For too many Americans trying to achieve their goal of owning a home, hard work alone is not enough. America should be a nation where all individuals have the same opportunity and chance to get ahead. But too many communities know that isn’t the case. Decades of discriminatory housing industry and government policies have set back Black, Latino, Native, Asian American, Pacific Islander and poor White communities on the journey toward wealth creation, economic opportunity and homeownership.
We’re at a crossroads. We can continue with the status quo or we can take steps to ensure all families in our country — including families of color — have access to opportunity. Congress must make significant investments in housing programs, including the first-generation targeted down payment assistance program in the Build Back Better Act.
Throughout 2020, President Joe BidenJoe BidenChina eyes military base on Africa's Atlantic coast: report Biden orders flags be flown at half-staff through Dec. 9 to honor Dole Biden heading to Kansas City to promote infrastructure package MORE and congressional Democrats promised a historic pursuit of racial and economic justice. But there can be no racial equity without housing justice.
Homeownership is the primary way American families build wealth. In fact, 84 percent of adults across the political spectrum agree “housing is foundational to other positive life outcomes, such as staying healthy, holding onto a job, and doing well in school.” In the same survey, 79 percent of adults believed “owning a home is an essential part of the American dream.”
Yet, for millions, that dream is out of reach. Families who had early access to homeownership through FHA-insured mortgage loans have built up home equity that could be passed to successive generations. Yet, due to discrimination, originally only 2 percent of those loans went to families of color.
This inequity is a primary reason why there is a persistent 30 percentage-point Black and White homeownership gap, which is as wide today as it was when segregation was legal. It is clear why the homeownership disparity persists. The average down payment for a home purchased in 2021 is $27,850. For socially and economically disadvantaged families — many of whom are people of color and/or working-class — saving funds for a down payment is next to impossible.
Through no fault of their own, millions of Americans are systematically disadvantaged due to decades of unfair and exclusionary housing policies.
Every $30 billion invested in down payment assistance for first-generation homebuyers will increase the homeownership rate for Blacks and Latinos by 1 percent, respectively. And that investment generates an additional $141 billion for local economies across the nation. By helping traditionally underserved individuals, Congress can ignite economic opportunity in our nation that benefits everyone. We know a one-time investment in this program isn’t enough to fix the structural inequality facing families of color, but it’s an important start.
Discussions about the top line number of the Build Back Better Act dominate headlines, and it can be hard to see what these numbers and statistics mean for ordinary families — and for our nation as a whole. Funding the first-generation down payment assistance program means stability, equity and hope for communities who shouldn’t have to fix the legacy of discrimination by themselves. It’s time to create racial justice through economic opportunity for each and every family who needs that extra help to achieve their dream.
Lisa Rice is president and CEO of the National Fair Housing Alliance (NFHA).
David M. Dworkin is president and CEO of the National Housing Conference (NHC).
NHC and NFHA are both steering committee members of the Black Homeownership Collaborative, which strives to create 3 million new homeowners by 2030.