Breaking news and resources from across the industry.

Closing the Homeownership Gap

Posted on Oct 20, 2022 in:
  • Master Builder magazine

By MBAKS Content Strategist James Slone

The Black Homeownership Initiative is working to close the homeownership gap.

Young Black family sharing a meal

In 2021, the Coalition for More Housing Choices joined a network of associations and organizations to launch the Black Homeownership Initiative with the goal of closing the gap between Black and white homeownership rates in Washington state.

The Coalition—representing a spectrum of nonprofit, business, civic, and labor organizations, including MBAKS— came together to develop a plan to build enough homes to accommodate regional growth in a way that “benefits current residents” and offers affordable housing choices.

The Black Homeownership Initiative was a natural outgrowth of the Coalition’s approach to housing with its strong focus on equity, seeking to align “infrastructure development, housing production and preservation, and underwriting and lending” to double the Black homeownership rate in the state.

They have their work cut out for them.

Mind the Gap

A history of exclusionary housing policies has meant that people of color and other minorities have been denied the financial equity, stability, and peace of mind that comes with homeownership—the basic building block of the American dream. The Black community has been especially impacted.

According to the Urban Institute, Black homeownership in the U.S. has not increased since the 1960s. Indeed, it’s actually declined 5% since 2011 versus just 1% of white households. These days, affordable housing is scarce for everyone, but for Black households, it’s even more elusive.

The situation is especially dire here in our own backyard. The Seattle Times recently reported that just 34% of Black people statewide own homes (compared to 68% of whites). In Seattle, it’s an abysmal 26%.

It is hardly surprising to learn that the median net worth of Black households in Seattle is just $23,000, compared to $456,000 for white households. Economic inequality means Black households are likelier than whites to spend more than half their income on rent and debt (e.g., student loans).

And even when they can save, their chances of being denied a home loan are much greater. An analysis by Zillow found that Black applicants were denied mortgages at a rate 84% higher than white applicants in 2020.

How did it come to this?

Racism’s Self-Fulfilling Prophecy

Black and other non-white people were kept out of most Seattle neighborhoods in the early twentieth century through zoning and racially restrictive housing covenants. While the U.S. Supreme Court struck down the covenants in 1948, lenders and real estate companies continued to discriminate through “redlining,” a practice of designating communities of color “high risk of default.”

Redlined maps determined which neighborhoods received favorable mortgages, interest rates, and refinancing. The result? Homes in Black communities hemorrhaged value, decent loans became hard to come by, and predatory loans led to defaults. The stigma of redlining also led to a loss of jobs, resources, and investment in these communities as capital—and white residents—fled to the suburbs.

The 1968 Fair Housing Act made racial discrimination illegal, but the resulting gap persists—Black households have less intergenerational wealth to pass on or equity to invest in new housing. While gentrification displaces Black residents, single-family zoning means that more affordable types of housing cannot be built in threequarters of Seattle neighborhoods.

(See “Codifying Prejudice” in the fall 2020 issue of Master Builder.)

Black couple in front of their home

Mending the Gap

There are signs that things are changing. Perhaps the most prominent recent example is the Africatown Community Land Trust, which has created affordable housing and cultural spaces in the Central District to mitigate the effects of gentrification and underinvestment in the historic Black community. Another recent initiative spearheaded by the Seattle Foundation’s Civic Commons seeks to help 1,500 Black households become homeowners across the Puget Sound over the next five years.

MBAKS supports the Black Homeownership Initiative because closing the gap is a crucial part of solving the housing crisis in the Puget Sound region—which will need to accommodate 60,000 new residents a year—and because it’s the right thing to do.

The Housing Development Consortium (HDC), which encompasses all major nonprofit housing developers in King County, is a leading partner of the Initiative as part of its mission to “ensure that all people live with dignity in safe, healthy, and affordable homes within communities of opportunity.”

Patience Malaba, executive director of HDC, laid out the stakes last June. “We have decades of racial injustice and economic inequality that has consistently, persistently led to disparities in wealth, specifically for BIPOC [Black, Indigenous, and People of Color] communities and disproportionately for Black households. One of the foundational steps in America to build wealth is homeownership.”

MBAKS’ Senior Policy Analyst, Allison Butcher, agrees. “The association recognizes the need to address race-based housing policies of the past to create a more inclusive future for our region. Part of the solution is creating more attainable housing choices for more people close to jobs, transit, schools, healthcare, and other amenities.”

The Initiative’s plan includes seven interrelated strategies to bolster Black ownership. These include marketing and outreach, pre- and post-purchase counseling, purchase supports and tools, changes in policies and practices, support for existing Black homeowners, and housing production to increase affordable homes.

MBAKS’ role, says Butcher, is “advocacy to enable more infill and more affordable ‘missing middle’ housing.” MBAKS sees increasing housing supply of all types as a key strategy to lowering home prices and barrier of entry for Black households.

Housing development close to Link light rail transit stop. Photo: Heiser Media

Only the Beginning

The Initiative is off to a great start, but there’s still much to be done.

Currently most of the focus is on increasing the supply of and access to affordable homeownership. Looking toward the future, Initiative partners and the HDC hope to develop a policy framework that can be used to monitor and evaluate their collective efforts to increase homeownership opportunities.

Meanwhile, a Washington State Department of Commerceled Homeownership Disparities Work Group has developed recommendations for reducing the gap for BIPOC communities that intersects with the Initiative’s work. The report includes specific statewide recommendations that could be actionable in late 2022 or during the 2023 legislative session, creating additional momentum.

These are heartening developments. Solving the ownership gap means ensuring that everyone can find a home of their own. But to be lasting, it must go beyond up-zoning and legalizing more housing types.

It requires acknowledging the long history of racial discrimination that has narrowed homeownership options for Black people and actively working to overcome its grim legacies. Acknowledging that the gap exists—and why it exists—is an important step.


Help us build a sound future.