Root Causes: How Advocates are Tackling Housing Supply to Help Close the Homeownership Gap
While fewer and more expensive houses are a hurdle to some, to minority homeowners they can represent an insurmountable obstacle. And the ripples this creates can last for decades.
by Gabbriel Schivone
REALTORS® are members of the National Association of REALTORS®
Maggie Amado-Tellez, a nonprofit leader and REALTOR®, a member of the National Association of REALTORS®, always aspired to buy her own home. And, once she achieved that dream, she made it her life’s work to ensure others can do the same.
Amado-Tellez’s homeownership goal became a reality through a stroke of luck. When Amado-Tellez, an American, and her husband, a Mexican national, moved to the United States after living in Mexico for years, her father offered to provide the couple with the financial assistance they needed to purchase their home.
“I was very fortunate,” she tells the Daily Beast. But others, she emphasizes — particularly people of color — face formidable obstacles to homeownership related to accessibility, affordability, and financing.
Currently, Amado-Tellez is the executive director of the Pima County Community Land Trust, an Arizona-based organization established following the 2007-2008 housing crisis. It works with low-income families of color to buy their homes at affordable rates, while the land trust owns the land and helps resell their home in the future, if needed.
When Amado-Tellez became the organization’s leader, she was already a REALTOR® with housing expertise and passionate advocate for affordable housing. The National Association of REALTORS® (NAR), a nationwide group of real estate professionals, has given her an edge in her current role. She understands the interplay among the actors involved in the homeownership process — including banks, brokers, and community members — and works holistically to help her clients access affordable homes.
NAR stresses that it’s critical to create a more equitable and accessible housing finance system to increase affordability — a recommendation which Amado-Tellez echoes both in her capacity as a REALTOR® and land trust executive.
Exploring alternative credit scoring models for mortgage qualification, including those that more accurately capture a household’s ability to pay rent on time and make utility payments, could help with financing. Government policies could provide relief to student loan borrowers to ensure that this debt, which has contributed to substantial numbers of young adults living with their parents, doesn’t serve as a barrier to homeownership — especially since high student debt disproportionately impacts people of color.
Amado-Tellez concurs that government action is critical. She emphasizes that not only city and state governments, but the federal government especially, should help finance affordable housing.
In addition to affordability, the availability of housing units themselves are a significant problem. Amado-Tellez’s group is most concerned with filling the “underbuilding gap.” As outlined in a National Association of REALTORS®-commissioned report, America is facing a severe housing underbuilding crisis, with a cumulative supply-demand gap totaling around 6.8 million units. Increased demand, coupled with extremely limited supply, have further driven up housing prices and made homeownership less accessible for everyone.
A multi-pronged approach can help address this gap. Among other initiatives, this includes tax credits to encourage local governments to hasten approval processes for housing construction and zoning, residential construction worker training and hiring incentives, rehabilitation and commercial-to-residential tax credits, and the conversion of underused commercial properties – like hotels, motels, and shopping malls – into multifamily housing units.
Notably, relying on the expertise and community insights of a REALTOR®, a trusted partner who as a member of NAR adheres to the Code of Ethics, is critical for prospective homeowners confronting a widening supply-demand gap that has led to increased prices. “I use [my] knowledge and experience as a REALTOR® every day” to help clients navigate the homeownership process, Amado-Tellez emphasizes via e-mail.
Finally, the government must also ensure a robust and expanded commitment to fair housing enforcement to help guarantee that laws designed to curb discrimination in the housing market are effectively implemented. NAR® advocates for additional funding for federal fair housing enforcement, including grant programs for private fair housing organizations and state civil rights agencies.
Amado-Tellez shares similar views. When it comes to fair housing legislation, “it’s about … putting your money where your mouth is,” she says. “[The] government needs to prioritize this.” While much work is needed to make homeownership access truly equitable, tackling affordability, supply, and fair housing issues will go a long way in helping ensure that more prospective minority homebuyers become homeowners.