Trying to Erase the Red Line: National Lessons from a New York Homeowner Policy
February 16, 2022
By Naomi Zewde, Raz Edwards, Erinn Bacchus
Most household wealth (particularly for low- and middle-income Americans) is held in home equity. Federal policies during the early 20th century helped open new avenues to homeownership for middle-class Americans—but these policies were explicitly racially exclusionary, employing a system of “redlining” to delineate the desirability of neighborhoods based on their racial makeup. Though the overtly racist policy of redlining officially ended with the Fair Housing Act of 1968, real estate segregation has persisted and continues today.
The authors highlight three key lessons for anti-racist home financing policies moving forward:
- Programs intended to expand homeownership cannot expect buyers to already have large financial assets—a practice that excludes Black households;
- Policies should consider the limited ability of low- and middle- income households to pay for repairs and improvements to their homes, and financing schemes for both initial purchase and physical home improvements should be tailored to family budgets; and
- Housing in most US cities needs to be improved to address and adapt to climate change, requiring subsidies and other publicly funded strategies.