How Racism Undermines Black Homeowners

 Despite gains in education, income, and employment most blacks do not own a home. In fact the gap is wider now than fifty years ago with only 44.1% of blacks compared to 74.5% of whites owning a home. While the Fair Housing Act of 1968 outlawed discrimination in the sale, rental, and financing of homes, blacks are still frequently denied loans compared to similarly situated whites. The same thing is true when paying interest on a mortgage. In 2017 J.P. Morgan Chase settled a federal lawsuit for $55 million alleging discrimination against at least 53,000 black and Hispanic borrowers who were charged more for loans than whites with similar credit profiles. All of this is compounded by the systemic devaluation of homes in mostly black areas and neighborhoods. This means blacks gain less wealth from their property or money when selling it. 

Between 2004 and 2008 blacks were consistently denied mortgage loans at higher rates than whites according to the Home Mortgage Disclosure Act. 2007 was the highest year with blacks being denied loans at a rate of 35% compared to just under 15% for whites. Those rates did decline to little over 15% for blacks and slightly over 5% for whites in 2018. What's going on here? Maybe it's not race. What about debt or credit ? Blacks are twice as likely as whites to have student loan debt over $ 10,000 dollars. When it comes to credit which essential to getting loans the Urban Institute found only 20% of blacks scored 740 or higher which is the best score for most lenders. However credit scores only accounted for 22% of the gap between blacks and whites. Even when blacks get loans they are charged more than similarly situated whites. 

Raheem Hanifa with the Harvard based Joint Center for Housing Studies found blacks with incomes of $75,000 to $ 100,000 paid a higher rate of interest at 4.125% compared to whites with incomes of $ 30,000 who paid 4.16%. Blacks with incomes of $ 30,000 or less paid 4.267%. For blacks in the $ 30,000 to $ 44,999 income rage the median interest rate was 4.506%. For whites it was 4.213%. 

Even when blacks get loans at comparable interest rates to whites their property is systematically devalued at levels of 21 to 23% when black homes are located in mostly black areas or neighborhoods according to the Brookings Institute which looked 113 metropolitan areas across the U.S. This was after adjustments for size, age, and physical condition. This problem is compounded by racially biased home appraisals. In February of 2023 Paul and Tenisha Tate-Austin of Marin City, CA just reached a settlement in Federal lawsuit.

In 2016 the couple bought a home listed at $ 500,000. They later renovated the property adding up to 1000 square feet. The Austins then sought refinancing to pay for the work. Their lender assigned a white Appraiser named Janette Miller to look at the property who valued the house at $ 995,000. This was despite the fact the house had been appraised at 1,450,000 a year earlier. The Austins could not believe it. They told their lender they disagreed and were concerned race was an issue. They removed any clues or signs that a black person lived in the home. They also had a white friend stand in for them at a second appraisal that came back at $ 1,482,000. 

Some people are still not convinced that systemic racism has anything to do with these disparities. They will wrongly question blacks spending habits, willingness to save or ability to manage their money. They will say that blacks aren't smart or responsible with their finances. However blacks are no better or worse than whites. The fact is we still have a race problem despite the progress America has made. Owning a home provides stability. It is an important source of intergenerational wealth too. Everything we believe about individual freedom and economic prosperity is tied to private property. Having your own home is the most basic example of that. Systemic racism undermines black homeownership. This is a matter for both political and business leaders. More importantly, it should be a reminder to blacks that our struggle for freedom and equality continues. With so much talk about reparations, police brutality, killings, and the controversy surrounding the teaching of black history in schools; we shouldn't fail to consider the importance of homeownership to our collective wellbeing. If there's a reason for protest or advocacy this is one.

