A new housing report released by New York State Attorney General (OAG) Letitia ‘Tish’ James last week finds that there are deep racial disparities in homeownership in every region across the state due to discriminatory lending practices and credit access, among other factors. The report shows white households are more than twice as likely as Black or Latino households to own their home.
“Owning a home is an essential part of achieving the American dream and building wealth to pass on to future generations,” said James in a statement. “Unfortunately, unequal access to affordable credit is still pervasive across our state, reinforcing the legacy of segregation, leading to a disparity in homeownership, and fueling the racial wealth gap. This report makes it clear that our state must do more to provide better resources for homebuyers and strengthen housing laws to help empower more New Yorkers.”
These racial disparities are the direct result of decades of redlining, or segregating Black people into impoverished neighborhoods, through public policy and institutional bias since the 1930s, said the report. The Fair Housing Act in 1968 supposedly banned racial discrimination in housing, as did the Equal Credit Opportunity Act in 1974, and the Community Reinvestment Act in 1977. But laws on the books hardly changed hearts and minds right away. There was significant underenforcement that continued.
For instance, during the “subprime lending boom” that came before the 2008 financial collapse, lenders filled communities of color with predatory loan products that caused waves of foreclosures. And years later, during the COVID-19 pandemic, many already affluent and white New Yorkers invested in property while Black homeowners struggled to stay afloat, said the report.
“Even though the Fair Housing Act and the New York State Human Rights Law prohibit discrimination in home sales and mortgage lending, it still occurs at an alarming rate,” said M. DeAnna Eason, executive director of Housing Opportunities Made Equal in a statement. “The issues of systemic racism that plagued our communities decades ago remain today and pose significant barriers to families of color. This report from Attorney General James shines a light on a very serious wrong, so that we can continue to combat these prejudices.”
The report found that Albany has the second-largest gap between white and Black homeownership of any city nationwide, second only to Minneapolis. In the 1930s, Albany had a small Black population deemed “hazardous” for lending. This community was redlined into the South End, Arbor Hill, and West Hill neighborhoods.
Additionally, the report said that “all applicants of color are denied mortgages at higher rates than white applicants, regardless of credit score, income, size of the loan, and other factors,” even if applicants had high credit scores. Applicants of color also face higher interest rates for their loans than their white counterparts and are less likely to be approved to refinance their loans to a lower rate. The report estimates that overall Black and brown borrowers faced $200 million more in interest and other costs and fees over the course of their loans as compared to white and Asian borrowers.
The OAG found that lenders and bankers rarely open branches in communities of color across the state, meaning Black and brown people often have to travel farther white neighborhood counterparts to reach a bank. There’s also a persistent distrust of banks in Black communities and many preemptively don’t apply for mortgage loans because they assume they’ll be discriminated against, said the report. Statewide, lenders received fewer applications from Black and Latino applicants than their proportion of the state population, with 7.6% of purchase applications from Black applicants and 9.5% from Latino applicants.
President and CEO of Hispanic Federation Frankie Miranda said in a statement that there’s a long way to go to ensure that communities of color have equitable opportunities to own a home.
“Homeownership is a crucial way for families to build generational wealth, and it’s unacceptable that Black and Latino New Yorkers continue to face higher costs and interest rates that shut them out of the real-estate market. It’s past due for the state, federal, and private sectors to come together and begin breaking down these barriers so that all New Yorkers, regardless of their race or zip code, have an opportunity to own a home,” said Miranda.
The OAG suggested state-level policy solutions in the report that could help close the racial homeownership gap. It said that the state should subsidize down payments and interest rates for first-generation Black homebuyers, increase state funding to nonprofits that support underserved communities, pass the New York Public Banking Act to establish more public banks, open more fair lending investigations, and explore options for state-provided banking services at places like libraries and post offices to increase access.
Ariama C. Long is a Report for America corps member and writes about politics for the Amsterdam News. Your donation to match our RFA grant helps keep her writing stories like this one; please consider making a tax-deductible gift of any amount today by visiting https://bit.ly/amnews1.