https://kamalaharris.org/homeownership-gap/
Kamala Harris for the People
July 6, 2019

Kamala Harris Speaks At Essence Fest, Announcing $100 Billion Minority Homeownership Plan To Address Racial Wealth Gap

Today, at the 25th Annual ESSENCE Fest, Senator Kamala Harris announced her $100 billion plan to invest in minority homeownership to address the racial wealth gap. The plan would affect four million homebuyers who rent or live in historically red-lined communities, amend the credit reporting process, and hold lenders accountable for discriminatory practices. 

The plan is a part of Harris’ agenda which includes previously laid out plans to offer relief for renters paying more than 30% of their income on rent; provide up to $500 a month for working families making less than $100,000 through a new middle class tax credit; combat the Black maternal mortality crisis; close the gender pay gap for women, which is 61 cents on the dollar for Black women; take executive actions to reduce the carnage of gun violence in communities across America; and, make new investments to raise teacher pay and expand opportunities for Black teachers.

Read more about the plan here.

Key excerpts from Senator Harris’ speech:

  • “So we must right that wrong and and after generations of discrimination give Black families a real shot at homeownership -- historically one of the most powerful drivers of wealth in our country.”
  • “So I will remove unfair barriers Black Americans face when they go to qualify for a home loan. I will strengthen anti-discrimination lending laws and implement stricter enforcement. And I’ll invest—I’ll invest through the federal government— $100 billion to put homeownership within the reach for those who live in redlined communities and it would help up to 4 million families with down payments and closing costs.” 
  • “Black Americans were excluded in our country for years and generations from participating in the first industrial revolution and the wealth that that generated. Now with the technological revolution, we must ensure that everyone can participate in the wealth it creates.”
  • “And to do that I will  invest in our HBCUs—I am a proud graduate of Howard University!—I will invest in our HBCUs-- the resources they need to develop world class STEM programming to ensure that our students have a real opportunity to shape the technology revolution. And here’s
    the thing, those of us who are proud HBCUs know. HBCUs graduate nearly 1 in 4 students who earn science and engineering degrees. They are our future.” 
  • “And in the coming weeks I’ll announce new investments to support Black entrepreneurs and business owners by increasing access to capital and credit.”

Full rush transcript of Senator Harris’ remarks:

Good morning! My heart is full. Good morning! Well let me first start by congratulating Essence on this 25th anniversary of the Essence Festival. Congratulations! And it is 25 years strong, and of course it is so good to be back in New Orleans.
 
So I’ve got a limited amount of time but I wanted to share with you a couple of things about my background and some ideas and plans that I have. But I do want to start by thanking everybody here because this is a room full of leaders and I cannot thank you enough for everything you do. Everything.
 
So about my background.
 
I am a daughter of the civil rights movement. I grew up in a family and in a community of adults who spent full time marching and shouting about this thing called justice.
 
My sister Maya and I, we were raised by a mother who was all of 5 feet tall but if you met her you would have thought she was 7 feet tall.
 
And our mother, she taught us the importance of a good education.
 
She taught us the good old-fashioned value of hard work.
 
She taught us don’t let anyone tell you who you are. You tell them who you are.
 
And she taught us not only to dream but to do.
 
And she taught us to believe in our power to right what is wrong.
 
And she was the kind of parent who if you came home complaining about something, our mother would look at you, maybe with one hand on her hip, and with a very straight face, she would say “Well what are you gonna do about it?”
 
So I decided to run for President of the United States.
 
And look, we know there is a lot that is wrong with the current occupant of the White House. He says he wants to “Make America Great Again.” Well what does “again” mean?
 
Back before the Civil Rights Act?
Back before the Voting Rights Act?
Back before Roe v Wade?
Back before the Fair Housing Act?
 
Well Essence, we’re not going back.
 
In fact, it is time to turn the page. And it is time to write the next chapter of these United States.
 
And I’d ask that we took a look at—and I urge everyone to read—the Black Census Project headed by Alicia Garza and let that be our guide. It’s the largest survey of Black people in America since Reconstruction.

And it demands action recognizing that the many facets of Black life must be addressed. And in my opinion, it is a guide to right what is wrong in America.
 
So you know, how sometimes people will say—and they say it certainly to me often because I was of course the first black woman to be elected DA of San Francisco, I was the first black person to be elected Attorney General of California, only the second black woman to be elected to the United States Senate, in the history of our country, and so you know, people will often come up to me and they will say Kamala, talk to us a little bit about Black people’s issues. And I look at them, and I say, you know what? I am so glad you want to talk about—
 
The economy.
 
I am so glad you wanna talk about health care.
 
I am so glad you wanna talk about the racial wealth gap.
 
And let’s talk about national security while we’re at it.
 
And let’s talk about the dreams people have for our children.
 
So, let’s talk a little bit about all of that.
Let’s start with economic security.
 
The Black Census shows us that in the last year, nearly half of Black families said they did not have enough money to pay a monthly bill.
 
It found that a third of Black families cut back on food because they could not afford it.
 
