The Racial Wealth Gap and Home Ownership

Netflix-ExplainedIn my recent post on “The Racial Wealth Gap,” I mentioned a growing number of articles and videos on this issue, but said I thought the best of these was 16-minute film The Racial Wealth Gap, the very first episode in the Netflix original series Explained.  It begins by saying that in The U.S. slaves were wealth, images of them even appearing on confederate money.  By 1863 they were worth $3 billion dollars—or, in 2018 money, $83 billion.  They made even more money for their owners, of course, all which those owners got to keep, none of which the slaves did.  There were free blacks who fared better—488,o7o of them, which represented just under 11% of the total black population in, as scholar Henry Louis Gates puts it, “that tumultuous year Lincoln got elected.”


By then most blacks had been enslaved for 241 years, with vanishing small chances for building durable wealth.  It looked like things might turn around when, in January 1865, as the Civil War was ending, General William Tecumseh Sherman asked a group of prominent blacks what they most needed to build themselves up.  Rev. Garrison Frasier, the leader of that group said, “Land.”  So Sherman instigated Special Field Order #15, giving a black family “40 acres of tillable land.”  Lincoln signed it into law two days before his Second Inauguration.  Soon after he was dead.  Soon after that, President Andrew Johnson reversed course with language asserting that this represented discrimination against whites.  That language has never lost its hold in much of white America, and is more intensively alive for some today than it was 150 years ago.

So from 1619 to the Emancipation Proclamation in 1863 (244 years) slavery was legal.  From 1865 to the Fair Housing Act of 1968 (103 years) segregation was legal, even considering the landmark Brown vs. School Board case in 1954.  And even though LBJ’s groundbreaking act outlawed such real estate practices as red-lining, the effects of red-lining are clearly alive today, and in some ways still in nearly full practice.  That is, after 347 years of slavery and legal segregation, racial segregation is still baked into a host of policies—business, federal, legal—that systemically hold back the majority of black people.

Blacks-Homes2Netflix’s Explained: The Racial Wealth Gap offers a wide and integrated view of all this information, and near the end even touches the issue of black reparations, a bold—perhaps unwise—choice.  For those who do not see, understand, or experience systemic racism, making reparations to a whole race seems a fantastical, even indecent, proposal.  The strength of this Netflix film is it’s explanation of how the inability to own homes, or own homes that will appreciate in value fairly, has widened the wealth gap—and, by implication, could be one of the best ways to start closing it.  Or at least to retard its rapidly increasing growth.

In 1970 the home ownership gap was wide: 21.3%, with 62.9% of whites owning homes, but only 41.6% of blacks.  This doesn’t tell the whole story, as many of those black homes—because of red-lining—were of poorer quality and in poorer neighborhoods, all of which made them worth less and appreciate less.  Furthermore, in the run-up to the great financial crisis of 2008, blacks—who just wanted equal access to normal loans—were more than twice as likely to be given risky subprime loans.  They were intentional targets for being coaxed into subprime loans that made banks and brokers billions.  Even if they had the same credit score as whites, 1 in 5 blacks still got subprime loans.  As we generally acknowledge now, and movies like The Big Short dramatize, those subprime loans fueled the 2008 crisis.  In that crisis many black communities lost upwards of 53% of their wealth.  American household wealth declined by $13 trillion, with a much greater percentage of this suffered by black families, of course.  And Wells Fargo—one of many banks pushing subprimes hard?: a $175 million fine—barely a slap on the wrist.

LBJ signs the Fair Housing Act, 1968

LBJ signs the Fair Housing Act, 1968

The median household wealth for whites is $171,000.  For blacks $17,600.  Nearly ten times less.  And since, for most Americans, 62% of wealth is tied to the home they own, it makes sense to try to get more and more poorer families into homes.  In 10 years, home owners will have 12 times the wealth of non-homeowners.  Unlike just a monetary investment, which Explained: The Racial Wealth Gap also says would build wealth—$100 in 1863 growing to $3,584,970 in 2018—a home also adds stability.  Home owners tend to stay in neighborhoods 4 times longer, thus getting more involved, and also creating educational stability that results in a 25% higher high school graduation rate, and an astonishing 115% higher college graduation rate.

