The real estate industry is working to change its path



Earlier this summer, a day before the first-ever federal holiday of June 19 in the United States, Marcia Fudge, Secretary of the Department of Housing and Urban Development, stood on the podium in Cleveland and made a bold promise: by 2030, 3 million new black homeowners in the United States States.

An initiative called 3by30, is a project of the Black Homeownership Collaborative, a coalition committed to transforming the real estate industry that has been involved in Red line, housing discrimination and discrepancies in assessments based on racial motivation

This gambit has been in development for over a year. In May 2020, triggered by the assassination of George Floyd in Minneapolis, the United States saw the largest protests against racial justice since the civil rights movement. The real estate industry immediately showed its solidarity. Among the sea of ​​black Instagram squares that filled our timeline for #Blackout Tuesday brokers, bankers, appraisers and real estate executives pledged reform last summer. But while some of these good intentions have already faded, many in the real estate industry are deploying projects to keep their word.

The American Community Survey estimates that there were about 6.45 million black homeowners in 2019, with a homeowner rate of 42 percent, well below 73 percent for whites. The Institute of Urban Studies estimates that adding 3 million new black homeowners by 2030 would bring the share of black homeowners to 57.5 percent.

Last November, Charlie Oppler, President of the National Association of Realtors, issued public apology for the myriad ways in which the association has promoted housing discrimination, including initially opposing the Fair Housing Act 1968 by agents. In the months that followed, they introduced a new Fair Housing Action Plan and a range of grants focused on diversity. And while trying to suggest concrete steps for change to local agencies, they also laid out a four-point road map this serves as a guide to expanding coverage.

Bickel Fresnelle, an Atlanta-based broker, served as chair of the national association’s diversity committee for 2020 and helped write this roadmap. “We don’t see this as white people training,” she said. “This is a workout for everyone.”

Ms. Fresnelle, 51, who is Black by birth, says the significant momentum now being felt in real estate began with a statement from Mr. Oppler. “I get a little emotional when I talk about it because I was so excited that NAR just said, ‘Hey, we can hear you,’” she said.

Association leaders also serve on the Black Homeownership Collaborative steering committee. They share this space with representatives of the Mortgage Bankers Association; NAACP; The National Alliance for Fair Housing; National Housing Conference, National Urban League and Urban Institute; and the National Association of Real Estate Brokers, an organization of blacks that was founded in 1947 because they were expelled from the NAR.

The National Association of Real Estate Brokers, which calls itself the oldest minority real estate association in the United States, has also partnered with Homelight, a real estate referral company from San Francisco, in a separate project called Black Real Estate Program

This program will provide 10 aspiring black real estate professionals with a $ 5,000 scholarship for licensing, occupation, and marketing, as well as a personal mentor from the association.

“It is more likely that a black realtor will be able to advise and help those who live in their area become homeowners,” said Sumant Sridharan, chief executive of Homelight. “The goal is to increase black home ownership.”

To achieve this, black brokers need support, said the association’s interim executive director C. Renee Wilson. “Mentoring is a key component of recipients’ success in understanding and learning to deliver services that are relevant and unique to the Black experience,” she wrote in an email. “Increasing the number of blacks in real estate at all levels is necessary to eradicate the systemic racism that has plagued the housing industry for years.”

Dave Jones, a black broker based in Tacoma, Washington, said the changes he has seen over the past year give him “cautiously optimism” that long-term reform is within reach.

“Last summer, the whole world stopped so we could at least talk,” he said. “But for this to happen, not only realtors are needed. It will also affect lenders, the mortgage industry, appraisers and their relationships with each other. ”

Last year, lenders and appraisers introduced their own anti-racism programs.

JPMorgan Chase released in October $ 30 Billion Commitment racial equality, including an expanded minority homebuyer subsidy program to help 40,000 black or Hispanic families buy a home over the next five years. PeerStreet, an online marketplace for real estate investors, has created District Development Support Fund, a donor-sponsored fund to provide real estate down-payments for aspiring black real estate investors.

“We have a vast network of knowledge and the ability to pool capital, so let’s find a way to direct this business where it is needed most,” said Bruy Johnson, chief executive of PeerStreet.

In the appraisal industry where nearly 97 percent of appraisers are whiteLeaders in the field initially refused to acknowledge bias following a series of damning reports in 2020 about racial discrimination in assessments.

But the Appraisal Foundation, which sets national standards for real estate appraisal, has since added its first black member to its appraisal qualification board. They have also launched a number of new diversity initiatives.

One such initiative is Couple, an acronym for Practical Real Estate Appraisal, is a program that has the potential to help budding appraisers get around the long-standing requirement for appraisers to find a mentor for the job.

“The vast majority of evaluators are white men, so if you put people of color in a position where they need to find a white person to train them, it really becomes a barrier to entry for many people,” said James Park, executive director. The Appraisal Subcommittee, an independent federal agency created in 1989 to oversee the regulation of appraisers.

But despite PAREA’s endorsement nine months ago, Park said, “There have been no programs yet.”

David Bunton, president of the Appraisal Foundation, said in an email that the delay lies with state governments, which had to first adopt state guidelines before the program could begin. Mr Bunton also highlighted a number of additional new diversity programs undertaken by the foundation, including a survey of guidelines for equitable housing and a demographic survey of appraisers.

It remains to be seen if these programs will move the needle. In October 2020, the Evaluation Subcommittee offered the Evaluation Fund a three-year grant of $ 3 million, which included support for work on diversity as well as a review of PAREA’s performance. The grant was rejected.

“We were disappointed,” said Mr. Park. “The foundation accepts grants from the subcommittee for 30 years.” (Mr Bunton said the grant was turned down because “we were financially stable during the pandemic,” adding that the fund had asked for funds to go to states in financial difficulty.)

No matter how many new initiatives debut, many black brokers say the real shift won’t come until the racial gap in home ownership is closed.

“The solution lies in black leadership and home ownership,” said Laurie Pace, a Denver-based broker. “Title deeds are a form of reimbursement for 40 acres that were not delivered.”

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