What can global mobility do about racial homeownership gaps?

To gain a quality in depth understanding of homeownership gaps, try this featured story from the U.S. Department Of the Treasury entitled, "Racial Differences in Economic Security: Housing". The post discusses existing racial disparities in the rates of homeownership, their persistence over time, across the lifecycle, and their determinants. It goes on to highlight differences in home values, housing returns, and distressed home sales across racial groups and concludes by showing how all of these factors have combined to produce large disparities in housing equity wealth. The reality is that although we are decades after the 1968 Fair Housing Act, many Black families still struggle to become homeowners at the same rate as their White peers. 

Not too long ago, we published this post on our Trending Topics page: "Can global mobility do anything about the homeownership gap?" That looked at some statistics and provided some background for consideration on the acts of redlining and deed-restricted covenants that made it difficult, if not impossible, for many families to own homes. Have a look at this graphic which reveals the gap's history since 1994:

As people age, homeownership rates increase, but the gap between races remains, noted by a second chart below:

• Home buyers are older, whiter and wealthier than at any time in recent memory, while discrimination is holding Black buyers back in all steps of the process.

The data shows that becoming a homeowner and remaining a homeowner is more difficult for Black families than for any other race. So we go back to a post from Sept 2021 to look at what global mobility programs can do to support reducing the gap.

In looking at your relocation policy and program, have you considered whether what you have in place is equally accessible? Looking at how actual relocation benefits are applied and 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 current homeownership rates from the U.S. Department Of The Treasury (75% for White households versus 45% for Black households), in actuality what that would mean is that three out of four non-Hispanic White people coming through a relocation program would receive the home purchase benefit, whereas fewer than two out of four Black people coming through the program would receive support in purchasing a new home. This maintains a homeownership gap of 30%. 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 mobility program has been intentionally supporting homeownership disparities, when I read today's current facts, it forces me to again start asking questions like: would offering all relocating employees home purchase assistance help some Black employees to cross over 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 a corporate responsibility perspective and an employee attraction and retention perspective? If a program uses policy tiers, 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. There are likely other factors that have contributed to this all-time high homeownership gap, factors that global mobility may not have the ability to change. What we should do though is look inside our realm of control to consider what might be done.