(Some) Heartening Progress toward Greater Racial Equity in Housing
When something can’t be fixed then the question is: What Can We Build Instead? Mariame Kaba
This is my fourth post this month on housing solutions. My first post on housing solutions focused on grants and tax credits for Black homeowners; the second focused on widespread zoning changes to allow for more housing—and in more places—and, thus, more integrated neighborhoods; the third, on dramatic shifts in federal housing investment. [To access my entire archive of posts, look here: https://levelthefield.substack.com/archive.]
BLUF: Bottom Line Up Front
1. Benchmarking Maryland and Baltimore City for Neighborhood Reinvestment in Urban Areas:
Governor Wes Moore’s $129.5 million UPLIFT initiative aims to reverse the effects of redlining through property rehabilitation and homeownership financing. Baltimore’s $3 billion plan targets 16,000 vacant properties for neighborhood revitalization, setting benchmarks for urban reinvestment nationwide.
2. Combating Appraisal Bias:
Despite being illegal, racial bias in home appraisals persists. Local laws, such as those in New Jersey and Prince George’s County, are combating this through fines and homeowner protections. Federal initiatives, like PAVE, focus on training appraisers and enforcing anti-discrimination measures.
3. Faith-Based Affordable Housing Development:
Black and mixed-race churches collaborate with cities to repurpose land for affordable housing in gentrifying areas, supported by organizations like Enterprise Community Partners and LISC. This approach addresses both housing shortages and the threat of displacement.
4. Restricting Hedge Funds in Housing Markets:
The End Hedge Fund Control of American Homes Act seeks to curb private equity influence in the rental market, capping home ownership and mandating divestment over 10 years. States like New York and Minnesota are implementing similar measures to protect affordable housing availability.
5. Investing in Developers of Color:
Initiatives like Wells Fargo’s $40 million “Growing Diverse Housing Developers” program aim to increase minority representation in real estate development. Expanding these programs could spur affordable housing projects and promote generational wealth in underserved communities.
6. Preventing Displacement in Black Communities:
Policies like Louisville’s Historically Black Neighborhoods Ordinance and DC’s anti-displacement agenda focus on stabilizing housing, protecting tenant rights, and fostering community-based ownership to combat gentrification and corporate exploitation. Federal and local coordination is crucial to sustain these efforts.
State and City Investment in Community Revitalization - Maryland
I’m a big fan of my Maryland governor, Wes Moore.
Racial justice and equity initiatives have permeated a good deal of his administration’s work since coming into office in 2023.
Here is a late 2023 announcement his administration made in housing-related funding that is particularly significant.
Governor Moore announces historic $129.5 million ‘UPLIFT’ project to accelerate homeownership in historically redlined communities - UPLIFT - community revitalization. The governor said in his announcement, “We must actively work to reverse decades of disinvestment through good policy decisions and innovative programs like this one.”[1] One part of UPLIFT is to finance the difference between the appraised value and sales price of properties contending with redlining’s legacy of disinvestment, then choose developers who will build, sell, and rehabilitate housing in targeted neighborhoods (primarily in and around Baltimore and counties just outside Washington D.C.). Check out the specific projects here: 7 revitalization programs-30 projects
Separately in Maryland, the city of Baltimore recently proposed a:
Landmark Multi-billion Dollar Plan to Confront Vacant Housing - Confront Vacant Housing. The City of Baltimore has about 16,000 vacant properties that have accumulated over the last half-century, leaving too many neighborhoods with “dilapidated, abandoned homes or vacant, overgrown lots … [that] threaten public health and safety, drain tax dollars, bring down property values, and make neighbors feel like nobody cares about the neighborhood.”[2]
In late 2023, Baltimore’s Mayor Scott took aim at this massive challenge, announcing a multi-year, proposed a multi-billion dollar investment to confront vacant housing. Until then, the city made an average of $7-8 million per year to address this issue, meaning it would take over a century to address all 16,000 properties.
In 2024, the Scott Administration partnered with Baltimoreans United in Leadership Development and the Greater Baltimore Committee to invest $3 billion over 15 years to restore entire blocks of blighted properties. Scott indicated that the “plan is rooted in equity, justice, and righting historical wrongs.”[3] The plan builds upon the $146 million the administration invested during the pandemic with American Rescue Plan Act funds.
One of the governor’s major UPLIFT programs (above), the Baltimore Vacants Reinvestment Initiative, also contributed $$51 million to rehab vacant city buildings in its Fiscal Year 2025 budget to enhance the mayor’s program.[4]
Maryland and Baltimore set excellent benchmarks for other states and cities to follow for neighborhood reinvestment in urban areas.
