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Supporting racial equity means supporting affordable homeownership

June is Homeownership Month and it cannot be missed that Minnesota has one of the highest homeownership rates in the nation. For white households. And one of the worst racial disparities in the nation with black households owning homes at 26%.

MinnPost photo by Peter Callaghan
The conversation about racial disparities in Minnesota is not new. We’ve spent the past several years, decades probably, talking about the racial inequities in Minnesota with our state being home to some of the worst racial disparities in the nation – which has been consistently reported here, and here, and here. And they are being discussed and resurfaced again as we see a recommitment to civil rights, racial equity and anti-racism in our community.

June is Homeownership Month and it cannot be missed that Minnesota has one of the highest homeownership rates in the nation. For white households. And one of the worst racial disparities in the nation with black households owning homes at 26%. This has been well documented and discussed, as leaders have prioritized this conversation. A statewide scorecard was launched earlier this year to keep track of our progress on these very issues so the talking turns into action, and yet  we have not improved this gap. In some areas, we’re seeing the issue worsen as home prices increase and wages remain stagnant.

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A few articles have begun to highlight the connection between systemic racism and affordable housing, even affordable homeownership. Affordable homeownership advocates have known this for decades; it is one of the key reasons for our work. We know it is true that affordable homeownership has been out of reach for communities of color, and we know it is true that our state (and many others) have used racist policies to keep it out of reach. The Mapping Prejudice project has been recording these intentional efforts and continues to find more through deed restrictions and covenants.

Counseling and coaching aren’t enough

In an attempt to solve these inequities, we’ve focused on financial literacy training, coaching and goal-setting programs, social service supports, homebuyer education … and many other things that are designed to educate, empower, support and lead to success in homeownership. These are all good things – knowledge is power and an informed, educated consumer is more successful in the market. Housing and financial counseling and coaching are valuable and important tools – but they are not enough. If they were, this opportunity gap would be closing, and it is not.

Cristen Incitti
Cristen Incitti
Our market has an access problem. Both in the home purchase process and in the lending process. As we’ve entered another economic crisis, lenders have tightened their lending criteria. This will impact communities of color at greater proportions than white communities; we saw this during the Great Recession, and we are seeing it again now.

Even if our lending partners offer new products that are also safe for consumers, we still have a supply problem. The median sales prices in April for a Twin Cities home is $315,000, with the average sales price for the state reaching $305,000 according to the Minnesota Realtors ® April Housing Statistics report. Basic economics will tell you that to decrease price, we must increase supply. Developers, funders, and communities need to come together to increase the number of affordable homeownership opportunities created in our communities.

The Legislature’s role

In special session, our legislators should focus on a bonding package — one that includes housing infrastructure bonds with an expanded use for single-family affordable homeownership development. As they consider what supports our economy will need post-COVID, we need our state to invest in resources that keep people in their homes – funding for foreclosure prevention counseling, grant programs for homeowners to cover missed mortgage payments, and deeper investments in homeownership production.

Now and going forward, we must center increasing access for Black, Indigenous and communities of color when making policy and funding decisions regarding affordable homeownership preparation, production and preservation. Philanthropic and public partners must support increasing supply through production, along with supporting down-payment assistance funding and housing counseling programs. These programs have worked before; when combined with an increase in supply, we can increase access and opportunity.

We need to continue to invest in these resources and tools, while also looking at the homeownership system and what changes need to be made as we work toward creating a more equitable housing market.

Cristen Incitti is the executive director of Habitat for Humanity of Minnesota (@HabitatMN). Habitat for Humanity has been creating affordable homeownership opportunities in Minnesota for more than 30 years.

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