San Diego, CA (November 13, 2021) – The real estate industry has helped Americans of every background build wealth through homeownership. Yet, for much of the 20th century, many African Americans have been excluded from these opportunities to build intergenerational wealth—and instead have had wealth siphoned away through predatory practices. A conversation on The Past and Future of Family Properties: Overcoming Real Estate's Historic Harms to Communities of Color was held between two experts featured at the 2021 REALTORS® Conference & Expo.
Historian Beryl Satter explained how this exploitation played out in mid-twentieth century Chicago through the story of her father, a Jewish attorney who both owned rental properties and defended Black clients who were targeted by unscrupulous real estate operators.
"You (Realtors®) sell people the single most important thing they will ever purchase. You, therefore, create communities," said Satter. "Those homes help launch the next generation, whether that be through appreciation of the property or passing down the property to a child."
Dr. Satter explained how, in 1950s Chicago, Black residents were confined to an area called the "Black Belt." As their population tripled due to the second Great Migration during World War II, the area became severely overcrowded. But Black people were barred from moving to other neighborhoods due to racially restrictive covenants and other real estate practices. Banks refused to make loans to Black families to buy new, inexpensive homes being built in the suburbs.
Denied access to the credit market, Black families were preyed upon by unscrupulous real estate operators who would sell them homes on installment contract at double or triple the price the property was worth. Families would be responsible for taxes, insurance, and upkeep, but would gain no equity, and the seller would hold the deed. After the seller added impossible charges, the Black family would eventually be evicted, losing all the money they had put in. It is estimated that these practices drained three to four billion dollars from Black Chicagoans from the 1950s to the 1970s.
"To create real change, we need to understand the past and articulate it," said Satter. "Predatory sales to Black buyers have happened over and over. Since the subprime crisis, it went back to the same cycle. Instead allowing history to repeat itself, we must establish good credit practices, help and support communities – not feed on the population."
Mabél Guzmán has been a Realtor® for more than 21 years from Chicago and is the 2020 Vice President of Association Affairs of the National Association of Realtors®, joined Dr. Satter in conversation moderated by Bryan Greene, NAR Vice President of Policy Advocacy.
The three discussed the importance of understanding history in order to frame solutions.
"Disadvantage builds on disadvantage – we need to understand the problems to fix them," said Satter.
Turning to solutions, Guzmán said, "We need to dissect how the system is set up currently. We need to audit FHA, Fannie, Freddie, to see what needs to be corrected and what has been done. Open discussions on how to rebuild these communities is essential …reinvesting in the community, bringing businesses in, building affordable housing. When we say fair housing for all – we mean it. As Realtors®, we need to be true advocates and ask the hard questions."
The National Association of Realtors® is America's largest trade association, representing more than 1.5 million members involved in all aspects of the residential and commercial real estate industries.
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