California's Reparations: It's All A Matter Of (Home) Equity
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From Cal Matters:

California launches reparations task force

JUNE 2, 2021

California kicked off a two-year study into how the state might compensate African Americans for slavery and its lingering effects on Tuesday, when a newly formed reparations committee met for the first time.

The first-in-the-nation committee is the result of Gov. Gavin Newsom last year signing a bill authored by then-Assemblymember Shirley Weber, whom he subsequently appointed as California’s first Black secretary of state. The nine-member task force will draft an apology to Black Californians and recommend ways the state might make up for discriminatory policies

Such as California’s long history of slavery and Jim Crow.

, which could include issuing direct payments to the descendants of enslaved people or passing laws to close racial disparities.

State Sen. Steven Bradford, a Gardena Democrat and member of the reparations committee: “It might mean free college at our CSU and our UC systems to African Americans. It might be zero down payment for first time African American homeowners. We know they have the biggest challenge in homeownership, not only in California but across this nation.”

State lawmakers have zeroed in on homeownership as one of the main ways to close the wealth gap between Black and white Californians.

Like I’ve been saying, when they talk about “equity,” what they really mean is they want your equity in your home.

On Tuesday, the Assembly and Senate unveiled a joint spending plan — which they’ll use to negotiate with Newsom ahead of the June 15 deadline to pass a budget — that proposes developing a program in which the state would pay for, and own, up to 45% of a home. That would cut the purchase price nearly in half, allowing more families to buy homes and build wealth, lawmakers say.

From Cal Matters last month:

What California lawmakers could do to boost homeownership for Black families

MAY 17, 2021

… California is in a deep housing crisis that has made it nearly impossible for many to afford rent, let alone buy a house. That crisis is, in part, the result of a decade of housing supply not keeping up with demand. But for communities of color, and especially Black people, housing is less an emergency than a chronic illness compounded by centuries of discriminatory, if not outright racist, policies. …

Following the growth of the Black Lives Matter movement and a growing recognition of America’s racist past, “equity” has become one of the hottest buzzwords at the state Capitol. But equity is a loaded term, and it means different things to different people.

By law, the state can’t favor any one racial group over another. So racial equity often gets addressed through measures that aim to level the economic playing field. …

Redlining systematically denied loans on homes in predominantly Black neighborhoods. New highways bulldozed through thriving Black communities, while urban renewal destroyed struggling areas. Changes in zoning from multifamily to single family homes allowed white neighborhoods to exclude Black residents from moving in. During the 2008 housing crisis, lenders pushed risky subprime loans more aggressively to Black people, who lost their homes in hundreds of thousands of foreclosures, according to a recent report by the Terner Center for Housing Innovation at UC Berkeley.

In other words, lenders used to be biased against blacks and wouldn’t give them loans. That was bad. In recent decades, lenders were biased in favor of blacks, and that was bad, too. It’s almost as if FDR were right in thinking renting tended to be better for blacks than buying.

In California today, about 63% of non-Hispanic white families own their homes. Only around 36% of Black households can say the same, a gap that has actually widened since housing discrimination was officially outlawed with the Fair Housing Act of 1968.

Funny how that worked.

Even when Black families own their homes, they are typically worth less. A recent study by Brookings found that on average, owner-occupied homes in Black neighborhoods are undervalued by $48,000, adding up to $156 billion in cumulative losses.

It must be the tragic dirt in Compton. After all, who ever heard of anybody from Compton doing anything that might hurt home values?

The median white family in the United States now has more than eight times the wealth of the median Black family. In Los Angeles, one study found Black and Mexican households hold only 1% of the wealth of whites households.

One significant way to narrow this gap, many California lawmakers agree, is by making it easier for people to buy a home. The challenge: Research by the California Association of Realtors shows that less than a fifth of Black Californians could afford to buy a median-priced home last year, compared with about two-fifths of white households.

A recent study by California Forward, a nonprofit advocacy group, found a gap totaling $61.8 billion between the home prices that low- to moderate income California households can afford and the typical home prices where they live. Latino, Black and Native American Californians were disproportionately represented in that gap.

… Aside from the need for down payment assistance, Black people disproportionately suffer from poor debt-to-credit ratios, which make it difficult to buy a house through any program. That’s because people of color have long been flooded with predatory loans and excluded from the lending system

“people of color have long been flooded with predatory loans and excluded from the lending system” … uh …

, said Maeve Elise Brown, executive director of Housing and Economic Rights Advocates in Oakland.

“There are scored differentials based on race in our country, which are inextricably tied to a historic lack of access to credit or being force-fed onerous credit,” she said.

It’s either one or the other.

Senate Democrats have a more radical idea. Under their pandemic recovery budget blueprint released last month, the state would partner with first-time homebuyers to buy through what they’re dubbing “California Dream for All.” The state would pay, and own, up to 45% of the home, cutting the purchase price for people by nearly half. For example, a family could buy a $400,000 home for $220,000 under the program.

So they want to give you $180k to buy a home, assuming you are the right race?

The money would come from a yet-unspecified revolving fund set up by the state, with shares sold to investors. As home values increase, so would the value of the shares.

So, when you stop paying, is the state of California going to foreclose, evict you and take your home? I know it sounds inconceivable, but what if there is disparate impact and more blacks get foreclosed upon than Asians?

The Democrats have proposed commissioning the state treasurer to hash out the program in greater detail and present it back to the Legislature for approval in 2022.

Money printer go brrrrrrr …

The expansion in homeowner aid would disproportionately favor low-income communities of color who most need the help, allowing the state to “circle around” the constitutional provisions that bar the state from considering race in programs, said Muhammad Alameldin, economic equity fellow at the Greenlining Institute in Oakland.

In other words, we are being completely straightforward about how the intent of this program is to trash Proposition 209’s ban on racial preferences in California government programs, but we don’t even need to lie about what we are doing because we are the Good Guys.

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