By Rodney Brooks, Next Avenue Contributor
Homeownership among African Americans has declined to levels not seen since before passage of the Fair Housing Act of 1968, a major concern among economists and financial planners. Chief among the long-term concerns is the impact this black homeownership trend will have on the already grim outlook for African Americans and their preparation for retirement.
“Black people are moving into homeownership at a much slower rate than anything we have seen in the past,” says Laurie Goodman, co-author of the Urban Institute’s recent report, “Are Gains in Black Home Ownership History?” and co-director of the Urban Institute’s Housing Finance Policy Center.
Black Homeownership Gains Erased
In the three decades after the Fair Housing Act passed, the black homeownership rate in America rose by nearly six percentage points, the Urban Institute report said. But from 2000 to 2015, that gain was more than erased as the black homeownership rate dropped to roughly 41%. By contrast, the homeownership rate among white Americans is about 71%.
“Gains in black homeownership have been hard won, which amplifies our concern that in the last 15 years, black homeownership rates have declined to levels not seen since the 1960s, when private race-based discrimination was legal,” says the report.
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The black community got hit harder by the housing crisis than other groups. In general, African Americans bought homes at the peak of the bubble at higher rates that whites and were often offered costly subprime loans, even when they qualified for prime loans with lower interest rates. Also, black families did not benefit as much as white families, overall, from the post 9/11 recovery.
Missing Out on the Best Way to Build Wealth
“Homeownership has historically been the best way to build wealth by far,” Goodman says. “Look at the average wealth of homeowners versus renters. The average wealth for black Americans who are homeowners is $90,000, with $50,000 of that in home equity. The average wealth for black Americans who are renters is $2,000.”
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This troubling trend has many implications for African Americans, but the potential impact on their retirement is especially worrisome, experts say.
The pay gap and the wealth gap are high on the list of reasons for a huge disparity in retirement savings between black and white Americans. And homeownership plays a big part in that wealth gap. The typical white household aged 47 to 64 has housing wealth of $67,000 and the typical African American household in that age group has zero home equity, says the December 2016 report, “Social Security and the Racial Gap in Retirement Wealth” from the National Academy of Social Insurance. READ MORE
SOURCE: JOHNS HOPKINS UNIVERSITY HUB
Shantell Roberts took the top prize in the group of 10 startups participating in the accelerator program with her idea for the PAC, short for Portable Alternative Crib. It's a lightweight box designed to keep babies well-positioned for safe sleep, as a means of preventing Sudden Infant Death Syndrome. The crib, with a thin mattress at its bottom, is also stocked with other essential care items for mothers such as diapers and swaddling blankets.
The idea was rooted in personal tragedy, after Roberts lost her infant daughter in 2011 from MRSA pneumonia. The 31-year-old, who has a 4-year-old son, is now an advocate for maternal and child health. She makes in-home visits to Baltimore mothers through the B'More for Healthy Babies Safe Sleep Initiative, and she runs a nonprofit, Touching Young Lives.
Wanting to go further with solutions, Roberts started reading about "safe sleep baby boxes" and learned more about the Finnish-born model through a doctor at Temple University. The boxes, which are becoming more popular in the U.S., are seen as a cheap and effective measure for protecting infants.
Roberts brought the concept to the Social Innovation Lab last fall, when she was accepted into the program along with nine other early-stage ventures.
The six-month program, part of JHU's Technology Ventures, provides mentoring, workshops, office space, and $1,000 in funds for the budding startups. Since 2011, the lab has supported 62 ventures that have gone on to raise more than $13 million and hire more than 269 employees.
The forum Tuesday night served as a grand finale for this year's cohort of entrepreneurs—a full list can be found at the end of this article—who are cooking up a range of ideas for new apps, community-serving nonprofits, and medical innovations.
The $25,000 will go a long way toward helping Roberts meet her goal of distributing 100 baby boxes in the near future. PAC will sell the boxes for $150, with each payment intended to fund another free box for families in need. Continue Reading