Expanding Equitable Opportunities in Housing
The legacy of racist housing policies, coupled with a shortage of affordable housing, has hindered the ability of minority and low-income families to build wealth, afford quality housing, and offer opportunities to their children. In October 2022, Enterprise Community Partners hosted its 40th Anniversary Conference in Washington, DC. Affordable housing advocates, housing investors, and policymakers discussed strategies to increase the upward mobility of low-income households, address racial inequities in housing, and invest in affordable housing. In a panel titled “Advancing Equity and Inclusion: Reconstructing Housing Policies and Practices,” participants explained how disinvestment in minority communities, along with past discrimination, has led to intergenerational inequities in housing, the accumulation of wealth, and educational attainment. Moderated by Jacqueline Waggoner of Enterprise Community Partners, the panelists included Marjy Stagmeier, managing partner of TriStar; George Jones, chief executive officer of Bread for the City; Makada Henry Nickie, executive director of JPMorgan Chase; Robin Rue Simmons, executive director of FirstRepair; and Susan E. Thomas, senior vice president of Fifth Third Bank’s Community Development Company. Panelists discussed strategies to build wealth among African-Americans and low-income families through reparations, service delivery, and social impact investment.
Fostering Inclusion Through Housing
Several communities are taking practical steps to advance upward mobility and address social inequities. While serving as the executive director of the nonprofit FirstRepair and a councilmember for the city of Evanston, Illinois, Simmons was instrumental in the 2019 passage of the nation’s first tax-funded reparations initiative in Evanston. In January 2022, the city began issuing $25,000 disbursements to African-American residents who were directly impacted by its discriminatory housing polices and zoning ordinances. Community listening sessions were vital to determining the type of reparations that would help remedy past injustices, and feedback from the African-American community identified housing as a priority. Residents must apply the reparations to a downpayment on a home, mortgage payments, or home repairs. The reparations initiative will help support wealth creation among African-Americans through home equity. Through its work in Evanston, FirstRepair has helped build support for reparations policies in more than 100 municipalities nationwide.
Washington, D.C. nonprofit Bread for the City has begun discussing the impact of racism on its clients, who are predominantly African-American. Bread for the City is part of the Anti-Racist D.C. coalition, through which local leaders are engaged in a multisector dialogue to devise strategies that repair the harm caused by racist policies toward minority communities. Bread for the City’s primary mission is to provide food, clothing, health care, financial assistance, and other social services for families in need. According to Jones, families accessing the organization’s services have an average annual income of $10,000, and few clients own their homes. Jones suggested that reparations likely will be at the center of the nonprofit’s antiracist agenda, and such payments could be used to finance a downpayment on a house, a small business, or higher education, helping to close the wealth gap. The COVID-19 pandemic exacerbated housing vulnerabilities for low-income households and minority communities, and it widened the wealth gap between minority households and White households.
Furthermore, housing costs and interest rate hikes make attaining homeownership difficult for low-income households. Thomas discussed how Fifth Third Bank and Enterprise Community Partners have partnered to reverse these trends through the Empowering Black Futures Neighborhood Program. Active in nine underserved neighborhoods in seven states, Empowering Black Futures fosters economic mobility for African-American residents by channeling $20 million in investments for small businesses, mortgages, and neighborhood revitalization. These investments will support communities such as the Avondale neighborhood in Cincinnati, Ohio, which is working to revitalize its central business district, spur small business development, and preserve and construct affordable rental units and homes for sale.
Social Impact Investments
TriStar, an Atlanta-based real estate investment company, operates a community impact fund to finance affordable housing development and social services for residents. Stagmeier explained that many of TriStar’s tenants work in the service industry and are unable to afford monthly rents between $600 and $700. At the height of the pandemic, TriStar launched an eviction relief fund that raised approximately $12 million, and, through partnerships with 330 Atlanta landlords, the company helped more than 4,000 families stave off eviction and remain in their homes. TriStar purchases properties in neighborhoods with low-performing schools to help reduce school transiency and improve neighborhood stability. “When you have an affordable housing crisis, you also have an education crisis,” Stagmeier stated. By keeping rents affordable, TriStar ensures that families can remain in place. Through partnerships with local school districts and federally qualified health clinics, TriStar’s communities provide summer camps, afterschool programs, and medical care for residents. Residents also can participate in tenant association meetings, which foster networking among neighbors that can lead to employment and educational opportunities. Such community efforts can build trust among neighbors, service providers, and landlords.
Upward mobility is closely linked to access to credit and banking services. Nickie noted that institutions need to reconfigure channels of credit to create more avenues for economic mobility. In October 2020, JPMorgan Chase launched its $30 billion Racial Equity Commitment, a 5-year investment that supports affordable housing, homeownership, access to banking and capital, and small business growth. This commitment includes a Racial Equity Initiative, which allocated $221 million in New Markets Tax Credit program equity from 2020 to 2021 to support the development of affordable rental projects. In 2021, the company issued approximately 12,000 home loans totaling more than $4 billion to minority households. That same year, JPMorgan Chase opened 10 community center branches in low- to moderate-income and minority neighborhoods and hired more than 100 managers to build relationships with local leaders, nonprofit organizations, and small businesses.
The panelists explained that racial equity is both a process and an outcome. Measuring progress toward achieving racial equity will require close attention to trends in homeownership rates, household income, and educational attainment. Jones explained that a commitment to antiracism among community leaders, housing advocates, and government officials is necessary to understand and address the impacts past injustices have had on minorities. Stagmeier indicated that developing trust between social impact investment companies and marginalized communities will be critical for delivering effective services that meet residents’ needs and fostering strong partnerships. Access to alternative credit underwriting systems for those who may be unable to obtain credit through traditional means can help families climb the economic ladder. Such efforts will be useful to expand opportunities for homeownership, entrepreneurship, and neighborhood revitalization, thereby supporting the future prosperity of communities of color.