By Taylor Durham
Philadelphia has one of the highest rates of Black homeownership at 44.6%
The median net worth for an African American family is $9K
We’ve all seen how African American homeownership has steadily declined since 2001, mostly due to the rise of gentrification in historically Black neighborhoods across the country. From Brooklyn to Oakland, black homeowners are being victimized by predatory banking practices which are fueled by lack of federal oversight. As of 2017, all the gains made by the Fair Housing Act, outlawing housing discrimination, have been virtually erased. How will this impact the future of Black homeownership?
Why This Matters: Black homeowners were often targeted with subprime loans, and when the recession hit, Black homeownership plummeted drastically, leading to foreclosures across the country. This combination of factors has caused traditionally Black neighborhoods to see a rapid increase in white populations and homes being built that are 3x to 5x the median value.
Philadelphia has one of the highest rates of Black homeownership at 44.6%. However, between 2015 and 2016, more than 12,000 new mortgage loans went to prospective white homeowners versus the less than 2,000 that went to prospective Black homeowners. That’s almost 10 times more loans being granted to white homeowners.
In Brooklyn, the arrival of white residents may have made one neighborhood more diverse, but mean income from 2012-2017 jumped from $78K to $300K. In 2012, the number of white residents in that neighborhood was 5% but they received 40% of all mortgage loans.
Banks have argued that an applicant’s race or ethnicity doesn’t play a role in their decision process, but the racial makeup and median income of the neighborhood where the applicant wants to purchase property does. The practice can be traced back to the decades-old practice of redlining.
Situational Awareness: Homeownership is often touted as one of the fastest ways to build wealth, but Black populations across the country have been at a disadvantage for decades. Advocacy groups have sprung up in recent years to combat both banks and gentrification but it’s too early to know the impact.
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