regardless of color. But America had other principles in mind. And so for a century after the Civil War, Black people were subjected to a relentless campaign of terror, a campaign that extended well into the lifetime of Majority Leader McConnell.”
While economists, public policy think tanks and other entities may sing a chorus of how well the American economy is performing and expanding, people of color—especially Blacks and Browns—have yet to see or feel economic vibrancy in our own lives – particularly when it comes to housing and homeownership.
On June 25, Harvard University’s Joint Center for Housing Studies (JCHS) released its annual report, “The State of the Nation’s Housing.” One of the housing industry’s most broadly anticipated and cited reports, it chronicles recent trends and issues.
“The limited supply of smaller, more affordable homes in the face of rising demand suggests that the rising land costs and the difficult development environment make it unprofitable to build for the middle market,” said Chris Herbert, JCHS’s managing director.
Among this year’s key findings:
—Since 2018, the monthly housing payment on a median-priced home has been $1,775;
—In 2019, the cost of a median-priced home rose by 4% to $261,600 when a comparable home in 2011 was priced far lower at $177,400.
—This rise in home prices is also the seventh straight year that median household incomes have failed to keep pace in 85 of the nation’s largest 100 markets.
—Nearly $52,000 would be required to make a 20% down payment on a median priced home. Even if buyers opted for an FHA 3.5% down payment mortgage, more than $9,000 would be needed to pay it, closing costs, and related fees;
—In rental housing, 4 million units of housing priced at $800 or less were lost between 2011 and 2019. Also, since 2010, renters now include consumers earning $75,000 or more.
For families who already own their own homes, these findings signal that their investments are appreciating, growing in equity and wealth.
But for those trying to make that important transition from renting to owning, it’s a very different outlook. As rental prices continue to soar and moderately priced apartments disappear from the marketplace, both prospective homeowners and current renters face a shrinking supply of affordable housing.
When homeownership is possible, housing costs can be better contained with fixed-interest rate mortgages, tax credits, and eventual equity. Even so, the Harvard report finds that only 36 percent of all consumers could afford to buy their own home in 2018. With higher priced homes in 2019, the affordability challenge worsens.
“It is equally noteworthy that once again this key report shares how consumers of color continue to face challenges in becoming homeowners,” noted Nikitra Bailey, an EVP with the Center for Responsible Lending. “According to the report, only 43 percent of Blacks and 47 percent of Latinos own their own home, while White homeownership remains at 73 percent.
“This 30-percent disparity deserves further examination and proportional remedies,” continued Bailey. “Greater access to safe and affordable credit, better fair housing enforcement, preservation of anti-discrimination laws – including disparate impact – can play a role in eliminating homeownership gaps. Further, as the future of Fannie Mae and Freddie Mac are publicly debated, a renewed commitment to serve all creditworthy borrowers must be embraced.”
Calvin Schermerhorn, a professor of history in Arizona State University’s School of Historical, Philosophical and Religious Studies and author of “The Business of Slavery and the Rise of American Capitalism, 1815-1860,” holds similar views to those expressed by Bailey.
Charlene Crowell is the deputy director of communications with the Center for Responsible Lending. Contact her at Charlene.crowell@responsiblelending.org.
