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For decades, there's been a persistent gap between homeownership for Black and Hispanic families in America and white families. Now the gap is even wider than it was before the Fair Housing Act was passed in 1968. The racial disparity in homeownership has led to other disparities, like the ability of families to accumulate wealth or to get a good education. NPR's Pam Fessler reports on efforts to fix that.
PAM FESSLER, BYLINE: Tasharn Richardson has lived all of her 42 years in either public or subsidized housing in Washington, D.C. But today, surrounded by 7 of her 10 children, she's about to enter a new domain, homeownership.
TASHARN RICHARDSON: Make sure I didn't lose the keys. That would be a bummer.
FESSLER: But she finds the keys, and as she unlocks the door...
RICHARDSON: Oh, uh-oh, uh-oh, is everybody ready?
UNIDENTIFIED CHILD #1: Yes.
UNIDENTIFIED CHILD #2: (Laughter) Yes.
FESSLER: Her kids practically explode as they rush inside their new four-bedroom house.
FESSLER: For this family, owning a home has always seemed like someone else's dream. Until now, Tasharn and her husband, Lionel, were among the majority of Black Americans who rent rather than own. For white families, it's the opposite. Most own their homes, which in turn has helped them to build wealth and stability.
UNIDENTIFIED CHILD #3: This is my room.
FESSLER: But Tasharn only got here through sheer determination, luck and a great deal of help. Her salary working for the D.C. government wasn't enough to qualify for a mortgage. Her husband is unemployed. So she had to secure more than $100,000 in down payment assistance from the government and a nonprofit. She also spent countless hours taking classes and working with a financial coach to learn some of the basic skills needed to buy a house.
RICHARDSON: Being able to have your finances in order - also learned about the credit. You know, most people - we don't know about that, or we have never learned about that. And so that's something that doesn't happen overnight.
ROBIN LEWIS: All right, well, welcome, everybody. It's great seeing your names. If you...
FESSLER: Robin Lewis works for a D.C. nonprofit called MANNA, which helps low-income families buy their first homes. This is an orientation session, online because of the pandemic. Lewis tells the enrollees they have a lot to do before they can become what MANNA calls mortgage ready.
LEWIS: Budgeting - I can't stress it enough. You need to budget. If you don't budget, if you don't know what you got, you're going to have a hard time getting anywhere.
FESSLER: It's one of those things, like having a good credit score, that many of these potential buyers have never thought about before. There's likely the first in their families to buy a house, so their parents couldn't necessarily show them the way. MANNA tries to fill that void. President and CEO Sasha-Gaye Angus says the ultimate goal is to reduce intergenerational poverty.
SASHA-GAYE ANGUS: We're so far behind in the wealth gap that, you know, we've got to start somewhere. And so creating wealth through homeownership is really the lowest-hanging fruit for Black and brown families to really get a leg up.
FESSLER: And the numbers are pretty startling. The average Black family has one-eighth the wealth of the average white family, $23,000 compared to more than 180,000. That's largely due to a lack of home equity. About 42% of Black families own their own homes, compared to more than 72% of white families. Michael Neal, a senior researcher at the Urban Institute, says these disparities, the result of years of housing discrimination, are self-perpetuating. Homeowners simply have more resources to get ahead.
MICHAEL NEAL: That is, the degree to which I can use my housing equity to invest in my human capital, that is, to get an education, to use my housing equity to start a small business, to do all those things that ultimately bring additional wealth.
FESSLER: And the pandemic has made matters worse, with Black Americans more likely to get sick, to lose work and to fall behind on their rent. That's made it even harder for families to save for a house at a time when prices are soaring.
RICHARDSON: Your bedroom's here, and right next to the bathroom is two bedrooms.
FESSLER: In fact, Tasharn, like many buyers, was in a race against time. This newly renovated house cost $475,000. Last year, it sold for half that amount. Neal of the Urban Institute says without help, the outlook for low-income homebuyers is pretty bleak.
NEAL: Our analysis suggests that, unfortunately, these gaps are not going to close.
FESSLER: The Biden administration says it wants to narrow the divide. It's requested hundreds of billions of dollars to increase the supply of affordable housing and to provide down payment assistance. HUD Secretary Marcia Fudge tells Senate appropriators she also wants to revamp the way government-backed mortgages are structured to lower barriers, such as student loan debt, that are especially burdensome for Black and Hispanic buyers.
MARCIA FUDGE: We just want to be sure that we can make those people who can pay their rent now, most of whom can afford to pay a mortgage - but just assist them to get over the hump.
FESSLER: But it's not clear how far Congress will go to help people over that hump. Republicans are opposed to massive new spending, and some have raised concerns about pushing people into the market who aren't financially ready. Michael Neal of the Urban Institute also cautions that doing too much to boost sales without increasing supply could inadvertently make home prices higher.
That said, there's a strong push to do something. Lisa Wise, founder of the birdSEED Foundation in Washington, notes a simple fact. White homebuyers are much more likely to get financial help from their families. In her case, she used $8,300 from the sale of a car she inherited for the down payment on her first house.
LISA WISE: And that $8,300 windfall changed my entire life, I mean, absolutely changed everything about my life trajectory. And so many people will never have that opportunity or will never have that windfall.
FESSLER: Which is why her group gave Tasharn a $10,000 grant to help with her down payment and closing costs. Tasharn hopes that eventually turns into a windfall for her children, if only for the lessons they've learned. She says her kids, especially her teenage daughter, have been her strictest financial advisers.
RICHARDSON: And when we would go out - shopping, grocery store, no matter what it is - she would tell me, hey, Mom, hold up. Do we need this? Do we need that? Aren't we planning on buying a house one day? Didn't you say we're going to be moving? And we're not just renting; we're buying?
FESSLER: She says that at least is something she can pass on. Pam Fessler, NPR News.
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