It’s long been established that one of the most secure ways to build generational wealth is through real estate. Families purchase a home, that property appreciates in value, and over the years it becomes a stable source of equity that can be passed down. This allows future generations to buy their own homes and repeat the cycle. But for many people, particularly in the Black community, this means of building wealth was specifically cut off from them through the use of racially restrictive housing covenants. Now, the Washington state legislature is looking for new ways to address the lingering effects of these historic restrictions and help new generations of Black homeowners find security in generational wealth.
Although the Fair Housing Act was passed in 1968 to specifically outlaw housing discrimination, by that time the legacy of the racially restrictive covenants of the 1920s-40s had already made it nearly impossible for many Black families to own homes, or at least to own homes in neighborhoods with appreciating home values. Having their access to home ownership restricted meant that many Black families were unable to build equity and in turn assist their children and family members in the purchase of their own homes.
The effects of this are still felt today — according to 2020 census data, in Washington state only 34% of Black families own their homes, compared to 68% of white families. Additionally, the median income for white families in King County is almost double that of Black households, so that Black renters are more likely to be rent-burdened, making it harder to save up for a down payment on a house.
To address these historic and ongoing disparities, the Washington state Legislature is proposing House Bill 1474, which would create new down-payment and closing-cost assistance for first-time homebuyers in the state who either were excluded by the racist covenants or are the descendants of those affected.
The new proposal would be available for first-time homebuyers who make 100% or less of area median income — about $107,000 for a family of three in King County. The participants would receive loans to cover their purchase costs, which would be repaid when they sell their homes.
A $100 fee on documents recorded using county auditors would be used to fund the program. The fee would go into effect in January 2024, and loan assistance would be available starting in July 2024. The proposal does not specify how much individual homebuyers can receive from the program.
While the bill is receiving some pushback due to the new fee and the volatility of the home market and the amount of revenue it would be able to raise, it is a necessary step in addressing the historic marginalization of the Black community in Seattle and other areas in the state. Even if it does pass, there remains more work to be done in making access to our region’s housing market more equitable.
This post was based on a Seattle Times article by Heidi Groover.