Most Americans’ greatest asset is their home. According to the Economic Policy Institute, housing equity makes up two-thirds of wealth for typical American households, and most wealth for black families is held in their primary residence. But because of segregation and structural racism, owning a home has not provided the same value and pathway for wealth creation for black Americans as it has for white Americans. Barriers to buying a home contribute to a wide homeownership gap between black and white households. According to recent research, 42.2 percent of black households owned homes in 2015 compared with 70.8 percent of white households. The homeownership advantage for white families is so strong that black people who have completed college are less likely to own a home than white people with no more than a high school diploma.
Homeownership often translates to wealth accumulation, and wealth grows generationally. As a result, the wealth gap between white and black families has grown over the past 50 years. In 2016, white wealth was seven times greater than black wealth. Even if black families own homes, home equity does not necessarily provide the same savings and wealth-building opportunity as it does for white families. In 2013, median home equity for black homeowners was just $47,000, compared with $90,000 in home equity for white homeowners. The typical home equity accumulation for black homeowners ages 65 and older still lags far behind their white counterparts, and black homeowners are more likely to enter retirement owing more on their home than it is worth.
Structural racism in policy and practice
To explain these disparities and discuss solutions, we have to examine and acknowledge the role that structural racism, history, and segregation play. The Aspen Institute defines structural racism as “a system in which public policies, institutional practices, cultural representations, and other norms work in various, often reinforcing ways to perpetuate racial group inequity.” Urban Institute experts note that “once these structures are in place, no one has to actively think about race, privilege, or discrimination for these privilege systems to disadvantage people of color. Historical discriminatory processes such as housing segregation relegate people of color, particularly black Americans, to communities with inferior housing. Lower housing appreciation that results often means lower wealth accumulation. These structural disadvantages can hamper future generations from moving up the economic ladder without any overt racial discrimination in hiring.”
[For more on this story by Janae Ladet, go to https://howhousingmatters.org/...e-structural-racism/]
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