With her popularity on the rise following the Democratic presidential debates last month, California Senator Kamala Harris has announced a $100 billion housing plan aimed at closing the gap in household wealth between whites and African-Americans and Latinos.
Previous federal housing programs and the damage wrought by the 2008 financial crisis show why.
The case for helping black families in the housing market has some historical justification: blacks faced discrimination in getting mortgages ensured by the Federal Housing Administration, were locked out of certain housing markets, and suffered the loss of homes that they did own to the eminent-domain policies of urban renewal and public housing.
As the National Low-Income Housing Coalition reports, "Since 2007, nearly 8 percent of African Americans and Latinos have lost their homes to foreclosure compared to 4.5 percent of non-Hispanic whites at similar income levels. The disparity ratio shows that African Americans are more than 70 percent more likely to have been foreclosed upon than non-Hispanic whites."
The key protection against foreclosure-which Harris wants to remove from the equation-is a down payment, based on thrift and savings, the traits that typically make for successful homeownership.
Historically, default and delinquency rates among borrowers with loans insured by the Federal Housing Administration-which has long required low down payments-are higher than those for so-called conventional borrowers.
Select neighborhoods where blacks had previously faced discrimination were targeted-just as Harris has proposed to focus her housing plan on "Formerly red-lined" neighborhoods.
https://www.city-journal.org/kamala-harris-housing-plan
Previous federal housing programs and the damage wrought by the 2008 financial crisis show why.
The case for helping black families in the housing market has some historical justification: blacks faced discrimination in getting mortgages ensured by the Federal Housing Administration, were locked out of certain housing markets, and suffered the loss of homes that they did own to the eminent-domain policies of urban renewal and public housing.
As the National Low-Income Housing Coalition reports, "Since 2007, nearly 8 percent of African Americans and Latinos have lost their homes to foreclosure compared to 4.5 percent of non-Hispanic whites at similar income levels. The disparity ratio shows that African Americans are more than 70 percent more likely to have been foreclosed upon than non-Hispanic whites."
The key protection against foreclosure-which Harris wants to remove from the equation-is a down payment, based on thrift and savings, the traits that typically make for successful homeownership.
Historically, default and delinquency rates among borrowers with loans insured by the Federal Housing Administration-which has long required low down payments-are higher than those for so-called conventional borrowers.
Select neighborhoods where blacks had previously faced discrimination were targeted-just as Harris has proposed to focus her housing plan on "Formerly red-lined" neighborhoods.
https://www.city-journal.org/kamala-harris-housing-plan
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