Closing the Racial Homeownership Gap

At the MACDC Convention in October 2018, we gave Governor Charlie Baker (and his opponent at the time, Jay Gonzalez) a copy of a new book by Richard Rothstein called “The Color of Law.”  This book documents the centuries of discriminatory housing and land use laws that systemically segregated our communities and denied African Americans and other people of color the opportunity to buy homes, accumulate equity, and to pass that wealth onto their children. We wanted our Governor (regardless of who won the election last November) to understand that history so he could understand why white people in Massachusetts are more than twice as likely to own their own home as a person of color.  This represents the 3rd worse homeownership gap in the country.

Policy makers – as well as advocates and community leaders – need to understand that history so we can change it.  Indeed, the community development movement was created, in part, to redress some of these discriminatory policies and practices – urban renewal, redlining, and housing discrimination. For 50 years, we have fought to expand access to safe and fair mortgages, to educate first-time homebuyers and to build homes that moderate income people can afford to buy.

Last year, MACDC adopted a strategic plan that made closing the racial homeownership gap a top priority. Our first step in advancing that effort was at the October 2018 Convention where we pushed the candidates for Governor on how they would close the racial homeownership gap and presented them with the Color of Law.  A few weeks after the Convention, the Baker Administration asked us to prepare a white paper outlining potential strategies for addressing this challenge. The Administration then established the Racial Equity Advisory Council for Homeownership and appointed MACDC and other housing experts to serve on the Council early in 2019.

Over the next nine months, MACDC – in partnership with many allies, has made significant progress:

  • The Legislature has increased funding available for homeownership education and foreclosure counseling from $2.05 Million to $2.85 Million in the FY 2020 budget;
  • Governor Baker has announced a $60 million new homeownership development program with the specific goal of reducing the racial homeownership gap through the development of 500 new affordable homes;
  • The Governor and the Legislature appear poised to appropriate $10 million in new money to provide down-payment assistance grants to first time homebuyers;
  • MACDC partnered with four member CDCs, Winn Companies and Compass Working Capital to secure from HUD the first in the nation CDC Collaborative to implement the Family Self Sufficiency program for CDC residents;
  • The REACH Council has adopted and is now working to implement four new initiatives designed to help people of color and others obtain homeownership, including:
    • Targeted Marketing of My Mass Mortgage and State Mortgage Products
    • Rental to Homeownership Pilot
    • Downpayment Initiative and Interest Rate Buydown
    • Relief for Borrowers with Student Loan Debt

The racial homeownership gap is the result of decades and centuries of discrimination. It won’t be easy to reverse. But we are excited by the renewed attention to this issue and the growing momentum to adopt policies, programs and funding to begin moving the needle in the right direction.