Closing the homeownership gap won't happen overnight. But working to preserve affordable housing and collaborating with partners can make a difference, said Susan M. Ifill, executive vice president and chief operating officer for NeighborWorks America. Ifill spoke on a panel, Narrowing the Homeownership Gap, in December, alongside leaders from Fifth Third Bank at the Black and Latino Summit, which the National Minority Community Investment Co-operative hosted.
"Partnerships are key," Ifill said. "There is a system in place that makes it difficult for groups of people to become homeowners." Partnerships, like the one NeighborWorks America has with Fifth Third Bank, "help us break that system," she said. The next barrier is knowledge about how to access homeownership, which homeownership education can help solve. Chipping away at the gap also requires developing more affordable housing, and maintaining, protecting and preserving the stock that's out there.
"Challenges to homeownership are more acute for certain groups," the COO added. According to NeighborWorks America's Housing and Financial Capability Survey, released in July, there is a growing disparity with only 40% of Black people owning homes, representing a drop of 8% from last year, and 46% of Latino or Hispanic people owning homes, a drop of 5%. "We're looking to narrow the wealth gap by focusing on affordability in your living space, whether it's rental or homeownership," Ifill said.
Jill Frondorf, vice president and director of mortgage sales effectiveness at Fifth Third Bank, emphasized Fifth Third's desire to be part of a solution to the housing gap, and said the bank has a goal to increase lending to Black customers by 31% over the next three years. "We're early on in this commitment," she said. "The path we're on right now is looking at each of our markets individually and understanding the uniqueness of those markets." She said it's important to make sure staff represent the communities they serve. Down payment assistance remains a cornerstone.
Earlier this month, Fifth Third announced a $2.8 billion commitment to a program called Accelerating 4 Equity, Equality and Inclusion, focused on addressing systematic issues that impact Black communities and individuals. "This commitment is focused not just on customers but on communities and employees," said Stefanie Steward Young, the panel's moderator, referring to it as "hard work and heart work."
While homeownership isn't for everyone, Ifill still sees it as one of the best ways to build wealth. "If a Black family loses a home or never buys a home, it greatly impacts their ability to hold generational wealth," she said. Without generational wealth, the ability to go to a dream college, or to move when necessary, is hindered. Ifill often says that when the nation gets a cold, black and brown communities get pneumonia. It's important to focus on affordability, to foster opportunities, "and make sure that we are indeed treating the ‘pneumonia' that happens in these communities."
The panelists also addressed the new obstacles forged by the pandemic. NeighborWorks America's network organizations saw a massive shift this year in addressing the needs of their communities, Ifill said. But she was quick to remind the virtual audience that COVID-19 is the pandemic of the moment – there are disasters every year that impact many people and cause setbacks. This one, she said, hit everyone, in every part of the country. "No one is immune."
Ifill said the pandemic prompted NeighborWorks organizations to take on tasks that were not originally part of their core missions. "There are neighborhoods now that have become food deserts. So how do I, if I'm focused on senior housing, shift to that? Well, you have to, because you can't fix one without the other." Ifill said the situation speaks to an overarching conversation that ties the needs together. "You can fix my food issues; you can educate and protect me. But if I don't have a place to live, it is all for naught."
Having people live in affordable homes and improve their homes strengthens the community, she said. "Everyone has a need for housing," she said. A key need? Make that housing affordable.
Young pointed to statistics from the Urban Institute that show a decreasing housing supply at the lower end of the market.
Eva Brown, lending and investment manager for Fifth Third Bank, said that as costs of lower-priced homes rise, would-be homebuyers remain in rental units, and rents rise, too. She pointed to Fifth Third Bank's investments in more than 900 projects that focus on affordable housing, commercial retail and historical buildings as another way to chip away at the gap. "When people can live closer to their jobs, entire communities can reap the benefits," she said.
Frondorf said Fifth Third Bank recognized early that economic fallout from COVID-19 meant their customers needed help. "We wanted to make sure our doors were open when they needed us the most," she said. They started by addressing safety so that customers could continue to visit their offices. "As this trailed on, and has continued trailing on, there were people who have mortgages with Fifth Third who had income issues, who weren't able to make their payments. We did proactive outreach." She said they've reached out to more than 34,000 customers in forbearance programs to see how they were faring and make sure they knew their options.
Like Ifill, Brown stressed the importance of partnerships in building a comprehensive plan. Working with community-based organizations helps generate trust among consumers, she said. So does being a visible part of a community. She spoke of Fifth Third's mobile banking program, "a bank on wheels," that allows the bank to go into communities to talk to residents about credit, the homebuying process, and more. They also held virtual events this year to bring information to consumers, something NeighborWorks America and its nearly 240 network organizations, also achieved. "Despite the pandemic, people are still moving forward, looking forward to achieving their dream of homeownership," Brown said. "We couldn't do that without our community partners."
NeighborWorks network organizations around the country offer homeownership education programs. NeighborWorks organizations are in every state, the District of Columbia, and Puerto Rico.