Progress: Countering Racial Bias in Home Appraisals
After numerous articles in the national news media in the early 2020s, the Federal Home Loan Mortgage Company (“Freddie Mac”) conducted a study to see if “minorities are more likely to receive an appraisal value that is lower than the contract price during purchase transactions.”[5] They found consistent gaps in home appraisals for Blacks and Latinos, and the gaps increase as the percentage of Blacks and Latinos increases in a neighborhood.”[6]
Even though appraisal discrimination is illegal under federal law, it’s a common occurrence. This is why states like New Jersey (in 2024, NJ Legislation) and jurisdictions like mine have seen the need to pass a bill outlawing home appraisal bias locally to reinforce the law and define a clear path for local homeowners to file a complaint. Fines for a violation in my county can run as high as $10,000. (2023 Prince George's bill)
Also, read here to see local homeowners’ claims that led to the bill being introduced and passed HERE, and see here an article about how a White person posed as the owner of a Black-owned house and received an appraisal nearly $300,000 higher: Appraisal Disparity for a Black Home—NYT.
Note that appraisal discrimination is common despite being illegal under federal law.
RECOMMENDATION: More states, counties, and municipalities should pass similar laws to ensure appraisal bias becomes far less widespread.
Meanwhile, President Biden introduced the Interagency Task Force on Property Appraisal and Valuation Equity (PAVE) to combat racial bias in home appraisals in 2021. A year later, PAVE developed an action plan that “charted out long-term, federally led efforts to end appraisal bias, including fair housing trainings and campaigns, stronger enforcement strategies, and automated valuation tools.”[7] See a summary of recent federal actions HERE (pp. 5-6) and recent progress overall (pp. 19-21).[8]
Another measure to track is training more Black appraisers in an industry that only has two percent Black of Hispanic appraisers. Industry leaders can also work to combat biased appraisals by diversifying the workforce tasked with conducting them. Nearly 90 percent of the home appraiser and assessor workforce is white, while just 2 percent identify as Black or Hispanic.[9] The New York Mortgage Coalition now covers the cost of training materials for Black appraisers in the state. The City of Philadelphia is looking to do the same thing, and the National Fair Housing Training Academy has training focused on reducing racial bias in appraisals.
RECOMMENDATION: More states, cities, and non-profits need to invest in training Black appraisers in their jurisdictions.
III. Housing Development that is Faith Based
In recent years, many Black and mixed-race churches have begun partnering with municipal agencies to change land use regulations so that they can use their properties to develop affordable housing. This is happening in the Washington, D.C., area, Oakland, and Seattle, among other cities around the country. Many are doing so in areas at risk of gentrification and residential displacement. Several churches in the emerging Purple Line corridor in suburban Maryland, where I’ve consulted, are either developing multi-family housing now or seriously considering it.
You can read more about DC, Oakland, and Seattle’s efforts HERE.
The two organizations I spotlighted in my last post – Enterprise Community Partners and LISC – actively work with faith-based organizations around the country to develop and provide affordable housing. Here’s Enterprise’s Faith-Based Development Initiative - FBDI, providing capital, training, technical assistance, and other resources. LISC runs a similar initiative in Alameda County, California, focused on Oakland and surrounding communities—Faith and Housing.
Promotion of the work that ECP and LISC (& others) are organizing should enable far more significant activity and investment in urban areas around the U.S. for affordable housing production on land owned by faith-based organizations.
Essential Moves to Constrain Hedge Funds from Playing in the Residential Rental Market
In March 2024, the U.S. House and Senate introduced The End Hedge Fund Control of American Homes Act. Why? Because of private equity’s unseemly influence in the single-family rental home market for over a decade. The Senate bill would cause large corporations to “divest from their current holdings of single-family homes over 10 years.”[10] It would set a cap on owning no more than 50 homes, with significant taxes to pay for each home in excess of 50, and at ten years, they would no longer be able to own any.
A recent Drexel University study showed that equity investors bought a quarter of the homes purchased in 2021 in Jacksonville and Philadelphia.
Given current trends, and if no laws are in place to stop private equity’s play in the market, it’s projected that by 2030, these companies could own more than 40% of the rental market.[11] These equity firms have entered this market seeking a 15% return for their investors within 3-5 years. All of this is at the expense of tenants who have limited options in most housing markets and end up living in such units.
Some states aren’t waiting for the feds to act. A bill moving through the North Carolina legislature caps corporate entities from owning more than 100 homes in medium-to-large-sized metro areas. Minnesota is considering banning equity firms from converting homes into rental properties.
