Groups issue challenge to dismantle devaluation of homes in Black communities
8th November 2021 · 0 Comments
By C.C. Campbell-Rock
Contributing Writer
“Racist housing policies have segregated neighborhoods, devalued lives, and eroded equal justice under the law – a foundational ideal on which our democracy rests,” Andre M. Perry and Stuart Yasgur write in “Dismantling White Privilege Starts with Undoing Racist Housing Policies,” in The Avenue.
The authors write that the consequences of the country’s history of white privilege are a threat to democracy itself and that “white privilege is enabled by biased policies that must be removed and replaced.”
“Homes are valuable because they are financial assets. Homeownership is the main driver of wealth in the U.S. When the market devalues homes in Black-majority neighborhoods by 23%, the market is taking $156 billion of wealth away from homeowners in those neighborhoods,” they write.
Yasgur is the V.P. & Global Leadership Group Member at Ashoka, where he focuses on social innovations that use market forces to address social challenges at a large scale. Ashoka is the main sponsor of the Valuing Homes in Black Community Challenge.
Perry, a senior fellow at the Brookings Institute’s Metropolitan Policy Program, scholar-in-residence at American University, and columnist for the Hechinger, wrote “Know Your Price: Valuing Black Lives and Property in America’s Black Cities.”
In his book, Perry writes, “Racism contributes to the devaluation of assets, including homes, in majority-Black cities.” Perry also co-authored the Brookings Institution report, “The Devaluation of Assets in Black Neighborhoods,” and presented its findings to the U.S. House Financial Services Committee.
Not only are homes in Black communities devalued, but Black homeownership is decreasing. In 2019, the Wall Street Journal reported, “The black homeownership rate has fallen 8.6 percentage points since its peak in 2004, hitting its lowest level on record in the first quarter of this year, according to census data.”
To flip the housing market and related institutions from the current practices of redlining, gentrification in Black communities, and devaluing homes owned by Black people, Perry and Yasgur launched the Valuing Homes in Black Communities Challenge last month.
The Challenge is Asohka’s Economic Architectural Program aimed at creating a new generation of structural innovations to address racism in housing markets.
“We invite innovators to participate in a collaborative challenge, which will award up to $1 million in prize money,” the funders announced.
The application period ends on January 13, 2022, and winners will be announced on April 20, 2022.
Reviewers will look for structural innovations and direct services that can change the strategic landscape for participants in the market.
“This change leads market participants to adapt their strategies and ultimately change their behaviors. In aggregate, these changes in behavior change the impact of the market,” according to the program summary.
Examples of direct services with structural innovations include:
• Small-dollar mortgages for prospective homeowners and creating a secondary market, so financial institutions compete to offer small-dollar mortgages to prospective homeowners;
• Assisting homeowners with appraisal appeals and creating a certification system to ensure appraisal management companies proactively identify appraisals that devalue homes in Black-majority neighborhoods; and
• Work with residents to avoid eviction while experiencing a financial emergency and create a stakeholder-funded insurance product to enable residents to deal with economic crises and prevent displacement.
Reviewers will also look for market-based and policy-based innovations introduced and carried out by market participants. Possible examples of market-based innovations include:
• A new type of mortgage product to finance the purchase of owner-occupied rentals;
• Alternative credit rating service that more accurately reflects a prospective borrower’s creditworthiness; and
• A model for collectively developing mixed-income neighborhoods.
Possible examples of policy-based innovations include:
• Legal standards for land contracts;
• Real estate tax reduction for properties held by community land trusts; and
• Removal of single-family home zoning restrictions.
To learn more, visit www.challenge.economicarchitectureproject.org/challenge-terms.
Interested applicants can join The Challenge online at www.challenges.changemakers.com/challenge/valuing-homes-in-black-communities.
This article originally published in the November 8, 2021 print edition of The Louisiana Weekly newspaper.
