August 2020 Newsletter

History and How Pathfinder Services HomeOwnership Center Can Help

In 1934, with The National Housing Act, redlining was created. Redlining meant in each city, maps were drawn to display the best neighborhoods to buy a home versus the worst neighborhoods. The maps were very clearly drawn to revolve around color lines, both figuratively and literally.

Green neighborhoods were where prominent white businessmen should move their families. According to the book, “The Color of Law: A Forgotten History of How Our Government Segregated America” by Richard Rothstein, the covenants created for these suburban neighborhoods very explicitly stated that the homes were not to be sold to “Negroes.” Blue neighborhoods were for white collar families. meaning white middle-class. Again, the covenants created for these neighborhoods also excluded black families. Yellow neighborhoods were where blue-collar white families should buy a home. Here too, these areas were strictly to adhere to a non-negro-owned commitment.

It was red neighborhoods where only the poorest and “most despised” should live, according to Rothstein. Through legitimate documentation from those times, that was where people who were recent immigrants and most importantly, “Negroes” should be driven.

The effects of redlining ultimately led to properties being owned by white investors and banks to ensure black and immigrant families living there would have very difficult odds to obtain ownership of those homes. It was a system created to increase wealth and economic mobility of white families, but the obvious and natural impact would be that it placed foreigners and black people into poverty situations with little chance for improvement.

Rothstein says, “Until the last quarter of the twentieth century, racially explicit policies of federal, state, and local governments defined where whites and African Americans should live.”

Segregation was the intent and redlining was the means to the end. These are hard facts to hear, but they are facts, nonetheless. It’s all written and displayed in the documentation from that time in American history. While difficult to face, it cannot be denied.

For the next 34 years, this system was able to take deep root in American society. In 1968, the Fair Housing Act was passed, but the damage of the prior three decades was irreversible. The racial wealth gap has only gotten worse. In 1968, the typical black family had 1/6th the wealth of a typical white family. That means for every dollar that a black family had, a white family had six dollars. Today, that statistic is worse. Black families now hold 1/10th of the wealth as the average white family, so for every dollar that a black family has, the average white family has ten dollars. Homeownership has been the most important factor in building wealth for Americans, so we can see the parallels between homeownership and the racial wealth gap today.

Homeownership rates for white families have been the highest of any race or ethnic group throughout the period from 1940 to 2019. (See table below.)

Year White Black
2019 74% 44%
2010 75% 46%
2000 74% 47%
1990 68% 43%
1980 68% 44%
1970 65% 42%
1960 64% 38%
1950 57% 34%
1940 46% 23%

I highly recommend watching a couple of videos explaining in more detail what I have attempted to explain in this month’s newsletter.*Data sourced by the Federal Department of Housing and Urban Development and the Federal Census Department

and the Netflix episode of Explained: The Racial Wealth Gap)

The natural question then is, “What can we do about homeownership rates for minorities and the racial wealth gap today?”

The honest answer to that is not much. I won’t sit here writing this newsletter to give a lofty sense of false hope. It has been proven that it would take extreme measures to close the racial wealth gap today. It will take multiple generations (nearly 200 years) of equitable work to close the racial wealth gap.

We can be inviting and inclusive in our communities. We can tell our state and federal legislators that we expect them to author and support equitable bills, particularly about housing opportunities for people of color. We can educate ourselves and try to inform those around us of the realities that minority families face in America, particularly black families. We can still do things.The one thing we cannot do is give up hope or stop fighting for racial justice. At Pathfinder HomeOwnership Center, we are partnered with the City of Fort Wayne Community Development Department to help people with down payment assistance loans in distressed or under resourced neighborhoods in the city…neighborhoods made up of predominantly black residents and other minority groups. We help black families and other minority groups build homes in Allen County through partnerships with local builders every year using mortgage products focused on affordability, not the subprime predatory loans historically offered to minority families. On average, our customers end up saving more than $150 per month in housing costs compared to HUD’s Fair Market Rent. We have a commitment to help anyone buy a home anywhere. We’re committed to creating opportunities for people to choose where they want to live and where they want their kids to go to school. I personally take our mission to heart every day.

Discrimination will never have a place in our work. Everyone deserves a safe, affordable home. Everyone deserves opportunity and the freedom to choose where they live. I want to see northeast Indiana be a place where diversity is embraced in our communities and the historical impact of racist governmental policies are completely overridden by care, compassion, and genuine equity. Pathfinder HomeOwnership Center is committed to this through our programming and services. I hope that you will join us in that commitment.