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62 other persons of color and promoted and reinforced housing segregation." In the 1930s, the Federal Housing Administration developed underwriting criteria for mortgages that discriminated against "undesirable" borrowers. At about the same time, the Federal Home Loan Bank Board developed maps that identified entire "undesirable" communities. e Fair Housing Act abolished many discriminatory practices about 50 years ago, but the results of decades of structural inequity have created tremendous racial disparities in housing, and the effect of those practices can still be seen today. e ongoing legacies of housing discrimination have contributed to a significant racial homeownership gap. For Black Americans and Hispanic Americans, homeownership rates lag white Americans by approximately 30% and 25%, respectively. e racial wealth gap is further widened by a persistent undervaluation of homes owned by Black families. According to a Redfin report from earlier this year, homes in Black neighborhoods are undervalued by an average of $46,000 compared to homes in primarily white neighborhoods. is indicates racial bias in the appraisal process—in fact, appraisal bias has gotten worse over time. A recent study of U.S. home values published by Oxford University found that the appraisal gap between Black and white neighborhoods nearly doubled from 1980 to 2015. Because of these and other factors, Black households, a majority of which are living on lower-than-average incomes, are more likely to rent their homes and are therefore more vulnerable to disruptions, instability, eviction, and even homelessness, according to the National Low Income Housing Coalition. Due to pervasive housing segregation, families of color are disproportionately residing in lower-opportunity areas, denying them equal access to quality housing, schools, job opportunities, healthcare, and nutrition. Additionally, minorities experience homelessness and housing instability at significantly higher rates than whites. According to the National Alliance to End Homelessness, Black Americans account for 13% of the general population but more than 40% of the homeless population. Research has shown that housing instability can correlate to a range of negative social outcomes such as poor health, lower academic achievement, and lower economic mobility. e hard truth is that from real estate covenants to exclusionary zoning and redlining neighborhoods to erecting barriers to borrowing, the housing industry—not just the Federal Government—has played a leading role in perpetuating inequities in the nation's housing stock. e way to correct for inequitable practices in the past is to champion equity now and in the future not only for Black Americans who have suffered historical and perpetual discrimination, but all groups that have experienced economic marginalization, including people of color, immigrants, individuals living with disabilities, and LGBTQ+ individuals. WHAT IS EQUITY? e housing finance industry is familiar with equity as an investment term that measures ownership of an asset. However, in recent years another definition of equity has been brought to the forefront of public discourse. Now it is common to hear it used in the context of racial equity, social equity, or health equity. So, what does this use of equity mean? Equity is an approach that ensures everyone fair treatment and access to opportunities. Equity recognizes that advantages and barriers exist and acknowledges that some people begin at an unequal starting place. To ensure equity, we must make a commitment to correct and address the imbalance. is is not the same as equality, which treats everyone equally regardless of their individual circumstances. In fact, equality cannot be achieved without implementing equity. According to Global Citizen, an organization that fights extreme poverty, "in order for the world to reach a place where everything is fair, just, and equal, we need to prioritize equity and distribute resources based on who needs them most." For example, a student who is vision-impaired may need extra help in the classroom to give them the same opportunity of academic success as their peers without disabilities. e Biden administration's Executive Order On Advancing Racial Equity and Memorandum on Redressing Discriminatory Housing Policies acknowledges the deeply problematic practices that have led to systemic inequality for people of color and other underserved groups, and call on government agencies to eliminate systemic barriers to opportunities. is focus on equity is an important differentiation from the policies that have emphasized equality. As we have learned, attempting to achieve equality without first addressing equity is a losing game. Policies that exist to increase access to homeownership for low-income residents by providing down payment assistance, low interest rates, and financial counseling must ensure they are supporting equitable housing outcomes. Organizations such as the National Community Reinvestment Coalition have set a goal of raising the rate of homeownership for Black Americans to 60% in the next 20 years. Achieving that goal will likely require concerted action from government and private industry. It won't be easy but it's not without precedent. In the past six years, the rate of Hispanic and Latino homeownership, for example, has risen from about 45% in 2014 to over 50% today. Understanding what drives that dynamism and how it can be replicated in other communities will help us all in the long run. THE HOUSING INDUSTRY MUST CONFRONT RACIAL INEQUITY Inequities persist, in part, because they often go unrecognized and uninterrogated. As an industry, we have a special obligation to correct the inequities in housing that endure Feature By: Justin Foster & Derek Brummer

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