Black homeownership has declined across the Bay Area, furthering inequality
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Since pulling herself out of homelessness a decade ago, Nadia Johnson has worked tirelessly to achieve what no one else in her family has accomplished: owning a home in the Bay Area.
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Johnson, a manager at a local Starbucks, and her husband Andre, a driver for a private bus service, now rent a two-bedroom duplex in the Contra Costa County suburb of Rodeo with their 13-year-old daughter, Raiena.
The couple has been saving to buy a house of their own in the working-class community known for its sprawling Phillips 66 oil refinery. But their modest incomes make it nearly impossible to qualify for a mortgage, even in one of the more affordable parts of the increasingly unaffordable Bay Area.
“We’re trying to own a little piece of Rodeo, just a little bitty piece,” said Johnson, 48. “I just want to be able to leave something to my grandchildren.”
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Buying a home, a crucial steppingstone to wealth that can be passed down over generations, has long been a struggle for Black families like Johnson’s, who are left to cope with the lasting impacts of the Bay Area’s historic housing discrimination — including racist lending practices and property agreements. But as local real estate prices have soared over the past two decades, homeownership has gotten even more out of reach for many Black residents, furthering deep-rooted economic disparities.
In 2019, just 34% of Black households in the nine-county Bay Area owned their homes, down from 41% in 2000, according to researchers with the Bay Area Equity Atlas. White homeownership, meanwhile, dipped by only a percentage point to 63%. Black residents make up about 6% of the region’s population. White residents make up roughly 40%.
The homeownership gap widened in all nine Bay Area counties between 2000 and 2021, according to a Bay Area News Group analysis of census data. Black households consistently had among the very lowest homeownership rates of any racial group.
The benefits afforded to homeowners — including home equity, tax breaks and access to good schools — can exacerbate “inequality when they’re not shared across the population,” said Carolina Reid, a housing researcher with UC Berkeley. According to the U.S. Census Bureau, the nationwide homeownership gap is one of the main reasons Black households have less than one-tenth the wealth of white households. Local data was not available.
In the Bay Area — where the median single-family house price now tops $1 million — barriers to homeownership have prompted many families to move from historically Black neighborhoods in cities such as Oakland and East Palo Alto to far-flung parts of the region and state, boosting commute times and pulling them away from friends and relatives.
Between 1990 and 2018, the Black population dropped 40% to roughly 97,000 in Oakland, while soaring more than 1,000% to nearly 23,000 in Antioch on the northern edge of Contra Costa County and 5,000% to over 18,300 in Elk Grove outside Sacramento, according to an analysis by news publication CalMatters.
Alameda County, home to the Bay Area’s largest Black population, saw the gap between Black and white homeownership increase by 4% between 2000 and 2021, according to the Bay Area News Group analysis. The homeownership rate among the county’s Black residents, who were hit hard by the late 2000s foreclosure crisis, dropped from 36% to 31%. White homeownership dipped from 62% to 61%.
Santa Clara County, meanwhile, saw the largest widening of the homeownership gap in the Bay Area. Black homeownership cratered from 40% to 26%, while White homeownership dipped from 65% to 63%. The steep spike in the homeownership gap could be because home prices in Silicon Valley soared higher than most everywhere else in the region, Reid said.
Experts agree the glaring imbalance can be traced back to racist local, state and federal housing policies that lasted well into the 1960s.
Reid pointed to redlining, the process by which the federal government effectively denied home loans to minority communities, and racially restrictive covenants, which prohibited people of color from owning properties throughout the Bay Area and across the country.
Such practices excluded entire communities from the housing market, which prevented many Black families from amassing generational wealth and moving to areas with more opportunity, reflected in patterns of segregation that persist today.
“Without more intentional policies to undo the legacy of discrimination, we’re never going to get to equity or parity in closing that racial homeownership gap,” Reid said. She called for reforms to “eliminate bias that continues to exist in financial and housing market systems.”
Just last month, a Marin City couple reached an out-of-court settlement with a real estate appraiser they alleged undervalued their house because they are Black. And earlier this year, the U.S. Department of Justice announced a $31 million settlement with a Los Angeles-based bank accused of redlining.
