Black homeownership continues to lag in Atlantic City and around the country – Press of Atlantic City

ATLANTIC CITY — Increasing Black homeownership is critical to the continued growth of the resort and other urban areas around the country, city and national officials say.

The struggle to grow homeownership is one of the city’s “fatal flaws,” said 6th Ward Councilman Jessie Kurtz. The state, which oversees the running of the city, has also identified homeownership as one of the critical issues facing the city.

“That’s one of the fundamental issues right now with Atlantic City as to why we suffer from some of the issues we do,” Kurtz said.

According to U.S. Census data, Atlantic City has a Black homeownership rate of 31.2%, while Blacks make up 32% of the total population.

A 2018 state report on Atlantic City said increasing homeownership was a key part of the city’s continued growth and a way to increase the ratable base.

“Increasing home ownership results in an improved condition of properties, increased wealth for residents and increased community engagement,” according to the report. “It also helps residents avoid displacement as property values rise due to gentrification.”

Increasing Black homeownership was one of the major topics during the recently completed NAACP National Convention held in the city.

Black homeownership has been fading since 2004, before a severe recession pummeled the housing market in 2008. Of the nation’s homeowners, Blacks are the least likely to own a home, Andre Perry, a senior fellow at Brookings, said during a panel discussion with Black financial consultants and bankers he led at the convention last week.

Biases have also hampered the appraisal process, in some cases leaving Black homeowners shorted on their property values, Perry said.

Perry said during the panel discussion that the decline in Black homeownership is reaching points were it was when segregation was still legal in the United States.

In New Jersey, Gov. Phil Murphy’s administration has prioritized making homeownership in communities of color achievable, eliminating funding diversions in the Affordable Housing Trust Fund, said Lisa Ryan, a spokesperson for the state Department of Community Affairs.

Additionally, the state Housing and Mortgage Finance Agency, is managing the Affordable Housing Protection Fund, which has a new $305 million investment made possible by the state government, Ryan said. The DCA oversees both funds.

“As part of our mission, DCA is committed to providing more affordable, quality, and sustainable housing for people now and in the future,” Ryan said.

While government agencies are working to reverse the downward trend, change is needed in other areas because systemic impediments to Black ownership are nothing new, said Chuck Bishop, who heads Home Lending Diverse Segments at Wells Fargo.

Much of the problem is tied to a lack of Black wealth, the panelists said. Without savings, African Americans disproportionately find themselves not being able to afford down payments for homes.

Wells Fargo has instituted a mortgage plan for a 3% down payment to help lessen the down payment barrier. While it makes down payments more affordable, it also leaves money for the consumer for home repairs or other property management needs.

Perry also cited poor credit scores among African Americans as another contributing factor.

Overall, each agreed that change is needed to how private sector lenders structure their systems to help make homeownership more obtainable for minority groups.

“We’ve got to be bold,” Bishop said. “We’ve got to challenge the paradigms that exist. We have to do something very different.”

In Atlantic City, programs have become available for down payment assistance to first-time homebuyers that help cover a set percentage. Using grants, these programs equip the buyer with training on home management and budgeting for homeownership, Kurtz said.

DCA also is investing in Atlantic City’s communities, contributing $2 million in Neighborhood Revitalization Tax Credit funding earlier this year to spur new development and housing opportunities in the city’s Chelsea, Midtown and Ducktown neighborhoods, Ryan said.

Kurtz also suggested that the U.S. Department of Housing and Urban Development limit the time someone stays in public housing and then steer them into a program that helps them purchase a home.

“There are instances of the public housing units being passed down from generation to generation,” Kurtz said, “and that’s not the purpose of public housing.”

Studies have shown that the local economy is better and crime rates are lower in communities with more owner-occupied homes, the panel said.

The NAACP panelists stressed the benefits of wealth accumulation, and getting Black homeownership up again can help future generations avoid poverty and poor living conditions.

“I always tell people it’s never a bad time to be a first-time homebuyer,” Bishop said. “Rates are rising, I agree, but you’re paying a mortgage if you’re renting. It’s just not your mortgage. You’re paying the landlord’s mortgage, so it’s time to pay your own mortgage.”

The community, Kurtz said, also should be more open to discussing how beneficial homeownership is for an individual’s wealth and equity, providing leverage in other financial assets.

“It’s an empowering endeavor,” Kurtz said.