Rethink Housing and Community Development to Advance Racial Equity and Inclusion

by Kimberly Burrowes, Janae Ladet, Ally Livingston, and Maya Brennan

In the US, descriptions of housing affordability challenges and differences in wealth, health, and education need to include a racial equity lens, or the picture is incomplete. Legally authorized and mandated housing discrimination through federal lending and investment policies laid the cornerstone of complex socio-spatial issues that historically segregated communities continue to face. Many of the inequities within and between neighborhoods, particularly in large metropolitan areas, trace their roots to redlining.

Such discriminatory lending practices have left a legacy of disinvestment predominately in black and brown communities. Although the Community Reinvestment Act of 1977 sought to undo forced inequalities within neighborhoods by creating strong incentives for positive investment activity, the ramifications of housing segregation and economic exclusion will take additional policy attention to address.

To disrupt patterns of racial inequity in housing and community development, we need to understand their roots and continued impact on black and brown people and on communities at large. Equity mapping helps demonstrate the relationship between place and race. Racial Equity Impact Assessments can focus the planning conversation on the projected impacts on communities of color. Rigorous research to answer values-driven questions can increase awareness of the broad societal costs associated with segregation. These and other efforts can refocus the dialogue and increase understanding about the importance of inclusive and racially aware practices.

Here are three key lessons for policymakers, planners, and community developers seeking to combat current and historic barriers to racial equity and inclusion.

1. Improve access to credit for minority communities and support community-asset building.

Without access to generational wealth transfers, asset building can present a steep challenge. The historical racial barriers to home mortgages and small business lending put black households at a disadvantage for wealth accumulation. For small and minority-owned businesses, lack of access to credit continues to create challenges for businesses to start and sustain themselves, leading to fewer economic opportunities for individuals and neighborhoods. Meanwhile, the low rate of black homeownership impedes the primary driver for building wealth in communities of color. Addressing these dual issues can open opportunities for households of color to build essential assets to support retirement, higher education, and other goals.

Alternative financial models and tools that could increase access to credit and wealth-building opportunities for minority and low- and moderate-income communities include cooperative businesses, cooperative housing models, and community banks and credit unions. These financial models improve community asset building and economic opportunities for businesses and individuals because they are often based on “pooling of resources, democratic economic participation, and profit sharing” and make capital more readily available for people who have been excluded from mainstream financial systems and power structures.

The federal government could also consistently enforce the Equal Credit Opportunity Act and the Community Reinvestment Act, both of which address discrimination in lending practices to racially segregated and low- and moderate-income communities.

Finally, financial institutions should revaluate how they value and monitor credit. Predatory lending, high-risk financial products, and high-cost loans do not improve asset-building opportunities, but instead have damaged credit scores and led to negative equity or foreclosure. Some argue that banks have used credit scores as a proxy for race, similar to the discriminatory practices of redlining. Advocates and researchers have proposed new models to evaluate credit, such as character lending, rent history payments, personal relationships, and gathering other nontraditional data on a person’s financial behavior. New financial tools and models, paired with enforcement of existing policies, offer promising opportunities to support asset building among communities of color and low-income households.

2. Promote access to trusted community anchors to address disparities in health and education.

The inequities stemming from redlining extend beyond the home and are embedded in access to health and education in minority communities. A 2017 study found that black households are more likely to have children with asthma than their white counterparts, largely because of material hardship, including poor housing quality, crowding, and lack of amenities. Limited access to health care services and healthy lifestyle amenities, such as parks, further exacerbate health disparities in communities of color. Community centers can provide health care services and other amenities to encourage healthy living. These centers and other locally based organizations can be anchors in neighborhoods that have faced historic disinvestment and provide a replicable model to promote health equity.

Historic inequities also translate to weaknesses in student performance and access to high-quality schools. Research on housing assistance and school quality has found that simply getting a housing choice voucher is not enough to help families reach better neighborhood schools. In addition, research found that in Denver, minority students, Latinos in particular, were more likely to repeat a grade if they were from a low-income household, received public assistance, lived with a single mother, or lived in a rented home. Risk factors are often correlated and can compound. In addition, a University of Richmond study found that children in minority neighborhoods face more barriers to accessing high-opportunity schools. Disparities in housing and neighborhoods are mirrored in K–12 schools, and often, the resources, supports, and accountability in schools cannot address this gap.

Establishing high-quality educational and aspirational programming within the community can foster social cohesion, create opportunities, and improve outcomes for residents. For instance, after-school programs offered in communities improve academic performance. Community-based approaches can deliver services that meet the needs of the whole child (and family) because of their depth of contextual knowledge and capacity to integrate the neighborhood into the solution.

3. Invest in communities and engage residents

Meaningful and inclusive community revitalization can break down some of the barriers instituted through disinvestment and discrimination. This can be done through equitable development, but it requires intentional engagement and community input. Community development corporations (CDCs) and community land trusts (CLTs) have facilitated this engagement. While CDCs and CLTs usually have residents on their boards, CDC leadership often does not represent those they serve, which can leave residents feeling disengaged.

At the annual meeting of HAND, a membership organization for housing providers in Maryland, Virginia, and Washington, DC, Ernst Valery, founder and president of EVI Equity, addressed this challenge. He said, “We think so much about renovating the building, we need to also renovate the people.” EVI purchased Essex Village, an apartment complex in Henrico County, Virginia, that was far from providing its residents with a platform for success in life; according to Valery, it has been deemed the county’s worst apartment complex. EVI and the property manager CAPREIT quickly formed a tenants’ association to ensure that Essex Village residents were involved early in the planning process. Residents expressed excitement that the new owners wanted to hear their voices and to collaborate on creating lasting change in the housing development. When tenants are offered a seat at the table, they are eager to get involved, but developers need to provide the space to be heard.