Racism and Housing: Some Solutions Proposed by MHCH

22 Jun


Nine in ten blacks say African-Americans have not achieved equality in this country. Four in ten are skeptical that they ever will. Yet thirty-eight percent of white Americans think “our country has made the changes needed to give blacks equal rights with whites.”  Facts suggest we have a long way to go to achieve economic equality between white and black Americans.  According to a 2020 study by the Brookings Institute, “close examination of wealth in the U.S. finds evidence of staggering racial disparities. At $171,000, the net worth of a typical white family is nearly ten times greater than that of a Black family ($17,150) in 2016. Gaps in wealth between Black and white households reveal the effects of accumulated inequality and discrimination, as well as differences in power and opportunity that can be traced back to this nation’s inception. The Black-white wealth gap reflects a society that has not and does not afford equality of opportunity to all its citizens” https://www.brookings.edu/blog/up-front/2020/02/27/examining-the-black-white-wealth-gap/).

The insidious force of unconscious bias and the long shadows of systemic racism persist in housing and land use policy, banking and insurance programs, that affect equity of housing opportunity. This often leads to displacement and homelessness among African Americans. Systemic racism also makes it harder for African Americans to purchase and keep their homes or stay in their apartments. That’s why systemic reforms such as affirmatively furthering fair housing and other policies are needed as you will read below. Please prayerfully consider each of the 9 ideas below and come up with more idea of your own.

Some basic questions also need to be addressed. Is housing a right or a commodity? The concept of housing as a right is accepted in the UK and other parts of Europe, where low income people receive financial stipends so they can afford housing in the private market.Another important question: should cities promote racial and socio-economic diversity? The city of Pasadena has a beautiful vision of housing justice on page 1 of  in its Housing Element:

All Pasadena residents have an equal right to live in decent, safe and affordable housing in a suitable living environment for the long-term well-being and stability of themselves, their families, their neighborhoods, and their community. The housing vision for Pasadena is to maintain a socially and economically diverse community of homeowners and renters who are afforded this right.

The policies listed below could help Pasadena to realize this vision.

  1. Support Affirmatively Furthering Fair Housing (AFFH).  The Fair Housing Act of 1968 prevents discrimination based on race, but unfortunately it is hard to implement because it is underfunded and complaint-based. With the severe housing shortage, many are fearful to complain about discrimination in housing because they are afraid to lose their housing. Additionally, there is little funding to test the market, which requires that  Blacks and Whites show up to apply for the same apartment or home and record the findings. AFFH  strengthens the Fair Housing Act so that housing discrimination can be demonstrated not just by individual cases, but also by statistics showing racially biased disparate impacts: https://calbudgetcenter.org/resources/the-racial-wealth-gap-what-california-can-do-about-a-long-standing-obstacle-to-shared-prosperity/ 

Trump gutted AFFH, see: https://www.americanbar.org/groups/state_local_government/publications/state_local_law_news/2019-20/spring/the-trump-administrations-proposed-rule-change-the-2015-affirmatively-furthering-fair-housing-rule/ 

And senators sought to revive it: https://www.banking.senate.gov/newsroom/minority/senators-oppose-hud-rule-that-rolls-back-efforts-to-address-housing-discrimination-segregation

California Governor Jerry Brown on September 30, 2018, signed a fair housing bill (AB 686),to affirmatively further fair housing in California. Starting on January 1, 2019, hundreds of cities, counties, and state agencies in California were supposed to take proactive measures to fix housing inequality related to race, national origin, color, ancestry, sex, marital status, disability, religion, and other protected characteristics. All cities and counties were supposed to reach out to and engage constituents on issues of inequity and discrimination in housing. In Pasadena it would be important to know what percent of the affordable homeownership units with Habitat, Heritage Housing Partners and Inclusionary units have been accessed by African Americans. Beginning in 2021 this new law will require each city and county to include an analysis and action plan to combat housing discrimination as part of its General Plan. see: https://nlihc.org/resource/california-enacts-affirmatively-furthering-fair-housing-law It is important for advocates to make sure that Pasadena is implementing AB 686.

