Homeownership has long symbolized the “American Dream.” There is a widely held belief that once you achieve the status of homeowner, you have accomplished the first step towards building wealth. And yet in Chicago, we see that homeownership is vastly out of reach for much of the Black and Latinx population.
And there is evidence to affirm this belief.
Homeownership is the single largest source of household wealth in the Chicago region and serves as a critical pathway towards longer-term economic security. On average, homeownership represents 53 percent of household wealth for Black families and 39 percent for white families. In other words, for Black families, the majority of their wealth can be associated with real estate. At the same time, we know that families of color lack a diverse set of assets and therefore, any fluctuation within the housing market yields severe implications for their overall portfolio of wealth. In tandem with this reality is the fact that homeownership has been out of reach for Black and Latinx families and individuals for decades. It is challenging to sustain the asset as this population is most vulnerable to fluctuations of the housing market and victim to predatory practices at work within our economy. Chicago has the most significant gap (30 percent) in the nation between Black and white homeownership rates. Currently, the Black homeownership rate is the lowest of all racial groups at 41.8 percent, compared to 71.9 percent for white households.
And yet, there is opportunity.
It is estimated that if Black and Latinx households were as likely as white households to own homes, median Black household wealth would grow more than $32,000 and Latinx household wealth would grow more than $29,000.
The harsh realities of COVID-19 present us with not only challenges but a significant opportunity. We can take our learnings from the 2008 Great Recession and the insights gleaned during the foreclosure crisis to build momentum towards collective impact and sustainability. In fact, we can begin to support various pathways towards homeownership and homeownership models for families and individuals.
As an institution committed to seeing every Chicagoan thrive economically, this year, The Chicago Community Trust launched its Protecting & Advancing Equitable Homeownership initiative. The purpose of this grant making opportunity is to provide funding for housing organizations explicitly providing programmatic homeownership services and advancing systems changes that support safe and sustainable homeownership options and protections.
The Trust’s approach to homeownership, as part of its Growing Household Wealth strategy, is three-fold: create a pathway to homeownership by ensuring equitable access for Black and Latinx individuals and families, mitigate debt burdens while allowing existing homeowners to preserve and improve the quality of their assets, and maintain home value as a means to grow household wealth and prevent displacement. This framework has been primarily informed and supported by the Urban Institute’s Black Homeownership Gap Five-Point Strategy.
Over the next year, the organizations that received grants through the homeownership initiative will convene to develop solutions to support actual wealth-building homeownership strategies that specifically address the experiences of households of color. The work of these organizations includes bolstering housing supply and affordability, promoting homeownership policies, tackling displacement and gentrification in the local market, promoting alternative mechanisms for homeownership financing, and finding creative ways to reach mortgage-ready renters.
The Trust is proud to provide general operating support to the following organizations committed to Protecting and Advancing Equitable Homeownership:
Latin United Community Housing Association (LUCHA)
LUCHA will advance policies to preserve and create affordable housing; address affordability by preserving one to four-unit buildings through shared equity; promote access to down payment assistance; accelerate outreach and counseling for renters through financial education and homeownership preparation; and sustain homeownership through post-purchase counseling, affordable repair/renovation financing, and estate planning.
Chicago Area Fair Housing Alliance (CAFHA)
CAFHA seeks to repair the ongoing impacts of historic, government-sponsored wealth stripping in Black and Latinx communities by organizing impacted communities and advocating for housing policies and programs that promote and expand homeownership and intergenerational wealth-building. CAFHA will work with its Housing Choice Voucher Working Group and research national best practices regarding public housing authority homeownership programs, local program successes and constraints, and advocate with voucher holders to expand and improve homeownership programs.
Lawndale Christian Development Corporation (LCDC)
LCDC will work to address affordable housing needs in North Lawndale by providing housing development, homeownership education and housing renovation. The group will create a model for developing affordable ownership housing that can be expanded by other local developers and adapted in other communities.
Brighton Park Neighborhood Council (BPNC)
BPNC Financial Services Department will sustain and grow its pre-purchase, post-purchase, foreclosure prevention counseling, and case management services to low-income Latinx families. Brighton Park is experiencing a rise in unemployment and a decrease in homeownership. To reverse this trend, BPNC strives to provide one-on-one counseling to families and host workshops throughout 2020.
Neighborhood Housing Services Of Chicago (NHS)
NHS will launch its pre and post-purchase homeownership education and counseling program in conjunction with its financial security program to address the growing racial and ethnic wealth gap directly. Through the generational wealth-building tool of homeownership, NHS will support neighborhoods, especially communities of color, attain more significant development, investment, financial equity, and housing security that will breathe vibrancy and stability to low to moderate-income neighborhoods across Chicagoland.
Northwest Side Housing Center (NWSHC)
NWSHC will facilitate development without displacement by providing comprehensive HUD-certified housing counseling through its comprehensive Financial Opportunity Center for low-income Latinx community members of Belmont Cragin. The Financial Opportunity Center provides first-time homebuyer pre and post-counseling, land trust workshops, financial education and assistance, and employment assistance.
Spanish Coalition for Housing (SCH)
SCH provides bilingual (English and Spanish) comprehensive housing counseling, education and housing resources for Latinx households, as well as advocates for and proactively promotes additional support for these families. SCH will continue to enhance its financial education and coaching, pre-purchase, post-purchase, and foreclosure prevention programs. SCH looks to the use of technology for online counseling and education to benefit millennials and the community members who are unable to come to SCH offices.
DePaul University Institute for Housing Services (IHS)
DePaul’s Institute for Housing Services aims to develop applied research products and deliver technical assistance in support of policies and programs that advance and protect equitable homeownership. IHS will directly engage housing and community development stakeholders to understand critical questions, policy applications and data needs, develop new or update data indicators to respond best to needs, and provide technical assistance to stakeholders using this information in their work.
Housing Action Illinois (HAI)
HAI will advocate for policies to create and preserve homeownership opportunities in Black and Latinx communities suffering from a lack of private lending, relatively low property values, and high property tax burdens. HAI will also focus resources on preserving homeownership among long-time Latinx and Black residents in communities experiencing gentrification, displacement, and rapidly increasing property values.