And for every dollar white men earn, Black women in America earn 61 cents.
 
So we must right what is wrong with the economy and pass my LIFT Act which will give every family making under $100,000 a year a tax credit that they can collect at up to $500 each month. Economists have described it as the most significant middle-class tax cut we’ve had in generations.
 
We must right what is wrong and take action on equal pay with my plan that puts the burden on corporations,  not working women, to prove that they’ve been paid equally for equal work.
 
We must right what is wrong and close the teacher pay gap to give millions of teachers -- the vast majority of whom are women -- a raise.
 
And I say to them, so you want to talk about Black issues?
 
Let’s talk about health care also.
 
Nearly one third of folks in the Black census said they put off seeing a doctor because they could not afford it.
 
We know that Black women are 3-4 times more likely to die in connection to childbirth.
 
And we know that Black communities across this country are dealing with water that is not safe to drink.
 
We must right what is wrong with public health policy and pass Medicare for All in this country.
 
And we must right what is wrong and pass my maternal mortality bill so that Black women are taken seriously when they walk in that doctor’s office, in that clinic, or in that hospital.
 
We must right what is wrong and finally treat access to clean drinking water like what it should be. A fundamental right. 
 
And ladies, if we’re going to right what is wrong let’s deal with the racial wealth gap in our country. Which is why today, here, at the Essence Festival, I am releasing a new plan to start closing the wealth gap.
 
And here’s how it works. So a  typical Black family has just $10 of wealth for every $100 held by a white family.

So we must right that wrong and and after generations of discrimination give Black families a real shot at homeownership -- historically one of the most powerful drivers of wealth in our country.
 
So I will remove unfair barriers Black Americans face when they go to qualify for a home loan.
 
I will strengthen anti-discrimination lending laws and implement stricter enforcement.
 
And I’ll invest—I’ll invest through the federal government— $100 billion to put homeownership within the reach for those who live in redlined communities and it would help up to 4 million families with down payments and closing costs.
 
And by taking these steps we can shrink the wealth gap between Black and White households by at least one third.
 
But we cannot bridge the racial wealth gap just by addressing historical inequities  . . . although we must do that . . . we also have to write the next chapter.
 
Black Americans were excluded in our country for years and generations from participating in the first industrial revolution and the wealth that that generated. Now with the technological revolution, we must ensure that everyone can participate in the wealth it creates.
 
And to do that I will  invest in our HBCUs—I am a proud graduate of Howard University!—I will invest in our HBCUs-- the resources they need to develop world class STEM programming to ensure that our students have a real opportunity to shape the technology revolution. And here’s the thing, those of us who are proud HBCUs know.
 
HBCUs graduate nearly 1 in 4 students who earn science and engineering degrees. They are our future.
 
And in the coming weeks I’ll announce new investments to support Black entrepreneurs and business owners by increasing access to capital and credit.
 
So in closing, by taking these challenges on, we can close that gap -- and that not only lifts up Black America, it lifts up all of America.
 
So Essence, join me—as we right what is wrong and write the next chapter of history in our country.
 
Because Black women know.
 
We know America’s story has always been written by those who see what can be unburdened by what has been.
 
And just think -- less than 60 years ago, Ruby Bridges needed federal marshals to escort her to school in New Orleans and today, Mayor LaToya Cantrell is the first woman and the first black woman to lead this city.
 
The fight of Black women has always been fueled and grounded in faith and in the belief in what is possible.
 
We have always built the future that we can see and believe in….and fight for. 
 
It’s why Sojourner spoke…. 
It’s why Mae flew….
It’s why Rosa and Claudette sat….
It’s why Maya wrote….
It’s why Fannie organized….
It’s why Shirley ran….
 
And it’s why I stand here as a candidate for President of the United States. 

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https://kamalaharris.org/homeownership-gap/

COMBATTING THE RACIAL HOMEOWNERSHIP GAP

Kamala Harris knows economic justice and racial justice go hand in hand.  A sign of economic justice in our country is the distribution of wealth, which is the measure of a person’s or family’s financial net worth.  Wealth makes it easier for people to move between jobs and places, handle an emergency financial situation, and retire with dignity.  But on our current trajectory, by 2053, the bottom 50% of Black households’ liabilities will equal or exceed assets.  Overall Black households will continue to have just a fraction of the wealth held by white households.

One major cause for this is historic redlining – the Home Owners’ Loan Corporation’s practice of identifying neighborhoods, often majority Black neighborhoods, where traditional lenders should not lend.  Redlining has resulted in households of color receiving just 2% of the FHA loans extended between 1934-1962, and formerly redlined neighborhoods are sites of deep racial disparities in home value and lending activity.

The second main cause was the G.I. Bill, which is credited with providing millions of low-income returning veterans with access to wealth-building opportunities that helped to create the American middle class.  Veterans of color, however, were largely excluded because, under the G.I. Bill, private lenders were free to refuse mortgages and loans to Black borrowers.

