The Road to Family Wealth Begins with Owning a Home

A Black nonprofit’s push to get more people in the door.

Written By: Marc L. Watts

Armed With Fresh Approach The Forum Wages War Against Racial Injustice

Data, Discourse and Design Being Deployed Against Pandemic Racism.

[SAINT PAUL-March 7, 2024] The Minnesota real estate forecast indicates a robust demand for homes right now, which is good news if you are a property owner. It’s a seller’s market. Home mortgage rates are hovering around 6.7% and already here in 2024, according to the Minneapolis Area Realtors, home showings have increased, nearly 10,000 more per week, compared to this same time last year. It’s not because Black Minnesotans are buying more homes. In fact, Black buyers are being squeezed out of the homeownership market, as are many potential home buyers across the racial spectrum. The factors, however, that are preventing families from owning their own home, seem to impact the Black population more severely.

The widening homeownership gap between white and Black households has festered for several decades in Minnesota. This disparity is no more glaring than in the Twin Cities, where roughly 70 percent of white families own homes, yet only 20 percent of Black families do. Yes, you’re reading that correctly. The 50 percent homeownership gap is one of the largest for any metropolitan area in the country, exceeding the national average by a staggering 20 percentage points. Just how dire does this disparity have to widen before someone does something? To term it a crisis would be somewhat of an understatement. The dismal economic indicators have been there for years, but let’s pour more fresh fuel on the fire.

In new research conducted with HIT Strategies, the African American Leadership Forum [The Forum], found that more than half of Black Minnesotans surveryed listed “affordable quality housing” as one of the top concerns facing their neighborhoods. The data was drawn from 800 Black families across the state in 2023. Furthermore, 57 percent of Black households listed the state’s “rising cost of living” as their top concern. The survey, conducted in two waves last year, is groundbreaking because of its sample size and geographical stretch, which included not just Black Minnesotans in the Twin Cities, but from Rochester, Duluth, St. Cloud, Mankato and other cities as well.

ADVOCACY IN ACTION

Last December 7th at The Humphrey School of  Public Affairs, The Forum met with Black lawmakers from the Minnesota House and Senate to share this data and find common ground on policy priorities heading into the 2024 session. If the response from that roundtable discussion is any indication of what to come, perhaps some economic relief for Black Minnesotans is on the horizon. The Forum is now a “think-and-do tank” with the intent to create Black-Centered change with opinion research that informs systems and influences policy. Some of the “thinking” is gathering data, and some of the “doing” is action-oriented advocacy such as this.

President of the Minnesota Senate, Bobby Joe Champion, was one of the legislators who attended The Forum’s convening last December. Sen. Champion got an earful from The Forum’s Data, Research and Policy [DRP] team, and he liked what he heard. In fact he seemed quite surprised about the volume and reach of the data. “This is a policy year so if there are any more issues and ideas that you [The Forum] are passionate about, we’d love to know about them. And please send your research to us all,” Champion stated at the roundtable meeting.

In addition to the insightful batch of statewide research, Sen. Champion and others have received The Forum’s current Legislative Priorities package. 2024 marks the second consecutive year the organization has engaged in advocacy and policy agenda based on what their teams have learned in focus groups, design sessions and community convenings. The Forum is a non-direct service nonprofit, meaning its special sauce lies in–how it generates discourse on data research, how it converts data into design solutions and advocacy, how it develops a vast pipeline of leadership partners and how it disseminates this influential work—to fight anti-Black racism in manifesting racial equity through collective action. Economic prosperity and generational wealth building for Black Minnesotans, stand tall as two of the agency’s impact areas. Economic wealth and equity as in, Black people being able to buy more homes.

A Pattern of Neglect and Climbing

According to the Twin Cities Urban Institute, the Minneapolis-St. Paul homeownership racial gap has increased by 10 percentage points since the year 2000. So in other words “inequality has worsened” and the average quality of life for Black Minnesotans is crumbling even further in the 21^st century. It wasn’t always this bad though. In 1950, when racial discrimination was legal throughout the state, the Minnesota Black homeownership rate was a healthy 46%. That according to the Federal Reserve Bank of Minneapolis, but that number has spiraled downward ever since. The 1968 Fair Housing Act was supposed to put the brakes on the slide, but vestiges of what was once on the books, legalized exclusion, still remain. The Forum’s 2023 data perhaps suggests that some parts of the old way of life, are not just alive and well, but thriving today.

Call it whatever you want to call it, but it amounts to systemic racism, decades of it. Property deed racial covenants, redlining, predatory lending practices, gentrification, artificially low credit scores, unemployment, high debt, lack of financial literacy, escalating property taxes–have not only displaced Black Minnesotans, but prevented them from purchasing homes. Quite troubling one might say, for the nearly 135,000 population increase in the Twin Cities, of “Black or (East/West) African American” people, since the year 2000.

BUILDING GENERATIONAL WEALTH

What’s even worse, homeownership is the substructure of how families build generational wealth; a permanent real estate investment passed down to children, that often appreciates in value over time. Homeowners leverage equity in their homes to pay off tuition, secure funding for their kids to start a business or invest in a new home. Yet with access to owning a home here in 2024, still inequitable, the stable road to Black family wealth is at best questionable. Lack of homeownership presents Black families with a dubious prosperity disadvantage, while The Forum’s data underscores growing anxiety of the rising inflation.

