We know that rents are unaffordable. We know that homeownership is more accessible to white households than Black and other marginalized households of color. We know that homeownership disparities impact and perpetuate racial wealth disparities. A survey was taken of people with mortgages affected during covid-19. A majority of people surveyed expressed concern about their ability to cover their housing costs during the coronavirus outbreak.
72% of Blacks and 76% of Hispanics expressed concern that they will lose their housing if they don’t get additional assistance to help cover costs, compared to 43% of whites.
A new study led by a team of researchers from the University of Washington and University of California at Berkeley addresses the issue of whether and to what extent shared-equity homeownership under the CLT model creates wealth for its homeowners.
The research team employed the most rigorous method to date to quantify home equity gains for over 1,100 families who previously resided in shared-equity programs (the majority of which are community land trusts) and compared these gains to wealth accumulated by homeowners in market-rate homes and renters with similar demographic and economic status during the same period of time. The comparison was achieved using data from the HomeKeeper National Data Hub. HomeKeeper, a program of Grounded Solutions Network and Salesforce app, is a program management tool that not only facilitates daily operations for over a hundred shared equity homeownership and housing counseling programs, but also collects and aggregates critical information that allows performance monitoring and outcome evaluation.
The study finds that shared-equity homeowners experienced a median net home equity gain of $1,658 per year. This amount is substantially higher than the $100 in median annual wealth gain of similar renters. In addition, while it is less than the $2,080 in median annual housing wealth gain accumulated by similar owners, this discrepancy is not statistically different.
To put the finding into perspective, the estimated amount of housing wealth built by shared-equity families is more than 1.5 times the median net worth of renters ($6,000 as of 2019) and represents an amount sufficient to put a 5% down payment on a $200,000 house. The study demonstrates that shared equity homeownership programs can be an effective wealth-building tool, particularly among low- and moderate-income households who often have limited access to other homeownership opportunities.
It should be clear to you by now that the racial problems that have existed in the United States for centuries will not go away until Black people who have been most affected lead the charge to make necessary change happen. I have presented you with irrefutable facts about the history of the Community Land Trust model first built by Black people in rural Georgia. I have presented a compelling case for why Black-led CLTs are necessary in Black communities.
They are necessary because only enlightened and aware Black people have the strength, foresight, wisdom, and “skin in the game” to be committed to a life-long quest of building safe, affordable, and quality housing that will serve the needs of Black, Brown, and other People of Color for years to come.