Black Americans face unequal access to home ownership; Two Wisconsin cities are turning to co-ops for a solution

Closeup of a key in the door of a new home. Interior of home is seen in the background.
Buying a home is a key element of building wealth, but discriminatory housing practices have kept homeownership out of reach for many Black Americans.

The housing crisis in the United States is not new. Millions of Americans struggle to pay rent each month, and homeownership is far out of reach for many. Policymakers have often looked at homeownership as a critical tool to help families build wealth and get ahead, but they have not made opportunities for homeownership equitable across races.

Although the Jim Crow Era is often talked about as if it is the distant past, it was only in 1964 with the passage of the Civil Rights Act that these practices were brought to a legal end—and many discriminatory practices that skirt the laws still remain. America’s housing crisis—which has only compounded during the COVID-19 pandemic—is the consequence of a confluence of factors, including a history of discriminatory housing practices against Black Americans and, by keeping homeownership out of reach, a disproportionate level of poverty among Black Americans.

A 2017 report showed that 45 percent of Black Americans have experienced racial discrimination when renting or buying a home—more than 14 percent higher than Latinos, the next highest group reporting, and nine times higher than white respondents. This discrimination comes in many forms, from not being offered to see available rental units or properties available for purchase to requiring higher rents or interest rates on mortgages. Many of these practices prevent Black people from accessing housing altogether—with Black homelessness accounting for an alarming 40 percent of individuals experiencing homeless and 50 percent of homeless families with children. Among renters, approximately 55 percent of all Black renters are defined as rent-burdened—spending 30 percent or more of their income on housing.

According to the United States Census Bureau, the 19 percent poverty rate for Black Americans remains the highest among any group in the country. In comparison, the poverty rate of white Americans is 7.3 percent. While Black Americans represent 13 percent of the total U.S. population, they account for nearly 24 percent of the poverty population.

As we reflect upon our nation’s past responses to economic downturns, we should recognize the compounding effects that Black Americans have experienced from being paid less for their work, locked out of opportunities to homeownership, or pushed out of neighborhoods by ‘revitalization’ efforts that led to gentrification. We should also implement tools that promote asset-building, equity and autonomy. Cooperatives are an important tool in achieving these goals.

As we reflect upon our nation’s past responses to economic downturns, we should recognize the compounding effects that Black Americans have experienced from being paid less for their work, locked out of opportunities to homeownership, or pushed out of neighborhoods by ‘revitalization’ efforts that led to gentrification.

In recent weeks, two Wisconsin cities—Milwaukee and Madison—have announced they are turning to co-ops for a sustainable solution to address housing challenges.

Last fall, Milwaukee Mayor Tom Barrett announced that his 2021 budget proposal would include $3 million to invest in housing cooperatives, as part of a larger investment around increasing affordable housing stock and homeownership opportunity in the city for Black Milwaukeeans.

“Particularly in this time of social unrest and a fight for racial justice and racial equity, we thought that this is the perfect time to really make a bold statement about our commitment to housing in Milwaukee,” Barrett told the Milwaukee Journal Sentinel, “And we’re doing this in what is without a doubt the most challenging budget that we have faced in years.”

Specifically, the Mayor’s proposal would invest $1.5 million in a pilot program using housing cooperatives and community land trusts to combat gentrification.

In Milwaukee, Black renters are more than twice as likely to be rent burdened than white renters. Moreover, Milwaukee has among the lowest rates of Black homeownership in the United States in metropolitan areas.

Mayor Barrett also noted that the investment is coming at a time when the city is facing a very tight budget environment, with revenues down due to impacts of the COVID-19 pandemic. Housing co-ops, paired with community land trusts, are proven to expand access to affordable housing and contribute to the economic well-being of the co-op’s member-owners and the community.

[Read more about housing cooperative impact]

About 80 miles west, the city of Madison is making investments and reforms to support the development and growth of housing cooperatives. The city is utilizing its Affordable Housing Fund to support housing cooperatives, expand homeownership, preserve and improve affordable housing, and promote land purchases to preserve affordability.

Madison’s Mayor Satya Rhodes-Conway said that using these funds creates a “broader array of tools” to address housing challenges in the city. Director of Development James O’Keefe said that this local investment empowers smaller non-profits that may have more of a challenge accessing federal funding. Specifically, O’Keefe said that “because of the flexibility of the Affordable Housing Fund, some funds may also be used to finance housing services proposals that will help increase homeownership opportunities for low- and moderate-income individuals and persons of color.”

Housing cooperatives have a track record of success. New York City continues to have the largest concentration of housing cooperatives in the country. According to the Urban Homesteading Assistance Board, the majority of limited equity housing co-op boards are led by women, people of color and immigrants. Limited equity housing co-ops establish in their bylaws a maximum resale price for co-op units to maintain affordability. These co-ops often have low barriers to entry and low vacancy rates. In addition to the opportunity to build wealth, control the cost of housing and govern the building operations, housing cooperatives can also provide stability to families, allowing children to stay in the same school districts throughout their educational careers and promoting investments to community-driven prosperity.

Cities across the nation facing similar challenges of funding shortfalls and a lack of affordable housing should consider similar investments in cooperatives to support an equitable recovery from the pandemic and promote resilient, sustainable economic growth going forward.

[Learn more about Policy Strategies to Build a More Inclusive Economy with Cooperatives]


—Kate Latour is NCBA CLUSA’s Director of Government Relations

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