Two experts clarified historic discrimination at NAR’s convention, saying homeownership helps “launch the next generation,” and many young Black adults lost that edge.
SAN DIEGO, California – The real estate industry has helped Americans build wealth through homeownership, but for much of the 20th century, many African Americans have been excluded an opportunity to build intergenerational wealth, according to a conversation with two experts featured at the 2021 Realtors® Conference & Expo.
Historian Beryl Satter explained how the exploitation played out in mid-twentieth century Chicago. Her father, a Jewish attorney, owned rental properties and also defended Black clients who were targeted by unscrupulous real estate operators.
“You sell people the single most important thing they will ever purchase,” she told Realtors attending the discussion. “You, therefore, create communities. Those homes help launch the next generation, whether that be through appreciation of the property or passing down the property to a child.”
In 1950s Chicago, Black residents were confined to an area called the “Black Belt.” As their population tripled due to the second Great Migration during World War II, the area became severely overcrowded. But Black people were barred from moving to other neighborhoods due to racially restrictive covenants and other real estate practices. Banks refused to make loans to Black families for new, inexpensive homes being built in the suburbs.
Denied access to the credit market, unscrupulous real estate operators preyed upon Black families by selling them homes using installment contracts at double or triple the price of the property’s worth. Families would be responsible for taxes, insurance and upkeep, but would gain no equity, and the seller held the deed. Many times, the seller later added impossible charges, and the Black family would be evicted, losing all the money they had put in.
Those practices drained and estimated three to four billion dollars from Black Chicagoans from the 1950s to the 1970s.
“To create real change, we need to understand the past and articulate it,” said Satter. “Predatory sales to Black buyers have happened over and over. Since the subprime crisis, it went back to the same cycle. Instead of allowing history to repeat itself, we must establish good credit practices, help and support communities – not feed on the population.”
Mabél Guzmán has been a Chicago Realtor for more than 21 years and served as the 2020 vice president of association affairs of the National Association of Realtors (NAR). She and Satter participated in a conversation moderated by Bryan Greene, NAR vice president of policy advocacy.
The three discussed the importance of understanding history in order to frame solutions.
“Disadvantage builds on disadvantage – we need to understand the problems to fix them,” said Satter.
“We need to dissect how the system is set up currently,” added Guzmán. “We need to audit FHA, Fannie, Freddie, to see what needs to be corrected and what has been done. Open discussions on how to rebuild these communities is essential … reinvesting in the community, bringing businesses in, building affordable housing. When we say fair housing for all – we mean it.
“As Realtors, we need to be true advocates and ask the hard questions,” says Guzmán.
© 2021 Florida Realtors®
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Author: kerrys