TNP-Logo1This has been a post of lots of stats, and many of those in the paragraph above have been used to promote the work of what started as our family’s foundation.  When Rick and Desiree Guzman started Bryan House as a living memorial to Rick’s youngest brother, Bryan Emmanuel Guzman, it was for the express purpose of helping those who had been granted official refugee status buy their first home.  Bryan House became Emmanuel House, now reaching out not just to refugees, but to all the working poor.  It’s now The Neighbor Project, with a reach 4 times that of Emmanuel House.  Seen in its widest context, The Neighbor Project works to decrease the wealth gap, racial and otherwise, and create a more equitable society for all of us.

  Lorraine Hansberry’s famous play A Raisin in the Sun dramatizes her family’s struggle to escape red-lining and buy a home in a white neighborhood.  Read more about that Here.

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Searching for Prophets

Luke4Below is a VIDEO of a sermon I preached on January 28, 2019, concerning how to listen for prophetic voices and act within the prophetic tradition by comforting and advocating for the poor, the oppressed, and the captive.  These were the people Jesus focused on as he announced, in Luke 4: 14-21, that He was that prophet for whom people had long been waiting.  It is one of Scripture’s most famous passages.  “The Spirit of the Lord is upon me,” He said, quoting the prophet Isaiah, “because he has anointed me to proclaim good news to the poor…freedom for the prisoners…recovery of sight to the blind, to set the oppressed free….”  I hope, in what follows, that the power of these words and the core of my concern will not be lost if I spend most of my time here correcting an error I made.

SERMON CORRECTION:  Near the end I quoted a statistic in error.  I said 99.6% of the benefits of the recent tax cut would go to the top 1%.  I simply grabbed the wrong note as I was rushing out the door that Sunday morning.  That figure from the non-partisan Tax Policy Center (TPC) came from an analysis of a tax proposal Speaker Paul Ryan put up during the 2016 Presidential campaign in an attempt to put specific figures to the various plans being floated by his party, especially candidate Trump.  The tax cut plan finally passed still gives the lion’s share to the top 1% of American earners, but the percentage that seems to be floating around in most analyses, liberal or conservative, is more around 82%.  Most analyses base this figure on the TPC’s analysis of the actual tax cut passed by Congress.  TPC’s analysis also shows that at the beginning of the ten-year tax cut plan, most Americans benefit, but as the years pass most Americans benefit less and less, and many in the middle-income brackets will actually see a tax increase.  This is partly because, as currently written, tax cuts for corporations are permanent, but tax cuts for LordAnointindividuals are set to expire in 2027.  At the end of the tax cut plan, about 82% of the benefits will be going to the top 1%.  Conservative analysts therefore have tended to emphasize the beginning of the plan where most of us benefit—some a little, the top 1% much more—while liberal analysts have tended to emphasize the plan’s final years.  It’s possible that cuts for individuals might be renewed at the end ten years, maybe even made permanent, but this has a significant cost.  Already the cuts explode the nation’s deficit by some $1.5 trillion, and this would only get worse if the present plan continues in anything near its present form.  You can download the TPC analysis of the tax plan—about a 33 page pdf—from the  TPC website or, what will probably be easier to follow, read analyses based on this report from a variety of sources including The Washington Post, The Wall Street Journal, Forbes, Fortune, and many others.  Just type in something like “How much of tax cut goes to top 1%” into your browsers.  Opinions vary widely, of course, some saying that the top 1% should get the lion’s share of the breaks, since they pay the lion’s share of taxes.  Others, with whom I tend to agree more, say that increasing the income and wealth gap, which the tax cut does, is finally not good for our democracy.  Neither is an exploding deficit.  Though I’ve never been a deficit hawk, the size and rate of the increase has begun to worry even me.

I regret my error, made in haste, but analysis of the tax cut was not at the heart of what I wanted to say anyway, though its effects are pertinent.  My main concern was really the increasing wealth gap in the United States and the effects this will have on the poor.  Those in poverty will need more and more of our attention in the future, as they will fall further and further behind (along with much of the lower middle class, and even some in the middle middle class).  That was the main point I wish I had made clearer.  If we can do anything to bring comfort to those who will be in these declining positions, or even help reverse the declines, we will partake in some of the prophetic duties Jesus announced in the fourth chapter of the Gospel of Luke.

