Nonprofits Seek to Improve Homeownership Disparities in Wisconsin | New
MADISON, Wisconsin – For Greg Lewis, the house was beautiful. Comfortable and inviting, the two-bedroom house in Milwaukee had a finished basement, a two-and-a-half-car garage, an attached apartment, and a yard.
He had his eyes on it for 42 days, only to learn that the appraisal, or the valuation of the property, was lower than he expected. Lewis thought it was going to be around $ 100,000 because another house on the same block sold for $ 130,000. Still, the valuation was only $ 90,000, meaning the banks would be limited in how much they could lend him to buy the house.
He attributes the difference to racism. And he is not alone. Experts and some homeowners say historical racism continues to play a role in the decline in the value of black-owned homes, especially in predominantly black neighborhoods.
“Some houses can be nice houses and the appraisal is short, then you have to deal with that because they find out it’s a black person who owns it and sells it,” said Lewis, who had to take the speech. buy the house.
Owning a home allows families to preserve and increase their wealth, increases their borrowing capacity and reduces the cost of housing. Lower valuations are among the many barriers to wealth creation facing black Americans, Wisconsin Public Radio reported.
Wisconsin has one of the lowest black homeownership rates in the country; only 26 percent of black residents own their homes, compared to 72 percent of whites.
Experts say historic discriminatory practices such as redlining – areas where banks refused to lend money – and racial pacts, which prohibited sales to black buyers, have combined with modern racism and overall lower incomes to disadvantage black Americans, hampering their ability to buy a home.
Lewis has now blocked his search for accommodation, discouraged that he has been outbid multiple times.
“It took a lot of me,” he said. “I went into a depressed state. Looking for a house is really excruciating, and at the end of the day you want to find something that works for you, something that you love, so that’s the hard part.
The National Association of Realtors found in a 2019 study that home ownership remains elusive for many black buyers, with 43% of black households able to purchase the home at the regular price compared to 63% of white households.
The Center for Responsible Lending also found that it would take 14 years for a black household at the national median income level to save for a 5% mortgage down payment and the closing costs of a median-priced home – and 11 years to a Latino family – while a middle-income white family needs nine years to accumulate the same amount of funds.
Mother of four Sheila DeCuevas struggled to find housing for 11 years, unable to save enough money for a deposit or meet the financial demands of a loan.
“There were always issues with the qualifications for any type of loan or traditional loan or any type of program, so we had a hard time trying to find someone to help us,” she said. .
DeCuevas rented for years without feeling safe after living homeless with his then 2-year-old son. “A lot of people don’t get it because they have a stable life, but buying your own home brings peace of mind to a lot of people,” she said.
DeCuevas eventually worked with Acts Housing of Milwaukee, which helps low-income families buy and repair their own homes. DeCuevas said Acts Housing improved his financial literacy, allowing him to buy his own home.
“My oldest already talks about ‘When I buy my own house’ so they don’t think about renting,” said DeCuevas, who now works for Acts Housing as an office coordinator. “They don’t think about making other people richer, they want to stabilize themselves and get richer.”
Homeownership is a key indicator of living standards in several ways. Houses are often a family’s most important asset, providing a source of wealth for current and future generations. Homeownership also provides housing stability, which can help children do better in school and provide other benefits. This is an advantage that too many blacks miss out on.
Kurt Paulsen, a University of Wisconsin-Madison housing affordability expert, said little progress had been made in increasing black homeownership, which stands at 44% across national against 74% for whites.
“Nationally, the homeownership rate for blacks is still not where it should be and, in some ways, has not improved significantly since the Fair Housing Act of 1968,” he said. Paulsen said.
Although housing discrimination based on race is illegal under the Fair Housing Act, Paulsen said mortgage lenders sometimes refused loans to black households – or charged higher interest rates – because of lower income and a higher debt-to-income ratio.
Kacie Lucchini Butcher is Public History Project Director at UW-Madison which studies housing inequalities. Butcher pointed to the alarming implications of low homeownership rates among blacks, including the ability of these families to build intergenerational wealth.