The Minnesota cost of living is about $45,000. That’s 3 percent less than the national average according to the Council for Community and Economic Research (C2ER), which qualifies this state as a “moderately priced” place to live. Factoring legacies of structural exclusion, however, Black families find themselves disproportionately challenged to stay afloat.

The rising costs of rent, childcare, healthcare, transportation, fuel, food and utilities are the significant expenses that impact a potential homeowner’s ability to buy. The Forum’s survey respondents listed access to financial literacy resources, debt reduction assistance and greater inroads to acquire valuable skills, as their top three policy ideas that would help secure a brighter economic future, generating more savings to invest in a home.

According to the Minnesota Zillow Home Value Index, a leading real estate platform, the average value of a Minnesota home is $316,978. Over the years a barrage of solutions has been explored by researchers and policymakers to reduce the state’s homeownership gap. Credit score improvement programs, lenient mortgage criteria, restricting the number of rental properties investors can hold, excessive taxation to discourage developers from over-purchasing and the placement of more people of color in relevant positions within the mortgage lending process—just to name a few.

Previous remedies have proved largely ineffective, while numerous explanations abound, as to why efforts to improve the conversion rate for Black home mortgage applicants, have failed. In 2024, it’s inconceivable to imagine that a dilemma about something so essential as an affordable “home,” could linger to this extent without some sort of mandated intervention. What some might call a stumbling block, reversibly is viewed by The Forum as a stepping stone. More “doing” and time to act.

The Policy Imperative

To put it plainly, The Forum, is now waging a smart war, backed by data science, responsible activism and advocacy, to cure the evils of racial injustice that have lingered far too long across “The North Star State.” An intricate delivery web of services, backed by municipal policy ordinances and local governments, regarding financial services, enterprise, occupations, public safety, education and health, operates in a 24-hour cycle across the state. But these very systems, monitored by policy oversight, do the majority of Black Minnesotans arguably, more harm than good. On paper at least, the setup has supposedly been designed to be equitably inclusive, yet in reality it has turned out to be structurally exclusive. This explains also why The Forum is fixated on change through policy agenda. Bad policies have wronged the system. So through better policies, the system must be righted.

There’s one more key component about how the organization handles its business that needs to be highlighted. Policymakers take note. With the 2024 Minnesota legislative session now underway, The Forum’s recommendations and how its research, policy and design teams arrive at conclusions, are entirely different from a process standpoint, than any other nonprofit. And this is how.

BLACK-CENTERED DESIGN

The Forum’s methodology known as Black-Centered Design [BCD], implores their data specialists to connect deeper with Black community leaders and residents. This in turn provides The Forum’s design specialists greater access to the root social causes of the problem and the people suffering from them the most. Therefore, the solutions that emerge from BCD hold far more value, than recommendations from other think tanks that are merely quasi-connected to community.  In other words, if your intention is to truly solve something, you might want to get as close as you can to the problem. That’s exactly how medical doctors find cures. Yet over the years, this is not how solutionists have attempted to cure the evils of racism, and there’s no shortage of doctors who term racism a disease. Some scholars would even argue it’s connected to mental health.

Two months ago at The Forum’s Black policymaker’s roundtable, Representative Cedrick Frazier who represents District 43A, comprising the cities of New Hope and Crystal, acknowledged The Forum’s new data-forward approach and its continued immersion into Black communities across the state. “I’m really glad that you [The Forum] are in this space. It’s a voice that can be persuasive and bold. It’s a voice that can be strong. And it’s a voice that’s been needed for a long time.”

It’s a voice certainly, The Forum promises to amplify. In the coming weeks the organization promises more batches of data to be released, regarding two other impact areas, education and public safety. The data findings, advocacy agenda and recommendations will all be rolled into a single dossier, “a platform of community driven solutions to address the complex systemic challenges,” what The Forum is calling the Black Agenda for Change.  “A blueprint to resolve issues” that hinder equity, it’s scheduled to be fully published early next year, with some of the first sections having already been released. While equity might yet still be a distant reality, that shouldn’t deter The Forum from fighting for it, with a mighty imagination. A little push from policymakers would go a long ways in the posterity of Black Minnesotans playing an equitable role in the long term future of the state’s economy.

This writer even imagines one day, writing a story of progress. A story of Black Minnesotans configuring prominently in the state’s growth of homeownership, along with playing a vital role in Minnesota’s health and well-being. Yet across the social disparity spectrum Minnesota is leading in too many of the wrong categories. Transformative change is so long overdue. Black Minnesotans deserve so much better, especially amidst the most enduring challenges of our time.

Marc L. Watts is a Former International Correspondent with CNN. He holds a Master’s Degree in Political Science from the University of Minnesota and wrote his thesis on apartheid in Southern Africa. Marc covered crime, courts and urban communities in a 20-year on-air career that began at WCCO-TV in Minneapolis. He taught journalism at Northwestern University and now Marc works as the Chief Brand Officer for the African American Leadership Forum.