Just this month, the New York state government leaped into action because, according to Governor Hochul, “shadowy private equity giants are buying up the housing supply in communities across New York, leaving everyday homebuyers with fewer and fewer affordable options.”[12]
Large corporations have recently expanded beyond single-family housing to multifamily apartment buildings, student apartments, and communities for manufactured homes. The target properties are rental ones focused on low-income and working-class residents. PolicyLink argues that tenants need far more robust financial regulations to constrain private equity firms in the rental home market.[13]
Finally, this month, the Department of Justice sued a half-dozen large corporate landlords for alleged illegal price-fixing. These companies manage more than 1.3 million apartment units across almost every state nationwide.[14]
RECOMMENDATION It is time to expel this predatory investment in and acquisition of housing in communities across the U.S., whether through federal action or action by dozens of states.
IV. Investing in Developers of Color
It should be no surprise to us that White people dominate the real estate development industry; in fact, only 5% of real estate developers are people of color, and Black developers are a subset of that 5%. Many developers of color have as one of their goals spurring the development and preservation of affordable housing because they see it, in part, as a strategy to help more people in their communities build generational wealth.[15]
Through a partnership with Capital Impact Partners, Low Income Investment Fund, Raza Development Fund, and the Reinvestment Fund, Wells Fargo launched “Growing Diverse Housing Developers” with $40 million allocated to “several CDFIs across the country to deploy to minority developers with the goal of increasing the number of minority real estate developers in the U.S. business and spurring the development and preservation of affordable housing”[16] in 2023. Fifteen million dollars will provide Black and Latino developers with ‘enterprise funding’ covering operating and administrative expenses.
Capital Impact Partners and the Reinvestment Fund invested in developers in diverse geographies from California, Texas, and Georgia to the New York, DC, Baltimore, and Philadelphia regions, targeting the production of at least 1,500 affordable housing units over six years (2023-2029.[17]
Forty million dollars is a heartening investment, but the scale at which to support the expansion of real estate developers of color nationally will require an order of magnitude more significant funding than this initial outlay.
VII. Ending Displacement of Black Families
What happens to Black neighborhoods when an intentionally neglected community finally begins to see private real estate investment? In too many places, it means Black families get displaced from where they’ve lived for decades, surviving places that were intentionally isolated, starved for resources and amenities, and left to decay.
Many of these places were redlined starting in the 1920s, meaning aspiring Black homeowners could not obtain loans from private banks while aspiring White homeowners in adjacent and nearby, greenlined neighborhoods could achieve homeownership and build wealth. This happened for well over a half-century, and traces of more subtle redlining and disinvestment still occur today in these neighborhoods.
I watched the predominantly White gentrification of ‘chocolate city’ (aka, Washington DC) while I lived in the city from 1988-1999 and worked in the city through 2013. According to the National Community Reinvestment Coalition, more than 20,000 African American residents were displaced from low-income neighborhoods from 2000 to 2013.[18] Another study shows that at least 110,000 Black residents were displaced during the same period. I believe the DC and national estimates are too low.
In places like Atlanta, where large corporate investors own nearly 1/3 of all residential rental properties, which makes homebuying by Black households more challenging than usual while causing a slow emigration out of these Black neighborhoods for too many families being priced out by significantly increasing rents.
The DC Fiscal Policy Institute has outlined a holistic approach to ensuring such displacement doesn’t happen. They propose that for District of Columbia leaders to work toward a more racially and economically equitable DC, they should:
“Quickly stabilize housing for those at risk of immediate displacement.
Invest in housing preservation, not just new production.
Hold landlords accountable to tenants.
Protect the Tenant Opportunity to Purchase Act (TOPA) and bolster programs that make TOPA successful.
Put significant funding toward income and work support programs.
Invest in Black homeownership and community wealth-building opportunities.”[19]
They also advocate for a massive increase to support community-based ownership of housing initiatives. This article explains each of these in significant detail: Community Ownership.
We can also learn from Black residents of Louisville, who banded together to advocate for developers seeking public funds and demonstrate how their projects will retain, not displace residents and businesses.
“The Historically Black Neighborhoods Assembly, a chapter of the Louisville Tenants Union, has been leading the charge for the Historically Black Neighborhoods Ordinance, …
[which at its core] creates a new requirement that any development project in eight designated historically-Black neighborhoods must first pass an assessment proving it will not cause direct or indirect displacement of existing residents or businesses in order to receive any subsidies, discounted sales of public land or other Louisville Metro Government resources as defined in the bill.”[20] (Read more here: Louisville.)Preventing displacement has proven to be extraordinarily difficult in America.
In 2022, the Center for American Progress (CAP) laid out four strategy areas to focus on preventing further displacement in Black and Latino neighborhoods:
Inclusive development (including high-quality training programs, local hire mandates, and project labor agreements)
Neighborhood stabilization (including community land trusts, right of first refusal policies, tenant protections, and rent control)
Housing production (inclusionary zoning regulations, housing trust funds, upzoning policies)
Housing preservation (affordable housing rehabilitation, preservation of unsubsidized affordable housing, measures to strengthen community resilience)[21]
If we’re serious about preventing displacement, much of it, following the guidance and recommendations of policy think tanks like CAP, will need to happen locally. However, wise federal policy could sensibly reinforce this. Read more here: Anti-displacement-CAP.
