CPP’s California policy center discusses racial gaps in homeownership

By Aprille Gozdecki, May 4, 2021

The California Center for Ethics and Policy at Cal Poly Pomona hosted a panel discussion, Racial Gaps in Homeownership, Income, and Savings (and Why They Matter): From Fair Housing to Fair Savings, on April 23.

The panelists discussed the long-term impacts on household incomes, housing insecurity, accumulation of wealth and assets and intergenerational transfers of wealth as well as how underdeveloped communities are affected by the availability of capital to start a new business and funding to support community organizations and community improvements. The panel also pondered if the end of the pandemic would improve or worsen the relative competitiveness of Latinx and Black Americans in the U.S. economy.

“It’s a really pressing social problem; the wealth gap in general across different racial groups is really stunning,” said Alex Madva, director of CCEP and associate philosophy professor. “By some measures Black folks have about 5% of the wealth that white folks do on average and housing is a huge contributor to that factor.”

The panel focused on understanding why Black and Latinx Americans continue to lag behind white and Asian Americans in rates of homeownership. According to MarketWatch, the Black homeownership rate hovers at around 44%, while the white ownership rate is approximately 74%.

Courtesy of Unseen Histories. Caption reads, “CORE-sponsored demonstration at realtor office of Picture Floor Plans, Inc.” Original black and white negative by the Seattle Police Department. Taken May 4th, 1964, Seattle, Washington State, United States (Seattle Municipal Archives). Colorized by Jordan J. Lloyd. Seattle Municipal Archives Series 5210-01: Records of the Office of the Mayor, 1956-1970 http://archives.seattle.gov/digital-collections/index.php/Detail/objects/102614

The event included three guest panelists: Anaid Yerena, an architect, planner and researcher at the University of Washington, Tacoma; Lori Gay, president and CEO of Neighborhood Housing Services of Los Angeles County; and Gary Painter, director of Sol Price Center for Innovation and director of Homeless Policy Research Institute at USC.

“All of the panelists were great, but the one that stood out to me the most was Lori Gay,” said Dannielle Cabrera, third-year psychology student. “I felt that there was this very real rawness to it, where she was like, ‘This is what it is, and these are the disparities, and this is why’ which is something that I appreciated because you don’t hear it often.”

Gay pointed out that when the Neighborhood Housing Society started studying people’s migration patterns, they found that white people were moving west whenever other races were moving into their areas. People were not comfortable living together.

Throughout the United States, redlining and Jim Crow policies led to ongoing, systemic discrimination for hundreds of years. Redlining started in the 1930s as a color correlating property value grading system that was developed be the Home Owner’s Loan Corporation.

The different colors were used to label areas as “high risk,” being mostly Black Americans or Latinx and “low risk” being the suburbs with mostly white people. Banks would commonly reject loans based strictly on race or where a person lived.

According to CBS News, redlining is a form of lending discrimination and has been outlawed for decades, but the scars remain visible in many communities across the country. Banks may engage in predatory lending in the same neighborhoods that were once marked as off limits for borrowers, this practice is called reverse redlining.

Gay also brought up the appraisal studies that Neighborhood Housing Society conducted that show how a house can be valued at different prices solely based on the neighborhood that the house is in. She proposed that the way to help solve the problem would be to have the Appraisal Industry of America reassess its calculations so that the same house will be valued at the same price regardless of where the house is located.

“I still get spit on in business,” said Gay. “We know that systemic racism is spit. These are not nice things and so we need to rid ourselves of these ills in our society. And we can because there’s never been a better time than today.”

Painter conducted audit tests where he would put an equivalent Black person with an equivalent white person in terms of income. Painter then had the subjects apply for a home or a mortgage or any other form of housing.

“When it comes to the housing market, every place in a housing career we see discrimination,” said Painter. “If your name doesn’t sound white, you get a different response rate. My research has shown that if you have a name that doesn’t sound white, you’re more likely to be asked to provide more documentation to prove to them that you are stable.”

Before the panelists answered the questions related to the event, they all explained what made them decide to pursue their respective careers, and all the panelists grew up in lower income communities.

“I appreciated how much they shared because a lot of people don’t share the reality of what it was to be lower income,” said Cabrera. “I remember it was Dr. Huerta who said, ‘everybody in the neighborhood is poor, so they don’t realize it.’ It was very relatable.”

The CCEP has been holding panels all year long looking at different aspects of the housing crisis in California and after their first panel, Housing Justice: From Trump to Biden, Jeff Mio, psychology professor, introduced an idea of having PO boxes on campus for students to use if they are dealing with any housing insecurity.

“So, students would be able to use if they were feeling out a job application or an address to get their unemployment checks sent to,” said Madva. “CCEP is going to make some version of this happen. We are calling it Project Mailbox.”

Broncos Care Basic Needs Program has agreed to house this project and the logistics are under review.

The CCEP will be hosting one more event The Physical Legacy of Racism: How Redlining Cemented the Modern Built Environment on May, 7 from 1 p.m. to 2:30 p.m. Interested students can RSVP to attend the event.


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