PHILADELPHIA (KYW Newsradio) — Philadelphians’ views of the city have dimmed amid surging gun violence, according to a recent Pew survey. Fewer people feel safe, and many say the quality of life is down. Experts link this trend to systemic problems, including access to homeownership for people of color.
Homeownership is part of the great American dream, but for many people of color, that dream has been out of reach.
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“In a city like Philadelphia where 44% of the population identifies as Black, we really need to think critically about the tools and resources that we need to put into place to shrink the homeownership gap,” said Theresa Singleton, senior vice president and community affairs officer for the Federal Reserve Bank of Philadelphia.
The bank has been studying the disparities in homeownership between Black and white Philadelphians and found Black applicants are about three times more likely to have higher mortgage denials than white applicants. In 2020, Black applicants were 2.7 times more likely to be denied by lenders. This negative trend for Black homeownership has been happening since the 2010 recession.
In Philadelphia and nationally, the racial gap can be seen plainly in city home values. Singleton said the median home value of Philadelphia homes owned in predominantly Black census tracts is significantly lower.
Nationally, “owner-occupied homes in Black neighborhoods are undervalued by as much as $48,000 per unit, and that reflects about $156 billion in lost wealth for those homeowners,” she added. “Trying to understand some of the factors that are contributing to the valuation of Black homes is going to be a critical part of not only individual wealth-building but community wealth.”
Generational wealth and gentrification
The problem is complex and rooted in a long history of racist practices. Today, even with laws in place to prevent outright discrimination, it’s still happening, said Kia Ghee, executive director of the Philadelphia Commission on Human Relations and Fair Housing Commission.
The city is studying the issue comprehensively, but anecdotally, she said she’s seen the evidence.
“Home appraisers that are going out to a home that’s substantially the same — maybe sometimes even the same home with different owners,” she said. “When it was owned by a white family, it was valued at ‘X’ amount and then devalued significantly when a Black family was in possession of that home.”
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The issue is exacerbated by the city’s building and development boom.
“What we’re hearing is that the gentrifying neighborhoods are being hit with a barrage of unlawful, unethical harassing attempts for homeowners to sell their homes significantly under value,” Ghee explained. “In some instances, they have presented misleading or false information to the homeowner about the true value of their home.”
She said gentrification needs to be addressed.
“We have to keep an eye on the fact that these are still the same neighborhoods. What’s happening is once diversified, all of a sudden that same neighborhood is given value. We have to look at the deeper issue. It’s a systemic issue that says once someone other than a Black family comes in, it’s now valuable.”
Redlining
All of this sits on the backdrop of America’s history of redlining, which Attorney General Merrick Garland acknowledged last year.
Starting in the 1930s, homes in neighborhoods with blight, high crime and neglect couldn’t be insured, and mortgages were not easy to obtain in those so-called red zones, which typically had what was known then as an “undesirable population” of African-Americans, immigrants and Jews.
“What that did for African-Americans, they couldn’t even get a mortgage or hold on to a piece of land,” said Ghee. “If they did, the land that they had wasn’t really worth anything.”
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Redlining was outlawed in 1968, but its legacy remains. As of 2019, 47% of Black families in Philadelphia are homeowners compared to 59% of white families, and the impact has trickled down to the quality of life. If more people of color owned their homes, Singleton said that would improve the climate of the city.
“It’s been shown in various studies that homeowners have a different level of civic engagement,” Singleton noted. “They are participating in the PTA, they are doing block cleanings, they’re just really engaged in the community in ways that are different and have incredible value to the community.”
A dream realized
Although the path to homeownership can be riddled with traps, snares and heartache — especially for many Black families in Philadelphia — there are solutions.
Dwayne Fair has been living in Philadelphia for more than five decades but, only until recently, never lived in a house that he or his family owned. It became his mother’s wish for him to buy the home they had been renting since 1968.
“She said, ‘Whatever you do, don’t let this house go.’ 2012, it started clicking. I was out there working and then about five years ago I said, I have to put my foot down,” Fair recalled.
He began to prepare for homeownership — he took a chance and attended the Philadelphia Housing Authority’s (PHA) Family Self-Sufficiency Program.
“That was my biggest help!” he exclaimed. “He was telling us about things like our credit score — I never even thought about my credit score. Now, my credit score is in the 800s. Mr. Charles Barnett taught us about saving money and budgeting money and now he and I became brothers.”
Fair said the feeling of homeownership is “astronomical.”
“To know that if something goes wrong in there, it’s my responsibility. I don’t have to call or worry anybody, I don’t have to wonder when someone is coming,” he said. “If it doesn’t get fixed, it’s on me. To know that any of my family can walk in there without anyone questioning it’s ours.”
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Fair’s success story is one that PHA President Kelvin Jeremiah would like to see repeated more often. However, he said access to credit amid systemic racism has played a role in the gap in Black homeownership.
About 25% of the city’s population lives in poverty. Some are unemployed or underemployed; others have damaged credit or simply lack the knowledge.
“If you are making minimum wage, how do you save for a down payment?” Jeremiah asked. “How do you save to address the closing costs? How do you save to move when in fact you are living paycheck to paycheck?”
Fortunately, Jeremiah said it can be done. PHA has a first-time homebuyers program that can prepare people for the process.
He said many people who are in public housing tend to think that they can pass the units on to their children, but that’s not the case.
“It’s not theirs. It’s not in their names. We want to make sure that as these generations are coming up, that they know that they have these opportunities,” Jeremiah continued.
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African-Americans need to have a stake in their communities too, he said, and one way to do that is to put a name to the property. Another PHA program makes that easier for some qualifying low-income families in the city.
“We have a great program that allows you to transfer the payment that you would make to your landlord. We would actually make that directly to pay your mortgage so you don’t have to be a voucher recipient,” Jeremiah explained. “You can actually build wealth while being on the program.”
Meanwhile, Fair is enjoying the fruits of his labor, and he’s an advocate for homeownership.
“I try to preach this: If you don’t own something, you’re really just wasting your time. Sooner or later, at the end of the day, where do you end up? You’ve got to have your name on something.”
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To learn more about various programs available through the Philadelphia Housing Authority, visit pha.phila.gov.