IRVINE, Calif.--(BUSINESS WIRE)--The Change Company, America’s Community Development Financial Institution (CDFI), announced today the release of “Homeownership, racial segregation, and policy solutions to racial wealth equity,” a new Brookings Institution report sponsored by The Change Company. The report provides an empirical analysis of racial segregation in several cities across the U.S. and explores the role that segregation and subsequent disparities in homeownership, home valuations, and access to banking services play in the growing racial wealth gap.
“The Change Company is proud to partner with a renowned organization like the Brookings Institution to further define and understand housing injustice,” said The Change Company Founder and CEO, Steven Sugarman. “There’s no denying that a racial wealth gap exists in this country, but to fully address the problem we must acknowledge the depth of its roots. The findings in this report can aid in our work to level the playing field for Black, Latino, and underserved communities by helping bring social and racial equity to banking and lending services across the country.”
Report authors Andre Perry and Dr. Rashawn Ray identify a number of factors that place Black families at a disadvantage when it comes to building wealth and argue that policy solutions to issues like access to fair market mortgages and loans, discrimination in appraisals and credit scoring, and increased access to basic banking services are necessary to significantly improve the racial wealth gap.
The report finds that Black residents in the cities studied, face several disadvantages when attempting to become homeowners. In the instances where Black families do own their homes, major disparities exist in home valuations when comparing majority-Black neighborhoods to minority-Black ones, impacting resale values, refinancing opportunities, and other strategies for building wealth through homeownership. Access to basic banking services is another major factor in the existing wealth gap, with 46% of Blacks and 32% of Hispanics considered unbanked or underbanked, limiting options for savings, investment, loans, and other financial services that provide opportunities for wealth generation in these populations.
“This report confirms what we already knew - that equal access to homeownership has yet to be achieved in this country. The Change Company exists in part to address that very issue,” Reverend Everett Bell Jr., Chair of The Change Company Community Board, said. “Investing in research and identifying policy solutions that increase access for Black Americans and other underrepresented groups to fair mortgages, appraisals, underwriting practices, and access to critical banking services is of the utmost importance to The Change Company. As a CDFI, our primary goal is to uplift communities that traditional financial services neglect. To do this at scale and build a roadmap for change, we need to better understand the economic, social and historical inequities that have led us to where we are today and build solutions that will brighten the future for generations to come.”
The Change Company is a CDFI dedicated to helping solve the racial inequities that plague financial services, banking, and lending throughout the United States. In 2020, The Change Company originated 20,000 home loans, 70% of which went to Black, Latino, and other underbanked borrowers, providing fair and essential services to prime borrowers that may otherwise be ignored by traditional bank and mortgage providers.
About The Change Company
The Change Company empowers homeowners, small businesses, and consumers to pursue their American dreams by bringing social and racial equity to banking and lending. The Change Company’s team has built businesses that have lent over $50 billion to over 250,000 borrowers and provided financial services to over two million Americans. For more information, visit us at http://www.ChangeLLC.com and http://www.ChangeFi.com.
About The Brookings Institution
The Brookings Institution is a nonprofit organization devoted to independent research and policy solutions. Its mission is to conduct high-quality, independent research and, based on that research, to provide innovative, practical recommendations for policymakers and the public. The conclusions and recommendations of any Brookings publication are solely those of its authors, and do not reflect the views of the Institution, its management, or its other scholars. Support for this publication was generously provided by The Change Company, LLC. Brookings recognizes that the value it provides is in its absolute commitment to quality, independence, and impact. Activities supported by its donors reflect this commitment.