The gap between Black and white homeownership is higher today than when segregation was legal, according to a report from the National Association of Real Estate Brokers.
The homeownership rate in the first quarter of 2021 was 73.8% for white households and 45.1% for Black households, according to the group’s State of Housing in Black America report — an almost 29-point difference percentage gap.
In 1960, the rate was 65% of white households and 38% of Black households — a 27-point difference, according to the NAREB.
Housing discrimination became illegal in 1968 under the Fair Housing Act, but the report says institutional racism at every level in real estate and federal housing agencies has continued.
That includes Texas, where the state legislature hasn’t done enough to formally codify discrimination protections, according to Zoe Middleton, co-director at the housing policy nonprofit Texas Housers.
“There was a shift from de jure or legally codified segregation and discrimination to de facto segregation,” Middleton said on Houston Matters Tuesday. “It wasn’t overt, but it was practiced culturally, and institutionally reinforced.”
Black homeowners also pay more for their homes, according to SHIBA report. Black home buyers disproportionately rely on high-cost loans to own a home. In her conversation on Houston Matters, Middleton said Black borrowers are also offered riskier loans by subprime lenders.
The gap in Black home ownership is part of a larger wealth gap across the country. A 2019 survey from the U.S. Federal Reserve found that white families had eight times the wealth of Black families and five times the wealth of Hispanic families.
“We want to have people with access to wealth,” Middleton said. “In America, the biggest way to access and develop your wealth is to own a home.”
Gentrification, which has increased rapidly across the nation, is also a contributing factor, according to Judson W. Robinson III, the president and CEO of the Houston Area Urban League.
Homeowners in historically Black and brown neighborhoods in Houston are being pushed out, Robinson said. It’s too expensive for people to stay in the homes they own, so they end up becoming renters or moving outside “The Loop.”
Take Houston’s historic Fifth Ward: Housing developers were given lots of money to build affordable homes, Robinson said. Then the neighborhood started to grow, which raised housing prices.
“Momentum has also been our enemy,” Robinson said. “Now those lots that are affordable are a lot less available, so you’re seeing closer to market rate being the new norm, which means you’re not really talking about affordable, for the most part, anymore.”
It’s also happening in the Third Ward, where Robinson said new development is taking place in parts of the neighborhood that haven’t seen new homes built in the past 50 years, because the land is affordable and close to downtown.
Addressing wealth and housing disparities will require radical change in all areas, Robinson said.
“It’s the system itself,” Robinson said. “It’s the system of medicine. It’s the system of housing. It’s the system of education. All those things that are essential to our lives.”