Undoing Structural Racism in Housing

BEDS clients mainly come from five townships: Berwyn, Lyons, Proviso, Stickney, and Worth. Twelve percent of their combined population is Black; forty-four percent of our clients from these areas are Black. This is not an accident.

Systemic racism has long denied Black people access to housing and creates the stark inequalities we see in our work.

Like many of our partner agencies and funders, we’re learning more about the historical forces that shaped our field. Race Forward President Glenn Harris defines systemic racism as "the complex interaction of culture, policy and institutions that holds in place the outcomes we see in our lives." We immediately recognize open racism—whether it’s people dropping racial slurs on message boards, employers refusing to hire Black people, or Jim Crow laws segregating communities. Systemic racism is more subtle but no less real. There’s not a single person, group, policy, institution, or culture at work. Rather, these entities, which form the backdrop to our daily lives, were consciously or unconsciously founded on racist ideologies, and their combined actions confirm the assumptions they embody.

We support housing policy changes to end structural racism.

Nonprofit Quarterly (NPQ) recently published Undoing Structural Racism: The Need for Systemic Change in Housing Policy, which outlines policy changes that would begin to resolve housing inequities. Senior Editor Steve Dubb observes that this includes “change...in realtor regulation, lending underwriting, credit scoring, loan pricing, bank regulation, the housing tax credit system, and special purpose credit programs,” which, at the risk of understatement, is an ambitious program. Potential solutions include:

  • Better Real Estate Monitoring: Sociologists Max Besbris, Jacob William Faber, and Elizabeth Korver-Glenn describe how “despite repeated, significant evidence of discriminatory practices, real estate agents—who participate in nearly 90 percent of residential property transactions in the US— have largely been asked to regulate themselves,” followed by an understated, “this has proven inadequate.” They suggest requiring real estate agents to report customer demographics, interactions, and lender referrals and outcomes—broadly akin to the requirements of the Home Mortgage Disclosure Act (HMDA) for financial institutions. Such reporting could identify areas needing reform and suggest appropriate industry practices and legislation.
  • Investing in Social Housing: The profit driven housing market disadvantages people making low incomes and Black, Latinx, and other traditionally marginalized racial/ethnic groups; cement segregation; and promotes gentrification. Social housing refers to “housing controlled by the public or nonprofit sectors or various forms of community ownership and control." Its continued construction can ensure housing access and maintain affordability.
  • Strategically Directing Affordable Housing Tax Credits: The Low-Income Housing Tax Credits (LIHTCs) program has driven most of the affordable housing development since 1987. It has been administered by the IRS, which does not seek to promote social or policy outcomes, and as a result, the LIHTC program has primarily led to development in lower income areas with lower property costs. A variety of law, regulation, and subsidy changes could align the LIHTC with larger social equity goals.
  • Alternatives to Credit Scores/Special Purpose Credit Programs: Credit scores rely on credit card and other credit line usage. People of color have long been targeted by predatory lenders who aggressively file claims for missing wildly inflated payments (payday loans can charge up to 400 percent APR). This further damages their credit scores and denies them access to mainstream credit lines. Potential alternatives include utility and rental payment and cash flow analyses to determine mainstream loan eligibility, as well as developing community bank Special Purpose Credit Programs (SPCPs) directed toward economically disadvantaged groups.
  • Community Reinvestment Act (CRA) Updates: The CRA tracks banks’ loans to low and moderate income (LMI) borrowers; however, it does not follow these borrowers and communities’ racial/ethnic demographics. As with the real estate industry, more closely following banks’ loans to economically disadvantaged racial/ethnic groups and communities will uncover opportunities for banking reforms.

BEDS offers compassionate, evidence-based services to people experiencing homelessness or imminent risk of homelessness of all races and ethnicities. You can support our work here.

by Grant Suhs
Communications Specialist