America has a homeownership imbalance. Nationwide, 74% of white households own their homes. For Black households that number is far lower, just 44%. Racist lending policies such as redlining and a lack of generational wealth and buying power have long hindered Black households when it comes to buying a home.
In New York City, the problem is getting worse. Homeownership among Black households has dropped 13% over the last 20 years, according to recent research by the Center for New York City Neighborhoods, an organization focused on affordable housing. Black households represent just 18% of homeowners in the city, despite accounting for more than a quarter of the population. The combination of racist policies and a widening wealth gap means fewer Black families in New York and other cities can afford to buy a home.
“In all markets, but particularly in very expensive markets like New York City, the savings required to make a down payment are one of the largest barriers—if not the largest barrier—for everyone, and particularly for black potential homeowners who don’t have as much access to intergenerational wealth as other communities might,” says Todd Baker of CNYCN.
To try to overcome this barrier, the center is developing a new Downpayment Assistance Navigator tool to help Black homebuyers find and combine resources such as grants and low-interest loans to make those down payments.
It’s part of a broader effort they’re calling the Black Homeownership Project, which will include several pilot programs aimed at helping remove the barriers that have limited homeownership in Black communities. In partnership with philanthropic foundations and banks in its network, CNYCN aims to chip away at the structural, financial, and often racist policies that make it disproportionately harder for Black families to buy homes.
In addition to down payment assistance, the project will also create a Savings Accelerator to augment the savings of aspiring Black homebuyers, with 3-to-1 matching contributions of what households put in. Another pilot will focus on estate planning to help existing homeowners pass their homes to the next generation without the legal and financial complications that often come with them.
The first of these pilots to take shape is the Downpayment Assistance Navigator. CNYCN is currently working with one lending partner to develop the online tool and hopes to launch it within the year. It will work like a search engine, allowing users to enter information about their finances and their home search and then connecting them with available grants, low-interest loans, and other resources. With existing funding assistance available from mortgage lenders, counties, and local nonprofits, the tool aims to ease the application process for prospective homebuyers.
“There are a lot of loans out there, but there’s a lack of information and a lack of the ability to combine these things,” says Baker. “If you don’t know about all those things, you’re not able to take advantage of them. And even if you do know about them, their processes and their criteria might make it challenging to take advantage of all of them. We think everyone benefits when you allow homebuyers to combine these resources.”
The online tool, which is still being developed, will help prospective buyers in New York to see all the available resources in one place, with a dedicated team keeping the tool up-to-date as funding availability changes and new options become accessible.
The Downpayment Assistance Navigator would be beneficial not just for Black homebuyers, but also for the banks that lend to them, according to Julian St. Patrick Clayton, deputy director of policy and research at CNYCN. They’d be linked with potential customers, many of whom have the income to be able to afford to buy a home and make mortgage payments but who lack the savings to make the down payment. “Once they see that you can find clients, you can find qualified homebuyers through us, the tool seems like something that would then have a certain sense of perpetuity to it,” he says.
More Black homeowners would provide a benefit to the city as well, particularly in neighborhoods where there are more people of color. “We’re also looking at the neighborhood stabilization aspect,” says Clayton. “We find that homeowners are the bedrock of these communities.”
The effort is about bringing New York City’s Black homeownership numbers back up, but it’s also trying to achieve a broader goal: reversing decades of policies that have held Black people back.
“If you’re talking about building intergenerational wealth and ending intergenerational poverty, one of the best methods is through homeownership,” says Clayton. “It’s the way America really built a solid middle class, and to a large degree Black homeowners were excluded from all those benefits.”