In summary

An alliance of groups should come together to address the issue of homeownership for marginalized communities.

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By John Gamboa

John Gamboa is the founder & board chair of California Community Builders.

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Hannah Phalen, Special to CalMatters

Hannah Phalen is a master’s of public policy student at the University of California, Berkeley’s Goldman School of Public Policy and a senior program manager at California Community Builders.

If you feel our country is slowly coming apart, you may be right. We are divided by religion, political party, race, gender and wealth. If ignored, these divisions weaken our democracy and leave our children a dysfunctional government and a society that demonizes anyone who doesn’t agree with us. 

Sadly, a source of this dysfunction is our federal legislators who add fuel to the discontent and exacerbate these divisions, prioritizing their personal political goals and party before their constituency or country.

The most egregious example of this legislative failure is the unwillingness or inability to address the centuries-old racial conflict in our nation. The racial division is largely the result of a large and growing poverty and wealth gap of families and communities of color. 

The primary contributor to our growing wealth gap is the 90-year history of mortgage discrimination which prohibited home loans for families of color. From 1934 to 1968, 98% of FHA and VA loans were made to white families. 

Today, white families have 10 times more wealth than families of color. The white homeownership rate is 73%, but for Black families it is only 42%, and for Latinos only 47%. Homeowners have 40 times the wealth of renters, which partially explains other quality-of-life disparities such as educational attainment, health and employment for families of color. 

Though there is no silver bullet that can immediately remedy the racial wealth gap, we must explore a new paradigm in homeownership and wealth creation. An alliance of entities that do not normally work together, but all have a vested social or economic interest in home and community building could fill the void. 

Financial institutions, insurance companies, developers, building material suppliers, realtors and mortgage brokers, title companies, labor unions, and building trades should come together to address the issue of homeownership for marginalized communities.

In addition to those with a financial interest in promoting homeownership, the alliance should include government planning agencies and nonprofits focused on developing positive long-term health and economic outcomes. This new paradigm would create a platform where new and innovative ideas to address the homeownership crisis and the racial wealth gap can be explored.

California has an acute housing supply shortage, homelessness crisis and homeownership equity gap. The alliance described could lead to California tackling this civil rights issue legislatively and leading the nation. 

While California’s leaders have gained much interest in recent years, affordable housing remains a code-word for affordable rentals. Affordable rentals are a crucial part of our social safety net, but they will not directly address the wealth gap and racial divisions that stem largely from homeownership being out of reach. 

We need to focus additional legislation on more ownership opportunities of all types, not just single-family homes, that can give people of color more autonomy, control over their environment and an opportunity to build intergenerational wealth.  

A lack of homeownership opportunities for communities of color has led to the ever-growing racial wealth gap. Homeownership should be viewed and tackled as a civil rights issue, one that deeply affects our country’s future, and one that begins a societal healing that our legislative leaders have failed to do.

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