Introduction 

Black homeownership matters.

Owning a home is the primary way that most families build wealth. But from its founding as a colony, New Jersey designed a racialized system that incentivized land ownership by white people for white people while simultaneously separating Black people from homeownership, and by extension, wealth.¹

Today, just 38.4% of Black New Jersey households own homes compared to 75.9% of white New Jersey households.² In addition, Black families that do own homes enjoy significantly fewer financial benefits from their investment than their white peers do.

This homeownership divide has contributed substantially to New Jersey having one of the starkest racial wealth gaps in the nation, with its white families holding $322,500 at the median compared to only $17,700 for the state’s Black families.³

As examined in the Institute’s report Making the Two New Jerseys One: Closing the $300,000 Racial Wealth Gap in the Garden State, today’s racial gaps in wealth and homeownership started with slavery and continued with generations of policies that prevented Black New Jerseyans from full social, political and economic participation in the state.⁴ Early racial restrictions on building wealth through property ownership were exacerbated over generations for Black New Jerseyans through racially restrictive covenants, redlining, exclusion from the GI Bill and predatory lending during the Great Recession.⁵ Thus, for generations, policies and practices, by design, have resulted in today’s stark racial disparities in homeownership and wealth.

The COVID-19 pandemic has further intensified the racial and economic disparities that have been built into New Jersey’s foundation; thus, it created an urgent need to design a new system of policy reforms that repair both past and ongoing harm from racial discrimination and promote racial equity in housing and equitable access to homeownership.⁶ As underscored in our report Repairing the Cracks: How New Jersey Can Restore Black & Brown Communities Ravaged by COVID-19 and Systemic Racism, Black Americans have faced disproportionate economic setbacks during the pandemic, and a lack of stable and affordable housing has been a major contributor to their financial insecurity during this period.7 Much more likely to be renters, Black families have endured particularly great financial difficulties relating to housing during the pandemic, which have especially impacted renters.

Nationally, one-third of renters experienced housing insecurity in 2020 after the start of the pandemic compared to only one-sixth of homeowners.8 By December 2021, the percentage of U.S. renters not caught up on their rent payments was 16.1%,9 while the proportion of Black renters nationally not caught up on their rent payments was an alarming 30.5%.10 Thus, almost one in three Black renters were behind on their rent payments almost two years into the pandemic. By comparison, 6.9% of all homeowners were behind on their mortgage payments during this same time period.11 Expanded homeownership for Black families could help provide the greater housing stability that comes with homeownership, but we must also change policies to ensure that Black homeowners do not face greater housing instability than white homeowners; more than one in seven (15.5%) of Black homeowners were behind on their mortgage payments in the final month of 2021.12

To be sure, state and local governments and community-based organizations have been able to provide extraordinary shortterm housing assistance to New Jerseyans in this time of crisis.13 Yet, given the long history of policies which created barriers to homeownership for Black people, much more must be done to combat long-term racial inequities in housing to help Black New Jersey families access affordable, safe and stable housing that serves as a wealth-building vehicle as it has for generations of white families. Furthermore, we must ensure that Black New Jerseyans have equal access to loans, equal costs of homeownership compared to white New Jerseyans and access to foreclosure mediation to ensure that increasing Black New Jerseyans’ homeownership rate does not plunge them into default or foreclosure.14

Expanding homeownership and making the financial benefits of homeownership more racially equitable are both critical in order to close long-term racial gaps in economic security and wealth. Both past and present barriers to homeownership and housing wealth for Black families have contributed to the racial disparities in homeownership that we see today. While rental housing is vital to meet the housing needs of many New Jerseyans, particularly the most economically vulnerable, a focus on homeownership is also crucial because it provides greater financial stability and can open avenues for building wealth. However, for Black families to truly benefit from housing wealth, systems must be in place to support equitable asset-building opportunities for Black people. Reforms and policies must address the ongoing systemic barriers to wealth-building though homeownership for Black families.

This report builds on the Institute’s Erasing New Jersey’s Red Lines report, which examined historical and enduring barriers to Black New Jerseyans’ ability to purchase homes:

• First, it examines current disparities in homeownership for Black New Jerseyans and several ongoing barriers that contribute to present-day inequities. 
• Then, the analysis examines how existing homeownership programs and current efforts to expand homeownership opportunities fail to meet Black New Jerseyans’ needs and do not adequately address racial disparities in the financial benefits of homeownership.
•  Lastly, this report recommends policies to combat inequities in homeownership access and wealth returns for Black families in New Jersey.

As housing and economic disparities have come into greater focus during the pandemic, New Jersey has an opportunity to create new avenues for secure homeownership for Black New Jersey families that help build wealth. Action is urgently needed to ensure that Black families in the Garden State have equitable access to the safety, stability and asset-building opportunities that come with homeownership that are already available to the majority of white New Jersey families.

The recommendations in this report chart that path forward.