Montana Gabrielle Hooks, a Black real estate agent in Oakland, said it’s not uncommon for Black homebuyers to remove family photos or African American art to avoid appraiser discrimination.
“It’s a known, unspoken fact that Black homeowners that are going through the appraisal process are aware of,” Hooks said.
To combat that discrimination, Hooks works with Oakland’s Young Realtist Division, a group that teaches students about homeownership and pursuing a career as a real estate agent. “If more of us are Black, then we will be able to reduce some of that racism that Black homebuyers and Black homeowners feel.”
In recent years, local governments and nonprofits have also started efforts to help Black homebuyers cover down payments and closing costs. State officials are pushing cities to build more affordable homes. And a state Reparations Task Force is considering payments of up to $360,000 to many Black Californians, partly as compensation for past housing discrimination.
Such a payment could make all the difference in helping Johnson and her husband buy a home.
She’s proud of how far they have come since escaping homelessness. The couple now has 13 years in recovery from addiction, steady jobs and two cars. But long working hours are taking a toll on their health, and Johnson’s worried they may run out of time to buy before retirement. Still, she remains confident they’ll find a home that can stay in their family for years.
“I know if I work hard enough, it can be done,” Johnson said. “I’m going to keep trying until somebody tells me yes.”
Harriet Blair Rowan contributed to this report.
The proposed $800 billion number to compensate Black residents of California for generations of over-policing, disproportionate incarceration and housing discrimination, comes from a consulting team of five economists and policy experts.
How the US compares to other countries on policies that could mitigate homelessness
How the US compares to other countries on policies that could mitigate homelessness
In late February 2023, the Department of Housing and Urban Development announced it was allocating $5.6 billion in grants to finance community programs, including affordable housing development plans and assistance for people experiencing homelessness or who are at risk. The grants benefit all 50 states, the District of Columbia, and the five U.S. nonstate territories.
According to HUD, the Biden administration has exceeded its annual goals for mitigating homelessness by 25% until 2025, an ambitious objective outlined in the federal strategic plan launched in December 2022.
Despite the government’s efforts, the U.S. does not consistently rank well compared to other member nations of the Organization for Economic Cooperation and Development regarding policies to resolve homelessness, particularly when measured against countries of comparable economic stature.
The problems, though similar, differ widely among nations due to population, public policy, geographical and weather conditions, income inequality, and health care systems. The same applies among the states; two densely populated states, New York and California, rank alongside one of the least populous states, Hawaii, making up the top three states in people experiencing homelessness. In 2020, they were the only three states with more than 40 people without homes out of every 10,000 inhabitants. The homelessness rate in D.C. far surpasses that oven even the worst-off states, with more than 90 people in 10,000 without a home.
The COVID-19 pandemic slowed down the already lethargic progress of the U.S. in addressing the homelessness crisis, though it is still uncertain how much the pandemic truly affected the situation.
While Congress, HUD, and local governments handed over billions of dollars in emergency aid to properly quarantine and protect the unsheltered, even demanding that hotels provide temporary accommodation for hundreds of persons, data gathering became a distinct challenge. Eviction prompted by rental nonpayment was halted thanks to policies such as the federal eviction moratorium and parallel programs at local levels, yet any change in the number of unsheltered homeless remains nebulous due to insufficient data gathering and the general difficulty in tracking individuals with no constant point of origin.
Experts agree on one thing: The pandemic exposed the brittleness of existing sheltering resources and the long road ahead toward finding a lasting comprehensive solution. The aim is to provide not only affordable housing, but also sustainable answers to the many factors that force people into homelessness, including social reintegration programs, mental health care, substance abuse treatments, and a safe haven for domestic violence victims.
Foothold Technology cited data from OECD to visualize how U.S. housing stock and policies compare to other countries and what that means for reducing rates of homelessness.
The relative dearth of US housing stock is a primary impediment to aiding the unsheltered homeless
The number of dwellings—rooms or groups of rooms intended for habitation—per 1,000 inhabitants determines the adequacy of the housing stock or available structures built for private habitation in a country.
