The city of Minneapolis recently announced that they’ll be dedicating almost $6 million to fight against the racial disparities that prevent all citizens from owning homes.
Announced as part of a new program, according to CBS, the investment is expected to go towards creating homes on almost 600 vacant lots in Minneapolis. This particular fund will go towards building 40 homes in 21 vacant lots; each house built will be affordable for all.
Passed through the Minneapolis Business, Inspections, Housing and Zoning Committee last week, city leaders are expecting the investment to move through to the full City Council in the upcoming days.
With approximately $5.8 million allocated to the cause, the investment is part of the Minneapolis Homes Program. Created by the city itself, the Minneapolis Homes Program ensures homeownership, generational wealth and sustainability for Black residents and Indigenous residents.
As part of the program, the city of Minneapolis will provide the funds and city-owned property for the houses to be built. Through the Minneapolis Homes Program, the city will also teach people about helpful homebuyer resources and will provide loans to people to help them keep their property.
“For generations, BIPOC communities have faced systemic barriers to homeownership,” said Mayor Jacob Frey per a Twitter post about the new announcement. “Through programs like Minneapolis Homes, we can directly address those racial disparities and help our BIPOC residents and families build generational wealth.”
Overall, the difference in homeownership in Minneapolis between BIPOC Americans and white Americans is one of the biggest in states across the country.
According to a 2021 report by the Federal Reserve Bank of Minneapolis, the rate of homeownership by Black Americans in Minnesota in general has fallen each decade since its highest peak in 1950.
While the gap between homeownership of Black Americans and white Americans in Minnesota was approximately 20% in 1950, the latest data found by the Federal Reserve Bank of Minneapolis reports that it is now over double that rate at 50%. As nearly 77% of white Minnesotans own homes, only approximately 26% of Black Minnesotans are homeowners.
Amongst the disparities that were identified as contributing to this gap are less access to credit as part of redlining and a lack of intergenerational wealth.
While only six percent of white mortgage applicants in the state were refused, approximately 13% of all Black Minessotans who applied for a mortgage were rejected.
As for household wealth, the median net worth of Black Americans in Minnesota was reported as $0 while white households had a median net worth of $211,000.
“Minnesota’s racial and ethnic disparities in homeownership today reflect generations of barriers that limited homeownership and its wealth-building advantages to White households,” said the Federal Reserve per their report. “While policy solutions to address these deep-seated gaps are outside the scope of this article, leaders contemplating policies to help these households transition to homeownership should ground their solutions in an understanding of not only the scale of racial disparities but also the systemic issues that sustain these disparities.”
“Homeownership gaps limit economic opportunity for households today and for generations to come,” they added.
