These days news sources are filled with stories about what can be done to generate wealth and eliminate racial inequities. Affordable home ownership is essential to building wealth and closing racial gaps. We tried years ago to create more funding for entry-level, affordable homes, but had little success.
Unfortunately, it looks like things haven’t changed in the past two decades. The entrenched “affordable housing industries” and The State Bank (dba Minnesota Housing Finance Agency) continue to act as if more rental housing will close the racial disparities gap. What we needed then, and need now, is for Minnesota Housing to invest more of its resources in new entry-level, affordable homes across the state.
As legislators, we continually prodded Minnesota Housing to fund the work of land trusts and community-based housing developers. It is quite frustrating that today the homeownership gap between white Minnesotans and people of color is 33 percentage points. That’s larger than when we served in the Legislature.
It is embarrassing that Minnesota Housing has in recent years allocated as little as 4% of its resources to support the construction of affordable homes. That means fewer than 100 new units a year get built. At this rate we’ll never close the racial disparities gap in homeownership.
It was just last year that the People of Color and Indigenous legislative caucus pushed to authorize housing infrastructure bonds to support homeownership construction. Those legislators were successful even with strong opposition from advocates and Minnesota Housing. This opposition is like the howl we heard years ago working with community activists to redirect some funds from rental housing to ownership.
We applaud the work of Home Ownership Minnesota (HOM). It’s essential HOM and other groups keep pushing policymakers to support the construction of new, affordable entry-level homes. If HOM had been around when we were in the Legislature the gap may have closed by now. The proposals that put growth in some housing related tax revenue and/or appropriations into the Workforce and Affordable Homeownership Development Program are wise.
We are confident that HOM members would agree that it is time to look at the institutional bias that exists within the banking industry. We’d suggest The State’s Bank, Minnesota Housing, should be scrutinized first. The status quo leaves more than 64,000 qualified households of color across the state renting rather than owning.
Right now, public and private organizations are taking a close look at bias and institutional racism. Start with a simple question: “Who is included, who is excluded by this decision?” Our experience over the decades tells us that once The Bank honestly answers that question, entry-level affordable homes will become a higher priority.
It’s unacceptable that policy decisions by a state agency force families to live in subsidized rental housing when we have the ability to help those families buy a home. Minnesota Housing has the power to help these families buy an affordable home. Building affordable homes not only opens up thousands of rental units for people who really need it, but also provides low-income families a way to generate wealth. It’s one way this state can make progress on its embarrassing racial inequities.