Friday, October 19, 2012
Johnson on the Economic Crisis, Homeownership, and Race
Marcia Johnson (Texas Southern) has posted Will the Current Economic Crisis Fuel a Return to Racial Policies that Deny Homeownership Opportunity and Wealth to African Americans?, published in The Modern American, Volume 6, Issue 1, Spring 2010. From the introduction:
Perhaps the greatest threat to the continued realization of the American dream is the latest economic crisis rooted in the sub-prime mortgage collapse.12 Some blame the CRA of 1977 for creating a market that they claim provided housing loans to noncreditworthy borrowers – particularly African American families – in the low and moderate income range.13 However, this charge is without direct factual support as the post-CRA period saw a decline in homeownership for African Americans but a mild increase for White homeowners.14 Illegal and fraudulent practices in property appraisals and income reporting directed program benefi ts away from those the program was meant to aid. . . .
This paper is written to examine the potential effect of the market collapse on our nation’s homeownership policies. Part I reviews America’s historical housing and homeownership policies. Part II considers the expansion of homeownership opportunities to historically non-participating communities, particularly the African American community. Part III reviews the culprits of the economic crash of 2008 and explains why sub-prime borrowers often get blamed. Part IV examines solutions to maintain America’s pro-homeownership policy, and Part V concludes that America’s homeownership policy should continue to be vigorously pursued with a goal of including African Americans who have long been excluded by government policies and sanctions from building wealth and thereby stabilizing their communities.