ABOVE PHOTO: Councilman Kenyatta Johnson
By Councilman Kenyatta Johnson
(Phila. D-2nd Dist.)
Banks are closing the door to the American Dream of homeownership to African Americans and other people of color in Philadelphia. New evidence suggests banks, mortgage companies and even federal housing laws are the cause of a growing racial gap in Philadelphia’s home loan market. It is harder for a Black family to buy a home in Philadelphia than in dozens of cities in the United States where these financial institutions are following redlining practices unseen since the 1930s.
A new report by the Center for Investigative Reporting found these practices are driving the kind of gentrification now facing too many longtime residents of our neighborhoods. Philadelphia’s home loan market has some of the worst racial gaps of 61 US cities. While White homebuyers obtained 10 times as many conventional mortgages as Black applicants, African-Americans were 2.7 times more likely to be denied a loan. Local housing advocates find African-American and Latino families are often forced into more expensive FHA loans or left vulnerable to predatory lenders. The homeownership gap is bigger today than it has been since the Jim Crow era.
These discriminatory practices have major consequences for African-American families. Building financial stability depends in large part on your ability to buy a house. The most important part of the average American family’s wealth profile is the value of their home. The new findings echo the conclusions of recent research conducted by the Economic Policy Institute. They examined progress since the landmark Kerner Commission report issued 50 years ago, and found the Black homeownership rate unchanged in half a decade, still trailing nearly 30 points behind the rate for White families.
TD Bank–America’s “most convenient bank” has been identified as one of the worst offenders. African Americans are “more likely to be turned down” by TD than any other mortgage lender in the nation.
The banking industry acknowledges these unacceptable racial gaps in lending. But if, as they insist, this gap is due to financial factors like credit scores, let them prove it. I have called for a hearing on Thursday, March 29th at 10AM at City Hall (Room 400) to examine disparities in bank lending practices in Philadelphia’s home loan market.
Philadelphia is in the midst of a housing boom but it may come at a cost that is too high if it takes us back to a time described by the Kerner Commission where our nation is again “moving toward two societies, one Black, one White —separate and unequal”.
Councilman Kenyatta Johnson represents the 2nd District, which covers parts of Center City, South and Southwest Philadelphia and also includes the stadium area, Philadelphia International Airport, the Navy Yard and the Eastwick, Grays Ferry, Hawthorne and Point Breeze neighborhoods.