Bloomberg, August 12, 2019: For black Americans, the housing crisis isn’t over
Here’s one way the 2008 financial crisis is still very much with us: For black Americans, homeownership is more out of reach than it has been in almost six decades. And so far, there’s no recovery in sight.
Owning a home has long been a challenge for black families in the U.S. Generation after generation, institutional racism has made them targets for financial predation. In the middle of the 20th century, when the government effectively refused mortgage credit to black people, this took the form of contract-for-deed, a sort of rent-to-own arrangement that entailed all the burdens and none of the benefits of ownership. It later evolved into other schemes, such as the Federal Housing Administration machinations of the 1970s, in which an ill-designed federal loan program allowed speculators — sometimes with the help of corrupt government officials — to sell inner-city homes to black buyers at astronomical prices. The result: foreclosures, blighted neighborhoods and a persistent wealth gap between blacks and whites.