OECD statistics show that Western Europe is well ahead of the United States in housing stock, as are Japan and Canada. Turkey was also better off than the U.S. until the earthquake that struck the country on Feb. 6, 2023, along with its aftershocks, destroyed roughly half a million apartments, driving the country into a severe homelessness crisis.
The disaster proved that adequate housing means not only shelter, privacy, and comfort, but also the need to enforce construction regulations that ensure the safety and protection of people even under the most dangerous and unforeseen circumstances.
America has traditionally been a house-centric society, which presents a distinct hurdle to advancing the housing of the homeless
Walk around the center of Rome, Paris, or Madrid, and you will find clothing stores or restaurants on the ground level of apartment buildings. European cities built 1,000 years ago or more have progressively adapted their living conditions and zoning regulations to modern times.
The opposite happened in younger (and geographically larger) countries such as the United States and Canada.
Zoning in the U.S. is typically determined and implemented at the state and local government levels. Safety, convenience, and practicality are among the considerations when a plot of land is zoned for development. Still, single-family homes tend to win out as a means of sustaining existing home values. They also perpetuate the American tradition of the neighborhood versus mixed-housing developments that place detached homes and multi-unit structures like apartment buildings in the same development location.
In most American cities, residential, commercial, and industrial areas are defined during the urban planning phase. Therefore, zoning regulations become rigid as these varying forms of structural developments are determined.
Apartments, flats, condos, studios, or lofts in large multi-unit buildings are the reigning housing type in several century-old and high-density European and Asian cities with limited empty land to grow, particularly in national capitals or industrial hubs. Some cities in the U.S. have begun to turn away from the traditional focus on single-family homebuilding and toward other housing forms.
The US lags behind most other developed nations in public housing
The countries of the European Union differ significantly when comparing their social (read: government-subsidized) housing programs.
Austria is one of the OECD countries with a high rate of social housing. It has succeeded not only in providing lower- and middle-income citizens with affordable living options, but managed to incorporate these subsidized dwellings into community development without the stigma they are viewed with and the implicit segregation they are exposed to in the U.S.
In Germany, on the other hand, the government leans toward subsidizing renters over owners, despite the fact that most multi-unit structures are owned by private landlords and not the government itself.
People living in OECD countries must meet specific criteria to qualify for social rental housing. Families with children and seniors usually have priority over single adults. Income also plays a role as the dwellings are not allocated through regular market mechanisms. In Europe, some countries have housing programs for college students, recent graduates, and young couples aimed to help them jump-start their life without extra burdens.
In the U.S., public housing has become synonymous with “affordable housing,” a term that often functions more as a political signifier than a viable mode of residential development. There are, however, states in the U.S. that have begun to make progressive strides toward increasing the availability of public housing and, in turn, divorcing it from the stigma of being a blight on community development.
In June 2022, the Rhode Island legislature approved a $10 million pilot program that will build affordable housing units across the state, and Colorado passed a bill to create a housing authority that will create thousands of housing units devoted to middle-income families.
Overburdened housing costs create inequity for low-income residents
According to the U.S. Interagency Council on Homelessness, stable, adequate, and affordable living conditions provide people with a “platform for improved outcomes around employment, health, and education.” And yet in the U.S., low-income people spend nearly half of their income on rent or mortgage. This has become a deepening problem over the past year, as wages have failed to keep up with inflation, which has reached historic levels.
Moreover, in an effort to curb inflation, the Federal Reserve raised interest rates seven times in 2022, with further increases coming in 2023. Higher interest rates have made home financing more difficult for lower-income families and increased the burden on renters, as higher rates have increased the cost of borrowing on landlords and property developers.
One of the most concerning effects of homelessness relates to the young. Children and teenagers who experience homelessness are more susceptible to developing mental health problems and dropping out of school, which jeopardizes their chances of eventually prevailing in the labor market.
Another factor contributing to unaffordability in urban housing is gentrification, as exemplified by the ongoing situation in San Diego, where traditionally working-class neighborhoods have become unaffordable to most residents—especially senior citizens, and in some cases forced them into homelessness.
Cities like San Francisco, New York, and Chicago all face similar problems.
This story originally appeared on Foothold Technology and was produced and distributed in partnership with Stacker Studio.
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