It is common knowledge that home ownership is a significant factor and catalyst of wealth creation. Not only do homes serve as ‘safe’ long term investments, they also open doors (no pun intended) to home-owners to acquire loans which can later be used to pay off debts or children’s education– (however, this is generally advised as risky!). Unfortunately,black and ethnic minority communities in America are ripped off the opportunity to enjoy the aforementioned benefits. How this came to be is not unknown, and I would show you how the fangs of ‘state-sanctioned-systemic-racism’ have purged these communities off years of generational wealth, one the famed Ben Shaprio and ‘myth buster’, wholeheartedly agrees with.
As a result of the drastic effects of the American great depression, the government, in an effort to reinvigorate the economy insured private mortgages, rendering it significantly cheaper for fol …. *cough*…. Hwite… folks, to buy homes in the country. This was primarily the case as specific areas were struck off the governments ‘Santa list’ as they were regarded as high risk and unstable investments zones. These areas like Bedford-Stuyvesant, Brooklyn, were later bordered with ‘redlines’ on maps, to accentuate to potential investors and the government as ‘danger zones’. Sadly, a reason associated with this decision was the fact that the areas were mostly populated by black and ethnic minority groups. Although this ‘hyper-discriminatory’ practice is now banned by the Fair Housing Act (FHA) of 1968, the injurious effects of the policy still stings today.
Firstly, in most of the previously redlined areas, there is still an absence of beneficial institutions such as banks, supermarkets, quality schools and jobs, contributing to a reduction in demand for the properties, further damaging the worth and value of the homes in the long run. This is particularly problematic considering the fact that homes in these areas are mostly sold to African Americans who have access to fewer mortgage services, and often take up risk loans, creating a vicious cycle where African Americans are stifled off the opportunity for wealth creation. A popular argument proposed by some groups of estate managers and home appraisers is that the homes are often in ‘destitute’ and in ‘states of disrepair’. But with black and ethnic minorities in America taking up low paying jobs and suffering frequent loan denials, it is difficult to see how home renovation cash can be regurgitated without losing some weight and missing a couple meals.
Secondly, those who already own homes in relativelyprestigious conditions and “areas” are not protected from the system. In a 2018 study it was discovered that black owned homes in Black neighbourhoods often suffer devaluations by up to 23%! in comparison to identical Hwite neighbourhoods.It is no surprise to see that African American families have familiarized themselves with a special skill: purging their homes, with urgency and alacrity, off every sign of ‘blackness’ during appraisals. Although such practices have been abolished, bearing sanctions upwards of 3yrs jail time, the laws enforcement has remained poor. The effect of this discriminatory practice alone has been evaluated by the 2018 study to cost African American homeowners around $156billion (let that sink in).
The long-term effect of the racist policies in the housing sector is a typical example of systemic racism. Fortunately, there are hopes of the system getting better with higher demands for estates with high diversity ratios, and companies making conscious efforts towards making reparation for centuries of continued loss (evident in Wisconsin’s biggest bank paying up to 200million in 2015). So far statistics have shown around 71% of Hwite household are homeowners, compared to 41% for black households. Eventually, if the government can improve its enforcement of the FHA and incentivise business to invest in black and ethnic minority areas, it will place on the plate of these communities, the ‘creme-de-la-crème’ of the American dream.