Housing

The COVID-19 pandemic has devastated the U.S. economy — shuttering businesses, eliminating jobs and disrupting everything from education to the nation’s food supply chain. But it has been most devastating to Black Americans, who already face a host of historical economic and social disparities that have been highlighted by the Black Lives Matter movement even as the country continues to struggle with the worsening pandemic.

On Tuesday a panel of experts gathered by UNC-Chapel Hill’s Kenan-Flagler Business School, its Kenan Institute of Private Enterprise and the Institute of African American Research held a virtual discussion of the problems disproportionately facing Black people in the current environment — and possible solutions.

“Talk about us living in a very, very unique time,” said Majestic Lane, deputy chief of staff and chief equity officer for the city of Pittsburgh. “We’re living in essentially 1928, 1918 and 1968 all in the same year, which has never quite happened. How we respond to it is really important. For us, in looking at what’s happening in our community, what’s happened in terms of social unrest as a result of state sanctioned violence and what’s happening as a result of COVID and the impacts of the pandemic really are two sides of the same coin.”

Majestic Lane

The American system disrupted by both the pandemic and mass protests over police violence against Black people was designed to work exactly the way it was working, Lane said. In charting a ‘new normal’ the goal should not be to reconstruct that system, he said, but to address long-standing problems in a system that chose winners and losers based on a legacy of racist ideas and practices.

“There has to be a shift in how society functions,” Lane said.

In Pittsburgh, that’s meant examining very basic assumptions about policing, Lane said. The idea that not every 911 call means police should be sent to the scene may be new to some people, he said. But for those who understand how racist policies in everything from education and banking to health care can see how bringing police into over-policed communities every time there is something like a family argument will likely make situations more dangerous.

In the 2021 budget in Pittsburgh, the city is creating an office of Community Health and Safety. Working with non-profits, the community will work to minimize the presence of police in situations where trained social workers, psychologists or addiction specialists might be a better fit. People in the community who are already trusted and invested will also be utilized in getting to the roots of violent incidents, Lane said.

But there are broader structural challenges as well, Lane said — and they’ve been made even more apparent by the pandemic.

Black people in America have been systemically shut out of the building and maintaining of wealth since before the beginnings of the Republic, said Nikitra Bailey, executive vice president with the Center for Responsible Lending. The current health and financial crises are making that more apparent, she said — and call for a response that takes that into account.

Nikitra Bailey

“Our nation is facing a reckoning over structural racism,” Bailey said. “The inequality it has produced is being exacerbated by the coronavirus. The COVID-19 pandemic is both a profound public health crisis and an equally profound economic crisis. The virus has devastated families across the nation and has fallen disproportionately on Black families.”

“Systemic discrimination in the housing sector left Black families more vulnerable going into the 2008 housing crisis,” Bailey said. “And that crisis and the response to it left them worse off. This crisis has likewise hit Black families hardest again. And the response so far is not equitable nor is it sufficient.”

The COVID-19 crisis threatens to become a foreclosure crisis in which the Black community has not had the same opportunity to build up home ownership and home equity, Bailey said. They didn’t have the same economic cushion many white families did at the beginning of the pandemic.  That’s due to historical inequities, like Black families being shut out of New Deal programs that gave access to federally supported credit. Those programs led to an explosion of white homeownership, a swelling middle class and generational wealth for white families. Only about 2 percent of the loans available in that period benefitted Black families, she said.

Black families were making ground after the historic homeownership lows of the Great Recession, Bailey said — with Black homeownership reaching 44 percent. But the current COVID-related economic crisis means a tightening in the mortgage market that is requiring much higher down payments and higher credit scores for families to qualify for loans. That threatens to erase the gains of Black homeowners in the country, Bailey said.

Because of the historic and current-day process of racial redlining, most Black communities don’t have as much home equity, Bailey said — something many white homeowners can use to withstand tough economic periods.

For Black homeowners and Black renters (a disproportionately large population), the pandemic is leading to greater dangers.

“There are reports that one in five renters are saying they missed or deferred a rental payment in June, “We know 31 percent of Black renters are reporting this as well, which is twice the rate of white renters. And 13 percent of homeowners overall are saying they’ve needed to defer a mortgage payment and again 23 percent said they missed or deferred their payment, which is twice the rate of white homeowners.”

Congress needs to react accordingly, Bailey said. The CARES act had a moratorium on evictions and foreclosures, she said, but that expired last week. With around 23 million families likely to fall behind on their rent, Black families will be hardest hit.

Housing is an important pillar of the overall economy, Bailey said — critical not just to those who are most impacted, but to the entire nation.

“We need the House’s bill, the HEROES act, to be passed in the Senate and we need the President to sign it immediately,” Bailey said. “There is $100 billion of rental assistance in the HEROES act. If that legislation moves, we know that this crisis can be averted. We also need the HEROES provisions around homeownership protection. There’s $75 billion in homeownership protections. We also need those protections to be enacted.”

But beyond those immediate treatments for immediate ills, Bailey said, there needs to be movement on longstanding inequities and systemic racism.

“What we need is a federally guaranteed restorative justice program,” Bailey said, whereby Fannie Mae and Freddie Mac take proactive action to increase Black homeownership and we enforce fair housing and fair lending laws already on the books.

“We have really effective tools in place,” Bailey said. “If we use them we can root out that discrimination that is dragging down the economy overall.”