For years, it’s been common knowledge in the Twin Cities that our state boasts the worst racial gaps in the country. When you look at the homeownership rate, one of America’s most important metrics, the Minneapolis metro displays terrible disparities in homeownership between Black and white people, a fact that belies the otherwise good Twin Cities statistical news.
The gap persists because housing is a sticky problem that doesn’t seem to move very much from year to year, but a new leader at the Minnesota Homeownership Center has the gap in her sights. After working for a decade at the city of Minneapolis running its homeownership programs, the longtime board member, Roxanne Kimball has stepped up as the president for the organization. She’s excited to tackle Minnesota’s persistent Black-white gap in homeownership rates.
“I’m really excited about the job,” Kimball said. “Affordable homeownership is a big part of sustainability.”
For better and for worse, the United States relies on housing to stand in for economic opportunity and upward mobility. The vast majority of middle-class wealth comes in the form of housing equity, meaning that discriminatory outcomes in the real estate market trickle into the larger society in problematic ways. This is also one reason why urban politics often becomes toxic: Depending on whether one is a renter or not, raising property values can be a good or bad policy goal.
The Homeownership Center focuses on bridging those gaps within the housing system. They offer umbrella support to over 30 smaller nonprofits that empower people left out of the homeownership cycle. One key distinction is that, while every other partner in the homebuying process takes a cut of the transaction in the form of fees or commission, groups that work with the center don’t have a direct stake in the purchase or sale of a home.
Racism and housing
The more I’ve learned about the role that the real estate industry played historically in U.S. history, the worse it seems. In the early 20th century, it was NAREB (National Association of Real Estate Brokers) and other key housing lobbies that institutionalized racism and anti-apartment building quasi-science into city zoning codes and federal underwriting handbooks.
At the same time, the industry pushed hard to undermine attempts by New Deal housing coalitions against government-constructed housing for working class people. The resulting private-market landscape led to anxieties stoked through real estate practices like steering and block-busting which did almost immeasurable damage to the country in the form of racism.
(I say “almost immeasurable” because there have been efforts to quantify the amount lost by these racist policies. A few years ago, one Brookings Institution study estimated $158 billion, though that number seems low to me.)
These days, Minneapolis is one of the worst-case scenarios of those policy decisions, a place where the so-called American Dream has worked wonderfully only for white people.
“The Minnesota homeownership rate for people of color is low, but the homeownership rate overall is very high,” Kimball said. “We have some of the worst racial disparities in homeownership in any of the states — we’re third worst — it’s one of the reasons I was interested in this position, to try and make an impact on that.”
The Minnesota Homeownership Center approaches tackling the gap through a three-pronged approach around education, investment help, and policy changes. On the one hand, a lot of work goes into working with immigrant communities to improve credit scores and awareness around things like interest rates. On the other hand, there are dozens of different funds that can help individuals and families afford homes.
Most notably, as part of its 2023 $1 billion housing bill, the Minnesota Legislature allocated $150 million in funding for first-time homebuyer down payment assistance. It’s something that’s very exciting for center staff. That kind of policy approach is one of the most targeted ways that government can intervene around this long-standing disparity.
“We promote this for the wealth building potential,” said Bill Gray, the stakeholder relations director for the organization. “The idea that a giant part of the population has been deliberately kept out that wealth building opportunity for so long is a problem.”
While both Kimball and Gray admit that homebuying is not for everyone, their group aims to help specifically new homeowners survive the financial pressures that come with maintaining and keeping up a house and yard. Things like foreclosure prevention and access to credit are specifically goals for “housing counselors,” a long-standing governed program that has seen little attention or funding increase over the last few years. Along with other policy details that shape the real estate landscape, that’s one thing Kimball aims to change.
“Some of the things I hear about are condo liability law and how that impacts creating multifamily ownership opportunities,” Kimball said. “When I worked in Minneapolis, we did some great work to create an inclusionary zoning policy that included affordable ownership. Since we created that policy in 2020 there hasn’t been a single ownership unit created in [larger] buildings since 2020.”
Roxanne Kimball wants to find out the policy reasons why those kinds of housing solutions aren’t being built, along with other more innovative housing types such as manufactured housing and land trusts.
For example, mortgage interest creates another unusual barrier to homeownership for Muslim communities, thanks to the religious prescription against loans in the Quran. According to Kimball, it has led many observant Muslims to buy homes using often predatory “contract for deed” arrangements. Kimball points out that there are “non-interest bearing financing” options out there with more rights for purchasers, and correcting that practice is a matter of education.
“We need to have a spectrum of solutions that are helping to address the issue of homeownership,” Kimball explained. “Some folks need education, some folks need some down payment assistance, and some folks need a very deep affordability investment.”
Especially with housing, there is no silver bullet. The takeaway message reminds me of one of Vice President Kamala Harris’ key talking points in the presidential election. She often points to her down payment assistance plan as a key economic plank. The coming election is going to hinge on whether young people relate to these often intimidating decisions, and whether they end up “buying in” to the homeownership ideal in the first place.
Bill Lindeke is a lecturer in Urban Studies at the University of Minnesota’s Department of Geography, Environment and Society. He is the author of multiple books on Twin Cities culture and history, most recently St. Paul: an Urban Biography. Follow Bill on Twitter: @BillLindeke.
