In the United States, where you live matters and affects every facet of your life, including a child's ability to attend a well-equipped, high-performing school; breathe clean air; drink unpolluted water; receive quality health care; avoid food deserts; access quality credit; and so much more. Now that the nation'sfair and affordable housing crisis is receiving the attention it deserves, let us not forget the wayshousing discrimination distorts the market, and how lenders and policymakers can advance equitablehomeownership opportunities.
We have lost trillions of dollars in economic growth due to systemic racial inequality. One studyestimates that homes in majority-Black neighborhoods are valued between 21% and 23% of what their valuations would be in non-Black neighborhoods, leading to $162 billion in cumulative losses in 113 metro areas throughout the U.S. Other studies show that improving access to housing credit could have resulted in an additional770,000 Black homeowners,generated billions in local tax revenues andcreated thousands of jobs. These studies demonstrate the need for a national, comprehensive demand and supply strategy to address the nation's skyrocketing housing costs and their continued role in driving inflation so everyday people can obtain the fair housing opportunities they deserve.
Fortunately, there are innovative solutions that would create opportunities for communities of color as well as consumers in underserved, rural neighborhoods, and ultimately grow the economy for everyone. This is where lenders and policymakers can play a critical role.
A large and growing part of the American workforce, Latinos are also the fastest-growing segment of the housing market. A few smart moves by Congress could help them achieve the American Dream while turbocharging the economy.
The Federal Housing Finance Agency should require the Federal Home Loan banks to create equity plans supporting first-generation homebuyers. Congress must also pass legislation to substantially increase the amounts the Home Loan banks devote to housing and community development in exchange for their tremendous taxpayer subsidies.
If mortgage lenders with existing first-time homebuyer programs add first-generation DPA to the programs they could reduce racial homeownership gaps. Often existing first-time homebuyer programs provide insufficient funding and lack flexibility in origination requirements, weakening their effectiveness.
Passing the Neighborhood Homes Investment Act, with fair housing principles added to minimize displacement of current residents of distressed neighborhoods, would provide a tax credit to cover the gap in construction and rehabilitation costs of homes for owner-occupancy and would add 500,000 new and/or rehabilitated affordable homesin urban, suburban and rural communities hardest hit by the Great Recession. This tax credit proposal has broad bipartisan support in Congress.
Ensuring our nation's robust fair housing and lending laws are fully enforced must also be a top priority. According to theNational Fair Housing Alliance 2024 Fair Housing Trends Report, housing discrimination complaints continued their upward trend in 2024. Private, nonprofit fair housing organizations processed over 75% of housing discrimination complaints and need $125 million to provide critical assistance to the victims of housing discrimination.
A focus on supply-side strategies alone will not produce the robust economic growth that is necessary to sustain the housing market, which accounts for nearly 20% of the nation's overall GDP. Communities of color will account for70% of all future household growth, with Latinos accounting for the largest share. Thus, a housing strategy that does not include a focus on these consumers and their tremendous impact on the housing market can lead to market instability.
A combination of demand and supply strategies would address the nation's fair and affordable housing crisis. Together, they could ensure all communities have fairer access to homeownership and its wealth building benefits.
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