  For more on income inequality see “Graphic Inequality” and “The Racial Wealth Gap.” The latter (and its follow up pieces “Home Ownership and the Racial Wealth Gap” and “Reparations and the Racial Wealth Gap”) touches on home ownership issues which are at the heart of groups like our “family’s” foundation Emmanuel House—which started as Bryan House and is now The Neighbor Project.  I use quotes around “family” because The Neighbor project has gone far beyond our family now.  It’s part of a national network of organizations whose work, in essence, closes the wealth gap through home ownership, the quickest way to do this in the U.S. at present.

  OTHER SERMONS:  “Pentecost Means No ‘Supremacies,’” “Sacred Doing,” “It’s Not What You Know But Who You Know,” “Elijah: The Growth of a Prophet” …

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The Racial Wealth Gap

Every time I see a headline like the one below—”Racial Bias Among EMTs?”—I’m almost never surprised any more.  I have a big stack of reports from the Chicago Tribune detailing facts that black people, especially, get the poorest health care and education and job opportunities, are stopped unfairly by police and go to jail in hugely disproportionate numbers, also unfairly, are more harshly punished in school, etc. etc. etc.  I like using the Trib because it leans conservative—way conservative, some would say—so the reports can’t be accused of liberal bias.


Racism persists for very deep reasons.  James Baldwin has written about its roots in our symbolic reaction to the color black itself, and to our inability to deal with the real complexities of our humanity.  Less deep than these, though, are reasons most may not see because—unless you’re black—your chances of experiencing, say, unequal treatment from EMTs is so much lower you’ll probably never experience it at all.  Many whites will also tend to look at blacks as a whole and see large numbers of them living in the poorest neighborhoods, holding the lowest jobs, achieving at levels far below others.  They will tend to think that its been some years since Emancipation, why have blacks made so little progress.  One answer is institutional or systemic racism—attitudes and policies baked into the normal ways we do things every single day—which keep blacks from really accessing the opportunities they need.  This may also be difficult to understand if you’re not on the receiving end of it.

Blacks-Homes2Now, however, more and more people are becoming aware of growing income inequality and the growing wealth gap in the United States.  Bill Clinton’s colorful campaign strategist James Carville coined the slogan “The economy, stupid!” and dollars and cents seem to get through to people quicker than anything else.

There are any number of YouTube videos on the Racial Wealth Gap: lectures, interviews, animations, even one which attempts to explain it in 60 seconds.  I invite you to check these out.  But for me, the best video comes not from YouTube but Netflix.  The very first episode in its series Explained is a 16-minute film on The Racial Wealth Gap.  Near the beginning the film notes that the median white household’s net wealth is $171,000, but only $17,600 for black households—nearly 10 times less.  And since, on average, two-thirds of a family’s wealth comes from their home, home ownership is this short film’s central concern, a concern very prominent on this website.

When Rick and Desiree Guzman started a foundation, Emmanuel House, to honor the memory of Rick’s youngest brother, Bryan Emmanuel Guzman, its focus was on getting the working poor out of poverty through education, community involvement, equitable development—all these, yes—but mainly through home ownership, which adds a wealth and stability that makes all those other things more possible.  When Emmanuel House merged with long-time partner The Joseph Corporation, it became The Neighbor Project and more than tripled its capacity to get people into their first homes, or stay in the homes they were already in.

In another post, I’ll detail how Netflix’s Explained: The Racial Wealth Gap presents the black family’s fight to gain equal housing opportunity, and thus beginning building wealth.  It’s a fight of titanic proportions and titanically unequal odds. First of all, blacks start nearly 350 years behind whites, legally speaking, but still continue struggling to be let in to the housing market even to this day.

  Go to another article on Income Inequality, “Graphic Inequality,” and to two follow-up articles to this post: “Home Ownership and the Racial Wealth Gap” and “Reparations and the Racial Wealth Gap.”

  Watch my sermon “Searching for Prophets,” which touches on issues related to income inequality and the wealth gap.

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