Making Home Ownership Inclusive and Accessible for Every American
Washington, September 26, 2022
Newsweek - Rep. Gwen Moore and Rep. Jim Himes
Rent is taking up more and more of renters' paychecks and home ownership is getting less attainable, with close to two-thirds of renters saying home ownership is unaffordable for them. An inaccessible housing market isn't surprising news for many of our constituents, it's their daily reality. Americans on the edge of financial ruin face this issue in their daily lives and have never had equal access to the market. Understanding the legacy of historic inequities and discriminatory policies can help us build a more inclusive economic future in which affordable, quality, and safe housing is possible for all Americans.
For nearly a century, the federal government has promoted access to housing markets. As the Great Depression caused mass foreclosures, President Franklin D. Roosevelt created the Federal Housing Administration (FHA) to insure mortgages and provide credit for Americans to make home purchases and improvements. The 1944 GI Bill provided low-interest home loans to millions of World War II veterans. But unequal implementation caused racial disparities in home ownership.
The FHA refused to insure mortgages in predominantly Black neighborhoods and often restricted sales to whites only. Another New Deal-era corporation, the Home Owners' Loan Corporation, engaged in a practice known as "redlining" when it drew maps for over 200 American cities to rate the perceived riskiness of lending across neighborhoods, scoring certain racial, ethnic, and immigrant compositions as negative attributes. Black American families were often shut out by banks unwilling to lend in neighborhoods considered "risky." In Milwaukee, these practices segregated Black residents, forcing them to live in lower-quality housing in neighborhoods lacking essential services like grocery stores and financial firms.
To reverse some of this harm, President Lyndon B. Johnson signed the Civil Rights Act of 1968, including Title VIII—also known as the Fair Housing Act. This law prohibited housing discrimination on the basis of race and national origin. But this step in the direction of racial equity didn't fully dispel the consequences of discrimination and segregation. Today, Black home owners receive lower home appraisals and higher-cost mortgages. We saw these consequences on a recent bipartisan congressional trip to Wisconsin.
As part of our ongoing mission to break out of the Beltway and listen to people in every corner of America, the U.S. House Select Committee on Economic Disparity and Fairness in Growth took a bus tour through neighborhoods in Milwaukee with local civic leaders for an in-depth, firsthand look at the housing challenges facing residents of color. We saw stark examples of deindustrialization—shuttered factories and boarded-up storefronts—compounded by racial inequities from generations of redlining and "blockbusting," another predatory practice where powerful property developers and real estate agencies pressured white home owners, through racialized fear campaigns, to sell their homes at low prices, which were then sold to Black residents at highly inflated prices.
These practices helped make Milwaukee one of the most racially segregated cities in the country. That's not hyperbole. A 2020 UW-Milwaukee report on "The State of Black Milwaukee" noted the city "represents the archetype of modern-day metropolitan racial apartheid and inequality." Milwaukee has one of the lowest Black home ownership rates in the nation, and its low-income Black youth have fewer opportunities to accumulate wealth and build economic security than almost all of their peers nationwide.
Despite the dark historical context, we found bright spots of renewal, revitalization, and community pride. We visited Bronzeville, a Black community that helped give Milwaukee its nickname as the Harlem of the Midwest. Bronzeville was broken up by highway construction and eminent domain in the 1960s. But the largest blow came from aggressive policies of urban renewal, which devastated Black residents. As Bronzeville was inching towards resurgence, the 2008 recession brought it to its knees, with banks and businesses closing in droves.
Today, the area is experiencing a renewal as businesses and storefronts come back to life. We toured Sherman Park's construction site for the "Community Within the Corridor" project, which will provide 197 affordable, multi-family housing units and more than 60,000 square feet of commercial and community space in the heart of Milwaukee's largest neighborhood.
Such projects rely on initiatives like the Low-Income Housing Tax Credit (LIHTC) program. LIHTC lets state and local agencies issue tax credits for building affordable housing for individuals and families. Milwaukee and other communities have used it to leverage public and private funding for new projects, including a $6.3 million affordable housing block of 46 units in Milwaukee's Walker's Point neighborhood.
Throughout our trip, LIHTC was saluted as one of our most important affordable housing tools. And this is no local quirk—in March, the Select Committee held a hearing examining the role stable and affordable housing plays in creating paths to economic security and mobility. "We hope that this committee understands and recognizes the importance of LIHTC, the best investment tool we have available for affordable housing in this country," testified Kevin Nowak, executive director of Cleveland Housing Network (CHN) Housing Partners and CEO of CHN Housing Capital. LIHTC is crucial, but it's only one tool.
We must also address the disparities in Black home ownership rates (43 percent compared with 72 percent of white families). We may never completely undo the damage of redlining and blockbusting, but we can dramatically increase Black home ownership by extending credit and expanding down payment assistance. Matched savings programs and advanceable tax credits for low-income first-time homebuyers can help close the Black home ownership gap across the country. Housing counseling services can also help home owners maintain stable housing situations, reducing the likelihood of foreclosures and delinquency.
We should also consider reforming the mortgage interest deduction (MID), a tax incentive that lets home owners deduct from their taxable income the interest paid on loans used to build, buy, or make home improvements. Habitat for Humanity notes the MID is "strikingly inequitable—often only benefiting high-income home owners with the largest mortgages. It is also quite expensive—historically costing more than all of HUD and USDA's housing programs combined." By reimagining the MID as a tax credit, we can make it more accessible to low-income home owners of color, and provide more Black Americans with lasting, sustainable home ownership opportunities.
As members of the Select Committee on Economic Disparity and Fairness in Growth, each of us represents unique communities in vastly different regions of the country, from the Midwest to New England. The struggles of our constituents to access safe, high-quality, affordable housing make our collaboration on the Select Committee urgent.
Ending the housing affordability crisis and closing the home ownership gap does not have to be a distant dream. We have the resources and perspective to make access to affordable, safe housing a reality for all Americans. Every member of Congress should support these efforts. Housing isn't just a roof over your head. It's a source of dignity, community, and the ability to prosper.
Representative Jim Himes (D-Conn.) is chairman of the House Select Committee on Economic Disparity and Fairness in Growth. Representative Gwen Moore (D-Wisc) is a member of the House Select Committee on Economic Disparity and Fairness in Growth.
The views expressed in this article are the writer's own.