b'COMMUNITYThe State of Housingin Black AmericaBy NAREB but wealth is also found in the water we drink, the air we breathe and the land on W ASHINGTON, D.C.As the nationwhich we live, says NAREB struggles to dismantle the insti- PresidentLydiaPope.Itis tutional racism that has underminedthe sacred duty of commu-wealthgenerationinBlackfamilies,nityleaders,policymak-the National Association of Real Estateersandfinancialindustry Brokers(NAREB)todayreleaseditsspecialiststoliftcommu-2022 State of Housing in Black Americanitiessothatallchildren (SHIBA) Report.It provides a compre- canthriveandgrowup hensive analysis of Black homeowner- withopportunitiesforgood ship and the historic barriers Blackshealth,wealthandhappi-face when seeking to purchase a homeness in their lives.and gaining wealth. Moreover,thereport For the first time, the SHIBA report,states:Racehashistori-which was released at NAREBs annualcallybeenthemaindeter-Black Wealth Summit in Washington,minantoftheplacement D.C.,includesassessmentsoftheoftoxicfacilitiesinthe impact that natural disasters, climateUnited States. And decades change, toxic facilities and inland flood- ofredliningandsegrega-inghavehadonBlackfamilies.Thetion has ensured that Black report notes the devastation caused toinner-citycommunitiesare in places like New Orleans LA, Jacksonhometosomeofthemost MS and Flint MI. deterioratedinfrastructure We often think of wealth in termsin the nation. Black commu-of cash, investments and even Bitcoin,nities are on the front lines of climate change as a lack ofresourcesandoutdated housingstockandinfra- ingstrategiessuchashighoverdraft Enddiscriminatoryandabusive structuremakethemmorevulner- fees, debit card swipe fees, ATM with- appraisal practicesable to the adverse effects of extremedrawalfees,andwiretransferfees, weather and climate change. amongothercharges,haveparticu-Fixthebrokenandout-of-date The Black/WhiteThe 2022 SHIBA report outlines thelarlyimpactedlow-incomecustomershousing finance systemstatusofBlackhomeownershipandand customers of color.the broad challenges that Black fami-homeownershipliesandindividualsfacewhentheyThe report finds that 72% of BlackThereportcitesastudybythe seek to purchase a home, as well asapplicantsand63%ofWhiteappli- National Association of Realtors iden-cantsappliedforloansatindepen-disparity wasthe impact of new banking trends ondentmortgagecompaniesin2021.tifying millennials as the largest seg-their family financial security. mentofBlackhomebuyersinthe The report notes that traditional bankswake of the COVID-19 pandemic. The 23.8% in 1970.Inthefirstquarterof2022,thecontinued to disproportionately attracttrendcontinuedin2021,butdeclin-Blackhomeownershipratewas44.7White applicants: 33% of Whites soughting affordability likely contributed to a In 2022 the%, down from 45.3% in 2020. loansfrombanksin2021comparedslower growth rate of Black millennial TheBlack/Whitehomeownershipto 20% of Blacks. Further, the reporthomebuyerssinceSpring2021.The notes origination rates were higher at homeownershipdisparitywas23.8%in1970andindependent mortgage companies thanreport cites another issue that may be climbed to over 31 percentage pointsat banks for both Blacks and Whites.a drag on Black homeownership:by2019.In2022thehomeowner-gap is still anship gap is still an astounding 30%,In2021,denialratescontinuedBlackcollegegraduatemillennials havelessthanonetenththewealth thereportstates,continuingatwo- tobeloweratindependentmortgageoftheirWhitecounterparts.Further, astounding 30%decades trend of an expanding home- companies than at banks, the reportstudent loan debt represents a major ownershipgapbetweenBlacksandnotes.Disparitiesindenialsmir- challengeforBlackmillenniahome-Equally important,Whites. Equally important, the currentror those in loan origination rates asbuyers, as it can limit the amount of BlackhomeownershiprateremainsBlackapplicantsfaredmuchworsesavings that can be used for a down farbelowitspeakrecordedin2004, the current Blackwhen Black homeownership exceededthan White applicants across all lenderpayment. Black millennials owe more types.Blackapplicantshada20%in student loans and carry that debt 49 percent. denial rate at banks compared to 8%longer than other groups. And because homeownershipThe report also analyzes the recentamong White applicants. At indepen- Blackhouseholdshavelesswealth trend of non-deposit lenders, such asdent mortgage companies, denial ratesand fewer savings on average than the rate remains farFintechcompanies,increasingtheirwere13%forBlacksversus5%forgeneralpopulation,Blackmillennials marketshareofmortgages,andtheWhites. relylessontheirfamiliesfinancial below its peakimpactonotherbankrelatedfunc- ThisyearsSHIBAreportincludesresourceswhenpurchasingahome tions. sixrecommendationsoutliningwhatthan White millennials.recorded in 2004,Higher profit, more lucrative invest- Congress,regulatorsandtheprivateNAREBwasformedin1947to mentstrategiesforbankshascomesectormustenacttoimproveaccess to the American Dream of homeowner-when Blackattheexpenseofsupportinghome- ship: secure the right to equal housing ownership and wealth building in low- opportunitiesregardlessofrace, income communities and communities homeownershipofcolor,thereportstates.Federal Eliminateloanlevelpriceadjust- creed, or color. NAREB has advo-Reserve data indicate that in the thirdcated for legislation and support-ers edorinstigatedlegalchallenges exceeded 49quarter of 2021, residential real-estate Eliminatepenaltyfeesforbor- that ensure fair housing, sustain-loans hit a historic low as a percentagerowerstoaccessdownpaymentablehomeownership,andaccess percent. oftotalassets(10%)atU.S.banks,assistance tocreditforBlackAmericans. whereastheshareofsafeassetsSimultaneously, NAREB advocates investments such as cash, Treasuries, Recalculate the impact of studentfor and promotes access to busi-and government-guaranteed securitiesloan debt nessopportunitiesforBlackreal increasedfromtheprioryear.The Leveragespecialpurposecreditestate professionals in each of the closing of branches by larger banks inprograms real estate disciplines.low-income areas and profit-maximiz-10 DECEMBER 2022 BOCNEWS.com'