(Editor’s note: this is a post Jeffrey Hayward, Fannie Mae’s Executive Vice President and Chief Administrative Officer, published after the announcement of the three-year Equitable Housing Finance Plan that outlines actions the company will take to knock down barriers faced by Black renters and homeowners.)
In April 1968, President Lyndon B. Johnson signed the Fair Housing Act, which guaranteed equal access to housing for all. At the signing ceremony, Johnson told the packed White House East Room, “We have come some of the way, not near all of it. There is much yet to do.”
LBJ’s note of hope, tempered by frustration, still resonates today.
The Fair Housing Act sought to end legal discrimination in housing. But more than 50 years later, the vast gap in homeownership rates between Black and white people remains, as do many disparities in economic and social well-being that are tied to homeownership.
In fact, in many ways that gap has widened. The Black homeownership rate today is stuck at around 42%, the same as in 1970. Meanwhile, the white homeownership rate was at 66% in 1970 and rose to 72% by 2019. We estimate that if this racial gap were closed, our country would have about 4.7 million more Black homeowners.
Other indicators of Black economic well-being tell a similar story. From 1989 to 2019, the median net worth of Black households grew from $15,500 to $24,100. But during that same time period, white household median net worth rose more than $45,000, to $189,100.
Throughout much of our nation’s history, Black people were denied full access to housing and homeownership because of their skin color and ancestry. One example is legalized redlining that effectively closed the regulated and subsidized housing finance system to whole swaths of the Black community during the post-World War II era. Black people were free to want the American Dream, but largely denied the means to have it.
We at Fannie Mae believe this racist legacy is one of the root causes of economic disparity in our country. The gap in generational wealth between white and Black populations today is rooted in this discriminatory past. To ignore this — to pretend that our history does not affect our country’s present and future — is not only wrong, it’s also economically destructive. Our country is less affluent, and our economy less vibrant, because of this past. Our future will be brighter if we take real steps to recognize and redress it.
For Fannie Mae, which plays a large role in a mortgage market that is the bedrock of our housing system, our choice is clear: We must begin to knock down barriers to homeownership and the wealth it can build in order to repair the harm done to generations of Black families.