The American dream while Black: Locked in a vicious cycle

Homeownership is supposed to be the gateway to the American dream. Black Americans have been denied access.

The American dream while Black: Locked in a vicious cycle

By Nigel Chiwaya and Janell Ross (Aug. 3, 2020)

Ebony Jones thought she was one of the lucky ones. Jones, a Black woman in her 30s, inherited a home her grandfather, a World War II veteran, had bought nearly seven decades earlier with the help of his GI Bill benefits. 

But when Jones and her two children moved into the house in Compton, California, which was paid off almost 40 years ago, they soon discovered that sewage sometimes backed up in the living room and that the plumbing needed to be repaired. The distressing process of securing a home equity loan introduced Jones to an American reality.

Despite Jones’ good credit score, low debt-to-income ratio, better-than-average income and several thousand dollars of savings, lenders who immediately expressed interest stopped or went quiet when they got to two questions.

What was her ZIP code? Answer: 90220. That’s Compton, 29 percent Black, 68 percent Latino. 

Was she married? Answer: No.

Federal law prohibits lenders from using the answers to those questions to determine a borrower’s ability to repay a loan.

“When I initially apply for a loan online, without fail, I get no problem,” said Jones, 37. “They bombard me with emails and letters. Then they see the property address or ask me if I’m married, and everything changes.” 

The United States is in the midst of a racial reckoning as protests that began in the wake of George Floyd’s death in Minneapolis police custody, as well as high Black unemployment due to the coronavirus pandemic, have prompted some Americans to contemplate the ways institutionalized racism and discrimination have constrained Black lives for centuries. 

Advocates, scholars and officials say one of the clearest examples of that ongoing discrimination exists in the housing market, where the gap in homeownership rates between Black and white Americans is wider than it was before the Civil Rights movement. 

Seventy-six percent of white households owned their homes at the end of the second quarter of 2020, compared to just 47 percent of Black households, according to the Census Bureau. That 29-percentage-point gap, perpetuated by decades of housing and economic policies favorable toward white buyers and designed to exclude Black buyers, has only been exacerbated by the pandemic and before it the 2008 financial crisis. Homeownership is the prime driver of America’s ongoing wealth gap.

Gap begets gap

The homeownership gap between Blacks and whites is greater now than it was when the Fair Housing Act was signed into law in 1968 …

White: 73.40%

Black: 47.40%

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