03/10/2021
Minnesota has the 4th largest homeownership gap between White households and households of color. Between White and Black households, it’s the largest in the country. For months I have been trying to write something concise on our history of race and racism in housing, the racial homeownership gap in Minnesota, and the role that racist policies played in creating the American middle class. But the topic is so big and our country’s race issues go so very deep that I couldn’t keep it concise enough for people who may be just beginning to learn about these things. But here are a few bits to consider:
-What wealth American lower and middle-class families have is primarily tied up in their homes which are eventually passed on to their children. If one’s family and all their preceding generations were prohibited from owning a home due to racist, Whites-only policies, it would be difficult to create any generational wealth.
-Beginning in 1910, Minnesota like other states, embraced racial covenants and deed restrictions that legally forbid the resale of homes to non-Whites. In 1948 the Supreme Court decreed these restrictions to be unenforceable however Minnesotans continued to use them until 1953 when the State outlawed new ones. It wasn’t until 1962 that Minnesota finally declared them actually illegal.
-In 1934 the Federal Housing Administration created a system of insuring home mortgages which allowed for lower down payments and put homeownership newly within reach of many. But the Feds encouraged racial deed restrictions and they created maps of relative lending risk in over 200 US cities, “redlining” maps, that divided cities along racial and ethnic lines. Banks wouldn’t lend in neighborhoods of color (deemed ‘high lending risk’) at the same time people of color were prohibited from buying in (‘low risk’, lendable) White neighborhoods.
-After WWII, returning soldiers accessed the GI Bill to purchase homes. Although these programs were purportedly available to all veterans, these benefits were granted almost entirely to Whites.
-In the first half of the Century, the Realtor Code of Ethics stated that Realtors would not change the “character” of neighborhoods. That bit was changed in the early 1970’s (and today Realtors are one group of several at the forefront of the fight for equality in housing).
-The Fair Housing Act of 1968 finally made racial discrimination in the sale, rental, and financing of housing illegal.
-In the run up to the Great Recession in the mid-2000s, some banks specifically targeted African Americans and other minorities for expensive, high-risk loans even when they qualified for low rate, low fee ones. A large percentage of these loans were refinances seeking lower rates and access to the equity they’d built up over the years. When the recession hit and the housing market collapsed, these families were some of the first to lose their homes.
-Homeownership today among Black Minnesotans is lower than it was 70 years ago. (It peaked in the 1950’s)
Today in Minnesota, the median White household’s wealth is $211,000.
Today in Minnesota, the median Black household’s wealth is $0.
Zero. Dollars.
When people talk about “systemic racism”, this is just one example of what they mean.
This is a link to an easily digestible article from the Federal Reserve Bank of Minneapolis illustrating how America (and Minnesota), kept nearly anyone who wasn’t White from buying homes and thereby building generational wealth to pass to their children.
You don’t have to be overtly racist to benefit from racist systems.
How generations of discriminatory policies and practices created and reinforce racial disparities in homeownership