SOURCES 

https://www.brookings.edu/essay/homeownership-racial-segregation-and-policies-for-racial-wealth-equity/ 

https://www.brookings.edu/research/how-racial-bias-in-appraisals-affects-the-devaluation-of-homes-in-majority-black-

https://www.jchs.harvard.edu/blog/high-income-black-homeowners-receive-higher-interest-rates-low-income-white-homeowners 

https://www.reuters.com/article/us-jpmorgan-lawsuit/jpmorgan-agrees-to-55-million-settle-of-mortgage-discrimination-complaint-source- 

https://abc7news.com/wells-fargo-lawsuit-racism-allegations-lending-discrimination-civil-rights-

https://www.msn.com/en-us/money/companies/column-wells-fargo-denied-well-off-borrowers-low-

Singles Are Struggling Economically

 " I'm old enough to still remember a time from the mid 1970s until the early eighties when a high school diploma was enough to get you a decent job, an apartment, and a used car. You could even work a fulltime minimum wage job in a store, warehouse, or service firm and live decent. For people in manufacturing, construction, or the public sector it was even better. College graduates had it made. Fulltime work took care of your basic needs and there was room for improvement. Today none of this is the case. The economy and society have changed for the worse." I wrote that in September 2022 about working people in general. But now when I think about single people it makes a lot of sense. They are struggling economically. In fact, the number of unmarried people without a partner age 25 to 54 is up from 29% in 1990 to 38% in 2019.

I'm in my mid-fifties and have been divorced for over twenty years. My children are all grown now. When they were young, I worked two jobs and paid child support. It's not easy paying rent, a car payment, insurance, or emergency expenses if you're not married or don't have a partner. For the last decade I've lived with my elderly mother. We pool our resources and make out alright. However I work with men who are divorced or never married and they struggle. The old saying is very true - It takes two. None of this implies married people or single mothers have it easy. They don't. In this economy I call Predator Capitalist it's hard on most people who aren't rich and work for someone else. But it's clear that having a spouse or partner helps.

Consider these facts. 

Singles are less likely to work, have a college, and make less money than married people or those living with a partner. 

 73% of single men work compared to 91% of married men. For women 77% of single women work compared to 74% of partnered women. 

Between 1990 and 2019 single men saw their earnings drop 4% compared to 0.9% for single women. However partnered men saw a 7% increase. Partnered women saw their earnings increase 48%. 

Median income for partnered men was $ 57,000 compared to $ 35,600 for single men. For women with a partner, it was $ 40,000 compared to $ 32,000 for single women. 

For the elderly things get even harder. According to the Social Security Administration while poverty among seniors is low. For those who live alone the rate is higher: 

The never-married elderly (aged 65 or older) have the highest poverty rate among all groups, followed by those who are divorced and widowed. The overall elderly poverty rate is almost two-thirds higher among women than men with 12 percent of women in poverty compared with 7 percent of men. Unmarried women—including those who are widowed, divorced, and never married—are significantly more likely than unmarried men to be poor. The unmarried elderly are disproportionately poorer than the married elderly. Never-married individuals represent about 5 percent of the elderly, but 12 percent of the elderly poor. Likewise, divorced individuals make up 12 percent of the elderly and 20 percent of the elderly poor. Widowed individuals make up a quarter of the elderly, but 37 percent of the elderly poor.  

While the poverty rate for non-elderly seniors (without dependents) is 9.4% there are millions of people struggling to survive close to poverty. Think about that. People who struggle to pay rent, eat healthy, and pay for healthcare. 

Some will say the tax code wrongly favors people with children especially married people. Others say people need to get married stay together and have children for moral and economic reasons. Of course all of this intersects with racial and gender inequality too. There are millions of single black women never married and without children who want husbands and families. And we know that poverty is a serious problem among single parent moms regardless of race. But this shouldn't be a zero sum game that divides working people trying to make ends meet. The problems faced by single people are tied to an economy that is grossly unequal in terms of wealth and income. Employment is less stable, not adequately paid, lacking decent benefits, and uncertain because of new technologies. All working people matter. The plight of singles needs the same attention and care as working families. 

Sources

The escalating costs of being single in America

https://www.vox.com/the-goods/22788620/ 

https://www.ssa.gov/policy/docs/population-profiles/ 

https://www.cbpp.org/research/poverty-and-inequality/gaps-in-economic-support-for-non-elderly-adults-without-children