  • Right-to-return to address displacement due to gentrification.  Gentrification has become a major problem in Pasadena as well as other cities, leading to a mass exodus of African Americans. Due to rising housing prices and other factors, Black population dropped 24% in Pasadena from 2000-2010. Nearly one-quarter of Pasadena’s African American residents left the city during that period, replaced mostly by Asians and Pacific Islanders, according to 2010 Census figures. As of 2020, only 9.7% of Pasadenans are Black. Some have been priced out, others cashed out, selling their homes and moving to less expensive areas. Portland, Oregon, and San Francisco, CA, are experimenting with a policy to reverse this trend. It’s called the right-to-return. This policy prioritizes displaced minorities for affordable housing units. While there are some legal and other challenges, this policy could help return some of those displaced in Pasadena. See http://portlandobserver.com/news/2016/apr/26/right-return-home/



Local: San Francisco’s right to return policy: https://sfmayor.org/article/mayor-london-breed-celebrates-san-franciscos-right-return-ordinance and some efforts to look at this in other areas: https://www.lewis.ucla.edu/residential-preference-policies/   and https://www.yimbylaw.org/right-of-return

  • Explore the possibility of using individual Development Accounts (IDA) to promote homeownership by african american and other minorities who have faced discrimination.  An IDA is an asset building tool designed to enable low-income families to save towards a targeted amount usually used for building assets in the form of home ownershippost-secondary education and small business ownership In principle IDAs work as matched savings accounts that supplement the savings of low-income households with matching funds drawn from a variety of private and public sources. Considering how Blacks disproportionately lost much of their wealth after the 2008 melt-down due to discriminatory practices by predatory banks, it makes sense to set up a fund to help African Americans save the money needed for home ownership. This might be funded through the Community Reinvestment Act (CRA) whereby banks are required to help meet the credit needs of the communities in which they operate, including low- and moderate-income (LMI) neighborhoods. Banks are required to reinvest in their community could help to create an IDA program tied to a right-to-return policy? To learn more about IDA, Individual Development Account see: https://www.freeandclear.com/programs/individual-development-account-to-buy-home.html

Churches might also help with IDA. For example, Lake Ave church raises $90,000 or more a year to keep folks in their homes. Maybe churches would be open to support some percent of matching and/or local realtors. This could possibly be done with some kind of scoring of points to qualify that would include proof of displacement from certain neighborhoods showing the disparate impact.  

Create IDAs for all youth under 18, and many other public investments in racial equity. See the 35 goals that the mayor of Hyattsville, Maryland is recommending https://route1reporter.com/2020/06/02/hyattsville-mayor-outlines-35-racial-equity-policy-goals-for-city/

  • Create a state-level estate, investor tax and other taxes to help bring about shared prosperity.

An estate tax is levied on large accumulations of wealth that are transferred from the estate of people who have died to their beneficiaries.[66] Ideally, the US would have a robust estate tax that would reduce wealth accumulation, with the proceeds invested in wealth-building strategies designed to level the playing field for all Americans. However, the federal estate tax has been weakened dramatically since the late 1990s to the point that nearly all estates are exempt from this tax.

California should create its own estate tax, joining 18 other states and the District of Columbia that tax inherited wealth. With such a tax, California could both reduce wealth disparities and use the resulting revenues — potentially in the billions per year — to fund wealth-building policies or other public investments that would benefit the vast majority of Californians.

Another tax or fee that should be considered would be on flippers and global investors who push prices up. 

  • Support homeownership for low-income Californians with Shared Equity programs and CLT—Community Land Trusts.

To ease the burdensome housing costs and help Californians build wealth, state policymakers can further help low-income Californians become homeowners, which could benefit Californians of color. One option is to invest in shared equity programs, which offer subsidies to lower the initial costs of a home for new buyers.  When homeowners sell their home, a portion of the proceeds is reinvested in the program, allowing future low-income buyers to afford a home and keeping the program sustainable. California could significantly invest in affordable homeownership by providing funding for shared equity housing for those otherwise priced out of the housing market and tie funds to long-term affordability requirements. Local governments and nonprofits could be responsible for monitoring units and resales and offering support to homeowners.

