Owning a home is an undeniable part of the American dream. However, the gap between Black and white homeownership is now wider than it was more than 50 years ago, right before the 1968 Fair Housing Act was enacted to create equal housing opportunities for minorities, according to a report by the Urban Institute. Over the last 15 years, Black homeownership has declined more dramatically than for any other racial or ethnic group in the United States.
Why such a gap? Well, there are numerous reasons. While discrimination is not technically legal, the report goes on to share that there is a:
- 31% gap in income differences
- 27% gap in marital status
- 22% gap in credit scores
Go back further and consider the acts of redlining and deed-restricted covenants that made it difficult, if not impossible, for Black families to own homes. The reality today is that as of the first quarter of 2021, the homeownership rate among non-Hispanic white households was 73.8% as compared to 45.1% for Black households, according to the U.S. Census Bureau. That's almost a 30% gap. Traditionally, homeownership has been such a critical step to building intergenerational wealth and understanding that fact helps to illuminate why there is such a gap in income differences.
Becoming a homeowner and remaining a homeowner is more difficult if you are Black. A recent story out of Cincinnati shared that a Black family's home appraisal grew by $92,000 after they "white washed" their home and removed all signs of their race. This kind of "appraisal discrimination" is not a one-off, and right now a federal task force is studying the problem and is scheduled to make recommendations by early 2022. This reality hinders the path toward building equity and further perpetuates income equality in the United States.
So, in looking at your relocation policy and program, have you considered whether what you have in place is continuing to support structural racism? Looking at the actual relocation benefits, how they are applied and how they are delivered is a good starting point. For years and years, most relocation programs have had policies for homeowners and policies for renters. Typically, homeowners get assistance with selling their home and buying a new home, while renters do not get assistance with buying a new home. The support for buying a new home typically includes paying the buyer-paid customary closing costs up to 2 or 3% of the purchase price. Often there are also excellent mortgage assistance programs that are available to help the relocating employee qualify and get excellent rates.
Now for the sake of argument, let's assume all homeowners get home purchase assistance. Most programs have considered it fair practice that the company would support the relocating employee in the new location with what they had in the old location. Based on those homeownership rates previously mentioned (73.8% for whites versus 45.1% for Blacks), in actuality what that would mean is that almost three out of four non-Hispanic white people coming through a relocation program would receive the home purchase benefit, whereas less than two out of four Black people coming through the program would receive support in purchasing a new home. Again, the gap being 28.7%. Does this then support the status quo on maintaining the gap of homeownership across the United States? It does if you assume that all homeowners sell and buy in the new destination and all renters remain renters in their new location.
While I am not insinuating that any program has been intentionally supporting structural racism, when I listened to the podcast linked to below, it did start making me ask myself some questions like: Would offering all relocating employees home purchase assistance help reduce the gap by allowing some Black employees to crossover from renters to homeowners? What would happen to overall program spend if all relocating employees (including those who start as renters in the departure location) were offered home purchase assistance benefits? Would this elevate your company from both a corporate responsibility perspective and an employee attraction and retention perspective? If you utilize tiers in your program, how does that impact who is able to obtain home purchase assistance?
The first step to designing solutions is usually creating awareness and better defining the problem. That often looks like asking a lot of questions and seeking a lot of input. I acknowledge there may be other factors that have contributed to this all-time high homeownership gap that global mobility may not have the ability to change, but let's look inside our realm of control to consider what might be done.
AILSA CHANG, HOST: This week, we're celebrating NPR's 50th anniversary, kicking off a series we're calling We Hold These Truths to examine what's working and what's not in American democracy. And one of the underpinnings of democracy, without question, is property ownership. You see; there was a time when owning property was required simply to participate in this democracy. Yet we began as a nation that considered Black people to be property, to be three-fifths of a person. AUDIE CORNISH, HOST: There's also an assumption in this country that owning a home is the best way to build intergenerational wealth. But the gap between white and Black homeownership is bigger today than it was in 1960, when race-based discrimination in the U.S. was still legal.