Nationally, the average white household has a net worth of $ 171,000, which is 10 times more than the average black household’s net worth of $ 17,150. And in Milwaukee, black Americans are financially worse off today than they were 40 to 50 years ago, noted Marc Levine, professor emeritus of history, economic development and urban studies at UW-Milwaukee.
Says Butcher: “If homeownership continues as it does, and access to housing continues as it does, we are just going to see a continuing exacerbation of wealth inequality and poverty. One of the best ways to solve this problem is to house everyone. “
Building intergenerational wealth isn’t the only challenge black Americans face.
UW-Madison professor Kris Olds, an expert in town planning and gentrification, said housing affordability remains a huge problem in Wisconsin, especially Madison.
“One of the problems in Madison is that a lot of (housing) is allocated to single-family zoning districts, and it’s quite expensive to access them,” he said.
Paige Glotzer, assistant professor of history at UW-Madison and author of a book on the history of housing discrimination, said stigma still permeates the housing market in sometimes inconspicuous ways.
Glotzer said that a house owned by Blacks or located in a black neighborhood will be less valuable than the exact same house in a predominantly white neighborhood, and “it is sometimes difficult to detect because you can always give a reason. color blind for which you take away from the value of a house.
Levine noted that a black household in Milwaukee with an income over $ 100,000 is twice as likely to live in a neighborhood of concentrated poverty as a white household with an income below $ 10,000 per year – which means that even a high income does not isolate black Wisconsinites from housing discrimination.
Generations after the passage of the Fair Housing Act of 1968, white and black homeownership rates and terms remain miles apart. This is especially true in Milwaukee, one of the most isolated large cities in the country.
“African Americans are more likely to buy cheap homes in segregated neighborhoods because of historical segregation patterns,” Paulson said.
One of the main reasons for housing segregation is redlining, which began with the Home Owners’ Loan Corporation of 1932 – when the Great Depression plunged America into a housing crisis.
The federal government has issued bonds to refinance the majority of Americans’ mortgages. The government developed standards for the mortgages and neighborhoods it would refinance by color coding geographic areas by risk factor. Green indicates the lowest risk. All-Blacks and neighborhoods with “inharmonious racial groups” were given the highest risk color – red.
Redlining was “a close collaboration” between white federal policymakers, planners and developers, Glotzer said.
“Redlining was actually a form of lending discrimination,” she said. “There are huge barriers in terms of accessing credit, capital, money and a good bank which is still a big determinant of how people can live. And it is, and continues to be, something very racist based. “
Several public agencies and nonprofits are working to help black residents of Wisconsin become homeowners.
Realtor Mo Simmons, who helps Lewis buy a home, belongs to Take Root Milwaukee, a consortium of 50 community organizations, neighborhood groups, HUD-certified housing counseling agencies, realtors and lenders who help residents buy. , maintain or repair a house.
“There has been a lot of prejudice that has kept black people from owning property,” she said. “But there is now, in 2021, a lot more education and a lot more resources… and Take Root is providing that,” she said.
A recent analysis from the Wisconsin Policy Forum found that between 2014 and 2018, the City of Milwaukee spent $ 26.4 million to help existing homeowners repair their properties, but comparatively less ($ 3.5 million) to increase home ownership. The city also spent $ 19 million to increase the number of affordable housing. The think tank suggested Milwaukee could better focus its efforts – spread across 20 housing programs without a single director – to increase the level of homeownership and affordable housing in the city.
One of the resources is the Wisconsin Housing and Economic Development Association, established in 1972 by the Wisconsin legislature, which holds more than $ 2 billion in assets and serves as a lender to state residents in need of financing. for affordable housing. The organization made 2,680 loans – for a total of $ 366 million – to first-time home buyers and working families in fiscal 2020.
Joaquin Altoro, CEO of WHEDA, has increasingly said that financial institutions are identifying potential homeowners of color and helping them buy homes. “I’m not trying to change racism, I can’t do it on my own,” he said. “But I can change the fact that we put one, two, three owners in a neighborhood.”
Lewis has said he looks forward to the day when he can finally buy a home – and eventually pass that asset on to his family.
“I think everyone should own a house,” he said. “It’s a start to creating generational wealth for blacks. “