When you look around our communities, you see sprawling buildings, businesses, and homes built on land that Native Americans viewed as “more valuable than money put here for us but didn’t belong to us.” Once taken, land became a commodity to be owned, built on and sold. Brick by brick, communities were built on the backs of slaves who laid the foundation for what we see today, hoping to one day be free and have a place of their own. Land for those enslaved symbolized invaluable opportunity and freedom for growth.
In an article originally published in The Roots by Henry Louis Gates, Jr., he asks, “try to imagine how profoundly different the history of race relations in the United States would have been had this policy (40 Acres and a mule) been implemented and enforced; had the former slaves actually had access to the ownership of land, of property; if they had had a chance to be self-sufficient economically, to build, accrue and pass on wealth. After all, one of the principal promises of America was the possibility of average people being able to own land, and all that such ownership entailed.
Yet, their ancestors are still waiting for their 40 acres and a mule. Unfortunately, historically and even today, the chance to own property for many people of color is still unattainable and remains an American Dream. This reality has created a great divide between those who have and those who don’t. For those who do own property, it is a source of wealth.
April was National Fair Housing Month, recognizing the 54th anniversary of the Fair Housing Act, a landmark civil rights law intended to provide fair housing, prevent redlining throughout the country and make discrimination in housing transactions unlawful. The Fair Housing Act prohibits discrimination in housing because of race, color, national origin, religion, sex (including gender identity and sexual orientation), disability, and familial status.
Still, today we are witnessing inequities and racial disparities. While the Fair Housing Act of 1968 helped eliminate the dangerous practice of “redlining” that Federally restricted Blacks to socio-economically disadvantaged neighborhoods, it, unfortunately, didn’t do enough to mitigate equity issues in the homebuying process. Just this year, we saw numerous lawsuits filed against a major national bank alleging discriminatory mortgage policies and lending practices against Black customers. Systemic discriminatory policies and lending practices have been commonplace over the years. In addition, Blacks and other communities of color continue to be targeted by predatory lenders who sell financially unfeasible loans that cost buyers significantly more than traditional mortgages and may even result in foreclosure over time.
In addition, since the pandemic, housing prices have soared to the point where they are pricing out the middle class. I often heard throughout the pandemic that the rich have gotten richer and the poor have gotten poorer. This is certainly true when it comes to the real estate market. Potential buyers waiting for prices to fall are now even further away from achieving their homeownership dreams.
These ongoing scenarios illustrate more work is required and that education is key! As a real estate professional in Colorado, I’m proud to be a voice for change and helping to serve buyers of color. In doing so, Denmon Reality intimately understands the institutional and financial challenges they face. Community education is needed to help buyers understand their rights, options, and the various implications in the homebuying process. As a result, we work with our partners on the lending side to host monthly real estate classes. While these classes are geared toward first-time homebuyers, they are open to anyone who wants to learn about the market. We cover everything from the application process to the inspection and appraisal processes and the inherent bias that can happen at every step. It’s not just about distinguishing between conventional and FHA loans. It’s about comprehensive education that goes beyond the basics. It’s about understanding the difference between a 3% and a 4% interest rate, how your credit score can affect where you land on the spectrum and how much it will cost you over the life of the loan. It’s about knowing your escrow account and how increases in property taxes can change your monthly payment. But also, by informing buyers of key indicators and predictors, we can help them prepare to enter the market at the right time and with optimal financial assistance.
But because homeownership is a building block for wealth and creates a family legacy that generations can pass down, financial literacy needs to be more accessible to children to help them better understand how homeownership impacts their ability to build generational wealth. Denmon Realty recognizes the importance of instilling this knowledge early in life and often sponsors programs that expose youth to financial literacy programs and real estate in general.
In addition, philanthropy can serve as an invaluable equalizer for homebuyers, particularly those of color. Through various philanthropic initiatives, Blacks can access educational opportunities and financial assistance in down payments and even loan forgiveness programs. In some cases, philanthropy can make the difference in whether a buyer can move forward with the desired transaction.
“Today, homeownership is the principal source of wealth creation for most American households,” said Marcia L. Fudge, Secretary of the Department of Housing and Urban Development, in a statement. “Unfortunately, NAR’s report confirms that Black Americans are being locked out of homeownership opportunities at an even higher rate than a decade ago.”
Secretary Fudge added: “It is critical that we bridge the racial homeownership gap with intentional solutions that recognize both the persistent history of discrimination and inequity and the current crisis of housing affordability.”
In order to address longstanding equities, some financial institutions have started to initiate programs designed to promote and support black homeownership (e.g., FirstBank). The same needs to be done at the governmental level and among community-led philanthropic institutions. The Black Resilience in Colorado (BRIC) Fund is proud to partner with and support nonprofit organizations to advocate for policy changes, affordable housing and increased opportunities to open the door to homeownership for people of color. It will take strong partnership and collaboration and a shared commitment to right the wrongs of history to help diverse communities thrive. Until then, Black real estate professionals and community entities such as BRIC will have to continue educating and empowering each other to lay bricks and build toward homeownership.
By April Denmon