Black and minority families were also disproportionately impacted by the subprime mortgage crisis and the subsequent Great Recession. Throughout the subprime market, Black borrowers were subjected to higher cost and higher risk loans than white borrowers, even when both had similar levels of creditworthiness. During the years of recovery, 2009-2011, the wealth gap between white households and households of color widened in part due to housing-market weakness.

Today, nearly three-quarters of white households (73%) are homeowners, while under half of Black households (45%) and Latinx households (47%) are homeowners.  This percentage of Black homeowners has remained basically unchanged since 1968.

If we eliminate racial disparities in homeownership rates, median Black wealth would grow $32,113 per household, and the wealth gap between Black and white households would shrink 31%.  Median Latinx wealth would grow $29,213 per household, and the wealth gap between white households would shrink 28%.

HERE’S HOW WE’LL DO IT: 

We’ll invest $100 billion to provide down-payment and closing-cost assistance to four million homebuyers who rent or live in historically red-lined communities.

  • Our plan will create a 100-billion-dollar U.S. Housing and Urban Development (HUD)-administered grant to provide up to $25,000 in down payment assistance and closing costs. According to research from the Urban Institute, in early 2018, first-time homebuyers bought houses worth $245,320 with an average down payment of $22,561, and an interest rate of 4.43%.
  • This $100 billion investment will provide at least 4 million families/individuals living in federally-supported or renting housing in these historically red-lined communities with down payment and closing cost assistance.
  • In order to qualify for the program:
  • The grantee must be purchasing a principal residence.
  • The grantee must have lived for at least the preceding 10 years in a historically red-lined community that remains low-to-moderate income.
  • Grantee families cannot have an annual income of over $100,000 or $125,000 in high-cost areas.
  • Grantee individuals cannot make over $50,000 or $75,000 in high-cost areas.
  • The max grant is capped at either $25,000 or 20% of the loan value plus closing costs.
  • The maximum home price to qualify for the grant is $300,000 for consideration of high-cost areas.
  • Consistent with our more inclusive credit-calculation proposals below, an individual or family would need to demonstrate an ability to pay the mortgage with the lender.

We’ll amend the Fair Credit Reporting Act to require the credit scores reported by credit reporting agencies to include payments of rent, phone bills, and utilities.

  • Credit scores are often calculated by taking into account payment history on items such as credit cards, student loans, auto loans, and mortgage payments. However, not all consumers have accumulated these assets.
  • Today in America, 26 million people are “credit invisible” and 19 million people have “unscorable” credit files, including those who are deemed to have insufficient information or a “thin credit file.”
  • Many “credit invisible” consumers pay rent, utilities, and cell phone bills, in full and on time, but this responsible payment history is not positively reflected in their credit score.
  • Expanding the calculation of credit scores to include payments made on rent, phone bills, and other utilities will increase access to credit for those with a limited or “invisible” credit history or poor credit scores.

We’ll require lenders to calculate debt to income on a monthly basis and expand the sources of income for purposes of the calculation.

  • Lenders currently calculate debt to income as total debt against one year of income. The resulting ratio tends to disproportionately negatively impact Black and Latinx
  • We’ll require mortgage underwriters, when using Federal Housing Administration (FHA) loans, to calculate a borrower’s debt-to-income ratio by using monthly expenses against monthly income.
  • Mortgage underwriters will also be required to include in their income calculations non-W2 income like earnings from non-traditional work, and Black and Latinx workers are more likely to participate in the gig economy.
  • This change to a debt-to-income ratio using monthly expenses against monthly income will impact 7.5 million Black households and nearly 5 million Latinx households.

We’ll strengthen anti-discrimination lending laws and implement stricter enforcement.

  • We’ll update the Home Mortgage Disclosure Act (HMDA) to require that each loan receive a unique loan identifier to track the loan. These loan identifiers are intended to protect against redlining and “steering”— a process where listing agents steer consumers into risky and high-cost loans.
  • The HMDA currently requires any bank or credit union that makes more than 25 loans a year to report detailed loan characteristics such as interest rates, points and fees, loan terms as well as borrower characteristics like credit score, age, gender and ethnicity.
  • We’ll expand HUD’s fair housing program to make public housing more inclusive by banning discrimination based on gender identity, marital status, source of income, and sexual identity.
  • We’ll direct HUD, the Federal Reserve, and the Federal Housing Finance Agency to conduct audits and fair housing tests to prevent discrimination at the point of sale.
  • We’ll make sure that the U.S. Department of Justice has the resources it needs to implement Stricter enforcement of housing anti-discrimination laws.
  • And we’ll prohibit regulatory relief for large banks and lenders that have had a history of wrongfully guiding borrowers into predatory loans.

And to ensure these new homebuyers have the necessary financial literacy to stay in their homes, we’ll increase funding for the Housing Education and Counseling (HEC) program.

  • The HEC program is aimed at providing financial literacy for first-time These additional dollars will be used to expand the program to include all low- and middle-income homeowners seeking educational resources.
  • According to one study, participants in the housing education program were one-third less likely to become 90 or more days delinquent during the two years after they obtained their home loans.