To help fund this investment, California should consider eliminating the state mortgage interest tax deduction. The deduction allows households to reduce their taxable incomes by the value of qualified mortgage interest expenses paid on up to $1 million in debt and primarily benefits wealthy homeowners. This tax break exacerbates racial and ethnic disparities, with white families not only more likely to own homes, but also to have more valuable homes.

Community Land Trusts were birthed after the civil rights movement to address economic rights for Blacks. The first one was created by Blacks and for blacks in Albany, Georgia, in one the toughest places in the US to gain civil right. The land is held in common, and any improvements on the land, including housing is kept permanently affordable. Today there are over 250 CLT in the US and national network to help with technical support to start and maintain CLTs with many Blacks on their board and staff and leadership teams.  One of the earlier ones is in Irvine, now supporting cities in Orange County. We have a team hoping to start one in the San Gabriel Valley. You might want to join this effort. If so, contact:  Connie@makinghousinghappen.com

  • Create a Luxury Tax to help Achieve Racial Equity in Housing Outcomes:

In partnership with the Consumer Health Foundation and the Meyer Foundation, the D.C. Policy Center asked a cross-section of community organizations, traditional and low-income housing developers, researchers, and other stakeholders to answer the question: What is the most important public policy that could increase affordable housing, reduce housing inequities, and create a more inclusive D.C.? .

Creating a tax on luxury homes that could be used to expand rent subsidies. An additional tax on the sales or values of $1 million homes could generate additional revenue for housing assistance that could help Washingtonians remain in their city. A 0.1 percent luxury tax on homes valued at $1 million or more would have generated $25.4 million in property tax revenue in 2017. A 1 percent luxury transfer tax on home sales of $1 million or more in 2015 would have generated $9.8 million in revenue. 

The city must also invest in state-of-the-art public housing and the financing of limited equity co-ops.

Vouchers hold the unique potential to unlock high-opportunity neighborhoods precisely to those who have historically been excluded from such areas. Moreover, vouchers can enable households to remain in, or move back to, a neighborhood transformed by gentrification—thus curtailing or even reversing the threat of displacement due to rising housing costs.

  • Create a resolution calling for the Planning Department to center racial and social equity in its work by developing strategies to counter structural racism in collaboration with communities of color. Also, instruct staff to assure its hiring practices to reflect The City’s demographics and to build establish metrics to track accountability.  One resolution apologized for past housing policies like redlining that intentionally segregated and forcibly removed communities of color, during a period of urban renewal, while failing to intervene and course-correct moving forward.
  • Create racial equity frameworks and other measures for nonprofits:



  • CREATE MORE FEDERAL FUNDING TO BUILD AFFORDABLE HOUSING AND PROVIDE HOUSING VOUCHER.  In the US over 6 million people are paying more than 50% of their income for housing and desperately need help. People of color are disproportionately burdened by unaffordable rents and many end up homeless. “Black people experiencing homelessness continue to make up a disproportionate share of the total homeless population across the nation, and Pasadena is no exception. Data from the 2020 Homeless Count reveal persistent and deeply rooted racial inequities, with 31% of people experiencing homelessness identifying as Black or African American, despite only representing 10% of Pasadena’s general population according to the American Community Survey (ACS)

 Census Bureau data.’ Page 7 of Pasadena’s 2020 homeless count: https://pasadenapartnership.org/wp-content/uploads/2020/06/Pasadena-Homeless-Count_2020-FINAL.pdf

Today we have a lottery system in which a few receive vouchers while the many are on waiting lists and never become “winners.”

US spends over ten times more on housing subsidies to wealthy homeowners than on affordable housing. According to a 2019 Report by the Brookings Institute, over 70 billion dollars in Mortgage Interest Deduction go to homeowners. Many are wealthy and white (making over $100,000 per year) and receive 77% of tax benefits. The cumulative tax benefits for homeowners are estimated to be $671 billion. In comparison, the U.S. spends roughly $46 billion a year on affordable housing.  Policies need to change so that low-income homeowners and renters receive their fair share of government subsidies. This would help equalize the enormous wealth gap between whites and Blacks. https://www.brookings.edu/opinions/chipping-away-at-the-mortgage-deduction/#:~:text=The%20mortgage%2Dinterest%20deduction%20has%20been%20expensive%2C%20reducing%20federal%20revenues,down%20to%20around%20%2430%20billion.

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