Footnotes
[1] “Megan Sayles, “Governor Moore announces ‘UPLIFT’ to accelerate homeownership in historically redlined communities,” AFRO.com, December 16, 2023, https://afro.com/governor-moore-announces-uplift-to-accelerate-homeownership-in-historically-redlined-communities/.
[2] “What Can Neighbors Do about Vacant Buildings and Lots?” Center for Community Progress Blog, March 28, 2024, https://communityprogress.org/blog/what-can-neighbors-do-about-vacant-buildings/.
[3] “Mayor Scott’s Approach to Addressing Baltimore’s Vacant Properties at Scale,” City of Baltimore, 2024, https://www.baltimorecity.gov/vacants.
[4] Adam Thompson and Kaicey Baylor, “$50 million funding aims to reduce vacant buildings, create more affordable housing in Baltimore,” CBS News, December 18, 2024, https://www.cbsnews.com/baltimore/news/50-million-funding-aims-to-reduce-vacant-buildings-create-more-affordable-housing-in-baltimore/.
[5] “Racial and Ethnic Valuation Gaps in Home Purchase Appraisals,” Freddie Mac, September 2021, p. 1, https://www.freddiemac.com/fmac-resources/research/pdf/202109-Note-Appraisal-Gap.pdf.
[6] Ibid.
[7] David C. Blount, et al., “Pursuing Housing Justice: Interventions for Impact: Fair and Equitable Appraisals,” Urban Institute, https://www.urban.org/apps/pursuing-housing-justice-interventions-impact/fair-and-equitable-appraisals.
[8] “Action Plan to Advance Property Appraisal and Valuation Equity: Closing the Racial Wealth Gap by Addressing Mis-valuations for Families and Communities of Color,” Interagency Task Force on Property Appraisal and Valuation Equity (PAVE), 2022, pp. 5, 6, 19, 20, 21, https://pave.hud.gov/sites/pave.hud.gov/files/documents/PAVEActionPlan.pdf.
[9] Ibid.
[10] Roshan Abraham, “Meet the Bill To Ban Hedge Funds From Owning Single-Family Homes,” Next City, March 28, 2024, https://nextcity.org/urbanist-news/meet-the-bill-to-ban-hedge-funds-from-owning-single-family-homes.
[11] Ibid.
[12] Anthony Izaguirre, “New York governor wants to limit hedge funds from buying up homes,” ABC News courtesy of the Associated Press, January 9, 2025, https://abcnews.go.com/US/wireStory/new-york-governor-limit-hedge-funds-buying-homes-117521318.
[13] “Securing Housing Justice for All,” PolicyLink, 2024, https://www.policylink.org/federal-policy/securing-housing-justice-for-all.
[14] Heather Vogell, “Justice Department Sues Six of the Nation’s Largest Landlords in Effort to Stop Alleged Price-Fixing in Rental Markets,” ProPublica¸ January 9, 2025, https://www.propublica.org/article/justice-department-sues-landlords-alleged-price-fixing-realpage-rent?
[15] “Why We Need More Real Estate Developers of Color,” from the podcast, CDFI Futures, Net City, April 24, 2024, https://nextcity.org/podcast/why-we-need-more-real-estate-developers-of-color.
[16] Christopher C. Williams, “Fund Gives Minority Developers a Leg Up: Four CDFIs got a $40 million boost.” Next City, April 11, 2023, https://nextcity.org/urbanist-news/fund-gives-minority-developers-a-leg-up.
[17] “Growing Diverse Housing Developers: Expanding Affordable Housing & Supporting Community-rooted Developers,” Capital Impact Partners, https://www.capitalimpact.org/programs/wells-fargo-growing-diverse-housing-developers/.
[18] Katherine Shaver, “D.C. has the highest ‘intensity’ of gentrification of any U.S. city, study says,” The Washington Post, March 19, 2019, https://www.washingtonpost.com/transportation/2019/03/19/study-dc-has-had-highest-intensity-gentrification-any-us-city/.
[19] Eliana Golding, “A Holistic and Reparative Agenda for Ending Displacement in DC,” November 15, 2023,
[20] Oscar Perry Abello, “Louisville’s Black Neighborhoods Want To End Publicly-Funded Displacement,” Next City, August 8, 2023, https://nextcity.org/urbanist-news/louisvilles-black-neighborhoods-want-to-end-publicly-funded-displacement.
[21] Justin Dorazio, “Localized Anti-Displacement Policies: Ways to Combat the Effects of Gentrification and Lack of Affordable Housing,” The Center for American Progress, September 26, 2022, https://www.americanprogress.org/article/localized-anti-displacement-policies/.