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    Black Americans Face an Unequal Housing Market—and Coronavirus Could Make It Worse

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    Black Americans are twice as likely to die from COVID-19 in America. And the pandemic may also cost many of them their homes.

    recent report from the Urban Institute, which analyzed U.S. Census Bureau survey data, found that nearly one in four black and Latino renters didn’t pay or deferred their rent in May, compared with just 14% of white renters. And the problem may soon get worse: Nearly half of black and Latino rents expressed concern about being able to pay their rent in June.

    People of color, compared with white Americans, are disproportionately more likely to hold a low-wage job or a job that cannot be performed remotely.

    “Black and Latino people have been hardest hit by stay-at-home orders and other public-health measures put in place to slow the spread of COVID-19 because of a legacy of occupational segregation,” Urban Institute vice president of housing finance policy Alanna McCargo and senior fellow Solomon Greene, wrote in the recent report.

    African-Americans are more likely to live in densely populated housing, such as an apartment building, with communal spaces that put residents at a higher risk of contracting the virus.

    “Layoffs related to COVID-19 for black and Latino workers are also more likely to lead to housing instability, as they already reported higher rates of financial insecurity and lower savings to draw from to weather economic shocks before the crisis began,” the researchers added.

    The housing conditions for black Americans also leave them more exposed to contracting coronavirus that causes COVID-19. Only 54.5% of African-American households live in single-family homes, according to a report from the Economic Policy Institute, compared with 74.5% of white households.

    African-Americans are more likely to live in densely populated housing, such as an apartment building. Those buildings likely have communal spaces that see a high degree of foot traffic, putting residents at a higher risk of contracting the virus.

    Matters were also worse for black homeowners than their white neighbors. Twenty-eight percent of black homeowners did not pay or deferred their mortgage payment in May, compared with just 9% of white homeowners, the Urban Institute reported.

    “The housing emergency most harms people of color,” Diane Yentel, president and CEO of the National Low-Income Housing Coalition, a national non-profit organization committed to expanding affordable housing for low-income Americans, wrote in memo.

    “Without focused action, the pending tsunami of evictions and homelessness will disproportionately affect black and brown people,” Yentel wrote.

    ‘Without focused action, the pending tsunami of evictions and homelessness will disproportionately affect Black and brown people.’

    Diane Yentel, president and CEO of the National Low-Income Housing Coalition

    Black homeownership already lags that of white Americans. In 2019, the homeownership rate among black Americans was just 42.9%, the lowest in two decades and lower than the rates for white, Asian and Hispanic Americans. African-Americans are also significantly more likely to be low-income renters. But research shows that sudden economic and natural disasters can have a damaging effect creating even more prominent disparities in housing based on race.

    “Home equity makes up a disproportionate amount of overall net worth for black and Hispanic households, and they have fewer liquid assets and lower retirement and traditional savings,” researchers at the Urban Institute wrote in a separate report released Monday. “This suggests that people of color are likely to have greater difficulty recovering from an economic shock, suffering more severe losses of wealth and a slower recovery.”

    Even before the coronavirus pandemic threatened to uproot black Americans from their homes, they already faced a housing market marked by inequality, whether they are renters or homeowners.

    People of color across the United States continue to feel the effects of racist “redlining” housing policies, an issue that came up during the Democratic presidential debates earlier this year.

    Boosting the returns on homeownership for black families could reduce the racial wealth gap with white families by 16%.

    Redlining refers to the denial of financial services to neighborhoods typically populated by people of color. Specifically, the Federal Home Loan Bank Board and the Home Owners’ Loan Corporation drew up color-coded maps that designated how risky it was for lenders to originate mortgages in different neighborhoods across the country. The most risky neighborhoods were outlined in red, and those neighborhoods tended to be predominantly black.

    The practice was common throughout the first half of the 20th Century, but was officially outlawed through a series of legislation passed in the 1960s and 1970s. Many of America’s largest cities, particularly in the northern part of the country, remain heavily segregated by race or ethnicity, reflecting the long-term effects of this practice.

    And recent reports have found that racist housing practices continue despite being officially illegal. A recent investigation by Newsday uncovered evidence that many real-estate agents in Long Island, N.Y., steer clients to neighborhoods based on their race or ethnicity. And an analysis of 61 metro areas by Reveal News also suggests the practice still exists.

    Home prices in redlined neighborhoods have never fully recovered

    In neighborhoods that were once redlined, home prices are still lower to this day. A 2018 study from Zillow  found that a home located in an area given a “hazardous” rating in the 1930s is still only worth 85% of the median value of a home in a nearby, non-redlined neighborhood.

    To this end, presidential candidate Joe Biden has called for new regulations on the real-estate appraisal industry to help black and Latinx homeowners.

    The disparity in home prices has contributed to the racial wealth gap because black homeowners in these communities have not seen their wealth that is tied up in their homes grow as much as their white neighbors. A 2015 report from the public-policy organization Demos and the Institute for Assets and Social Policy at Brandeis University found that boosting the returns on homeownership for black families could reduce the wealth gap with white families by more than $17,000, or 16%.

    People of color have a harder time getting a mortgage

    African-Americans make up 13% of the country’s population, but they only received 6% of the mortgages that were originated in 2016, according to a MarketWatch analysis of Home Mortgage Disclosure Act data that demonstrates whom lenders are serving.

    Following the financial crisis of 2008, many mortgage lenders instituted more stringent requirements for potential borrowers, in part to adhere to new laws that were created to stave off a future financial collapse. But as a result of those policies, fewer black and Latino mortgage applicants were approved, meaning they had a harder time buying homes. This contributed to the decline in the homeownership rate, particularly among black Americans.

    Since the coronavirus pandemic began, mortgage lenders have tightened their standards even more, requiring higher credit scores and more thorough employment checks. That could make it even harder for African-Americans to join the ranks of homeowners nationwide.

    The post Black Americans Face an Unequal Housing Market—and Coronavirus Could Make It Worse appeared first on Real Estate News & Insights | realtor.com®.

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