NEWARK – The New Jersey Institute for Social Justice today released Black Homeownership Matters: Expanding Access to Housing Wealth for Black New Jerseyans, a report examining the barriers to Black homeownership – and the wealth benefits that come from it – faced by Black New Jerseyans. An Executive Summary of the report can be found here.
“Black New Jerseyans simply do not have the same access to owning homes as their white neighbors do,” said Nichole Nelson, Mellon/ACLS Public Fellow and Policy Analyst and the primary author of the report. “Even when Black households are able to own homes in New Jersey, they face substantial barriers to wealth-building and enjoy significantly fewer financial benefits from homeownership than their white peers.
Just 38.4% of Black New Jersey households own homes compared to 75.9% of white New Jersey households. In addition, Black New Jerseyans are 2.1 times more likely to be denied a loan for the purchase of a home than white New Jerseyans.
Also, concerning is the fact that Black New Jerseyans’ total wealth through homeownership is only 5.9% of the state’s total $860 billion in wealth through homeownership in primary residences, even though they make up about 15 percent of the state’s population. .
Barriers to Black homeownership include the racial wealth gap itself which limits access to homeownership; high housing costs; higher home lending costs, including a lack of access to fair credit; and credit scoring systems.
As explained in the report, even when Black New Jerseyans are able to overcome these obstacles and purchase homes, Black families’ homes are often undervalued due to ongoing segregation and are more vulnerable to foreclosure.
“When we’re talking about building wealth, Black homeownership matters,” added Nelson. “Because homeownership is a primary driver of wealth-building, it is not surprising that we find ourselves in the Garden State with one of the worst racial wealth gaps in the country given the obstacles faced by Black people to owning their homes.”
The report argues that while the state and federal governments have taken swift and meaningful action to address urgent housing needs for renters and homeowners during the pandemic, more must be done to address ongoing racial disparities in homeownership in New Jersey.
Black Homeownership Matters presents the following policy proposals that offer solutions for addressing current barriers to homeownership for Black families in New Jersey:
- New Jersey must ensure that state homeownership programs meet Black New Jerseyans’ needs by taking the following actions: a. creating first-generation homebuyers’ programs; b. providing greater levels of down-payment assistance; c. forming stronger connections with real estate industry partners who serve Black communities; and d. improving collection of demographic data for existing program participants.
- The State must commit to combatting home appraisal discrimination by passing A1519/S777.
- New Jersey must help Black homeowners avoid foreclosure.
- New Jersey must increase and protect successful programs to expand affordable housing.
- Lenders should develop targeted assistance programs for Black homebuyers.
- New Jersey must establish the New Jersey Reparations Task Force.