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Opinion: Homeownership Is a Crucial Tool for Communities of Color to Build Wealth. Politicians Should Never Take It Away.

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In California and throughout the United States, politicians, the real estate industry, and YIMBY groups are attacking single-family home zoning. Yet these groups rarely, if ever, mention a key fact: homeownership is a crucial tool to help communities of color build wealth and financial security. Politicians should never take it away.

“Homeownership continues to represent an important opportunity for individuals and families of limited means to accumulate wealth,” researchers at Harvard University’s Joint Center for Housing Studies noted in a 2013 study. “As such, policies to support homeownership can be justified as a means of alleviating wealth disparities by extending this opportunity to those who are in a position to succeed as owners under the right conditions. The key, of course, is to identify the conditions where lower-income and minority households are most likely to succeed as owners and so realize this potential while avoiding the significant costs of failure.”

For any legislation or land-use policy that aims to ban single-family home zoning, politicians must always consider the economic impacts on communities of color. If not, elected officials are ignoring an important instrument for wealth building — and will worsen economic disparities. 

The Harvard study lays out several valuable points about homeownership for people of color:

  1. In real-life practice, homeowners are more likely to accumulate wealth than renters;
  2. Homeownership has meaningful social benefits in which people have control over one’s living situation, can put down roots in a community, and people feel a sense of success when owning a home;
  3. Politicians should help people succeed as homeowners;
  4. While homeownership is risky, it’s worth the risk — and does not leave people worse off if things go awry.

Communities of color and lower-income households “experienced sizable gains in net wealth on average that was associated with owning, while renters saw few gains,” the Harvard researchers wrote.

Yet banning single-family home zoning invites predatory developers into middle- and working-class Black and Latino neighborhoods, where purchasing properties may be less expensive. Those developers will construct over-priced apartments, luring more affluent individuals into historical communities of color. Longtime, less affluent residents will then be forced out due to gentrification and displacement — they won’t be able to pay rising, sky-high rents.  

In fact, the negative consequences of banning single-family home zoning will be felt most by lower-income communities of color, not predominantly affluent white areas. Predatory developers will go where land is least expensive.

In addition, demolishing large swaths of single-family housing for apartments will negatively impact renters’ ability to someday become homeowners and build wealth since less single-family housing stock will be available.    

Lastly, the aggressive push by politicians, the real estate industry, and YIMBY groups to turn individuals, including people of color, into permanent renters will create a massive transfer of wealth — and with that political power — that benefits those who will own the apartments: corporate landlords and other major real estate companies. In Los Angeles, for example, a report by Strategic Actions for a Just Economy found that more than two-thirds of all rental housing is owned by corporate investment vehicles.

The scheme to ban single-family home zoning is born out of a troubling trickle-down housing agenda championed by the real estate industry and YIMBY groups and taken up by certain politicians.

Real estate executives want to build more pricey market-rate apartments for a housing affordability crisis, saying that eventually rent prices will drop with the increase of more rental housing. It’s a flawed, self-serving concept that does not directly and urgently help moderate- and lower-income residents, who are suffering most during the ongoing housing affordability crisis.

And it fuels gentrification and displacement in working-class communities of color and can change the demographics of a community as well as its political power.

But it does help corporate landlords and developers generate billions in profits.

If anything, as the Harvard researchers suggested, politicians should come up with policies that help more people of color enter into homeownership and flourish as homeowners — not diminish people’s ability to become or remain homeowners, which then takes away the opportunity to build wealth and continues troubling economic disparities.

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