The History of Affordable Housing is Black History
Perica Bell, Head of Preservation, April Housing
Each February, Black History Month serves as a time to honor the achievements of Black Americans and a reminder that Black history is American history. As we wrap Black History Month, it is important to understand how the history of affordable housing has played an essential role in the complex history of Black Americans.
The federal government has long been an architect of affordable housing in the United States, using both its legislative and executive authorities to meet the housing needs of Americans.
This first began in the early 1930s, when the federal government created residential construction and finance programs to alleviate housing scarcity caused by the Great Depression. In 1934, Congress passed the National Housing Act, establishing the Federal Housing Administration (FHA), making home ownership affordable for a broader set of Americans through the creation of mortgage insurance programs. These programs created the low-down payments and long-term fixed rate mortgages that are common today but were almost unheard of at the time. Homeownership became, for those able to access these programs, a catalyst for building wealth and savings used to start businesses, pay for secondary education, and provide a financial safety net. Black Americans, however, were prevented from receiving these same future-changing benefits. Areas where Black Americans lived were “redlined” and deemed unsafe for lending. Citing this risk, the FHA refused to insure loans in redlined communities, and private lenders across the country emulated this practice.
Throughout the 1940s and 1950s, governments at all levels continued to create and endorse exclusionary practices that barred Black Americans from participating in affordable housing programs. Racially restrictive covenants, for example, or racial clauses in deeds kept Black families from leaving redlined communities and buying homes in “lendable” White communities. This practice was adopted and accelerated by private lenders as the subsidization of suburban communities began to take off. These clauses, while unenforceable today, can still be found in home deeds in communities across the country.
The 1944 Servicemen’s Readjustment Act known to most as the “GI Bill” was transformational in lifting the middle class and subsidizing a range of benefits to returning WWII veterans – including affordable housing. Although the programs were seemingly open to all veterans, Black veterans were often excluded from the government benefits by private lenders in charge of implementing the programs.
This deliberate exclusion of Black Americans from affordable homeownership opportunities resulted in Black Americans being disproportionately renters. Often, the only housing available to Black Americans was poor in quality and especially unsuitable for families and children. Housing options were concentrated in the poorest areas with limited proximity to schools, jobs, economically active areas or suburban communities.
Through the public housing program, the federal government entered the rental market by providing affordable housing for low-income renters. For those that could access it, public housing was a significant improvement but, over time, funding for public housing programs began to decline, culminating in the backlog of deferred maintenance for existing buildings that persists in some communities today.
Black Americans challenged these realities and refused to accept them as permanent truths. They believed that they, like other Americans, were deserving of equal access to high-quality affordable housing. Across the country, Black Americans stood in court rooms, voting booths, and participated in peaceful protest to challenge the legality and morality of these actions and demanded access to decent affordable housing. In fact, affordable housing was a core component of the Civil Rights movement’s economic justice agenda. From 1965-1966, Dr. King co-led Chicago’s Freedom Movement, a yearlong campaign for affordable and open access to housing in Chicago’s most segregated neighborhoods.
In 1968, in the wake of Dr. King’s assassination, Congress passed the Fair Housing Act. During debate for the bill, Senator Edward Brooke of Massachusetts, the first Black US Senator to be elected by popular vote, spoke passionately about his own inability to obtain decent and affordable housing after his return from WW II. This landmark achievement was the last of a package of civil rights bills championed by Dr. King. After decades of housing discrimination, the law marked the ending of housing discrimination in the for sale and for rent markets on the basis of race, sex, religion, and national origin.
Congress would go on to create a number of programs to leverage private investment to create new affordable rental housing. These programs would have moderate success through the 1970s but led to a net loss in affordable units as affordability programs through HUD expired over time. The need for high-quality affordable housing for America’s low-income renters had not been met. Despite incentives to create new affordable housing, preservation and keeping units affordable in perpetuity remained a challenge.
The 1986 Tax Reform Act created the Low-Income Housing Tax Credit (LIHTC), a national framework for how affordable housing is financed, built, and preserved. Through federal income tax credits, the federal government incentivizes private capital to work with both for-profit and non-profit developers to build and operate long-term affordable housing. In exchange for tax credits, owners agree to keep rents affordable (defined as 30% of income for residents earning up to 60% of area median income), ensuring that low and middle-income families have high-quality affordable housing. Ensuring that LIHTC households pay no more than 30% of their income on rent provides not only stability in housing costs, but also, the opportunity to save for down payments or pay down debt on the pathway to homeownership. Since its inception, the program has created 3.6 million affordable housing units and is the most effective public-private partnership in U.S. history for the creation of affordable housing.
At April Housing, our mission is to preserve and create high-quality affordable housing throughout the United States. We own and operate a portfolio of more than 80,000 low-income housing tax credit apartments. As the Chief Preservation Officer, I work each day with our for-profit, non-profit and government partners, lenders, and other stakeholders to ensure that we are delivering on this mandate.
The need for affordable housing has never been greater. Due to legacy impacts of exclusionary housing practices, Black Americans are disproportionately likely to be renters (58 percent of Black Americans are renters versus 28 percent White). The National Association of Realtors estimate that half of Black American renter households spend more than 30 percent of their monthly income on rent. April Housing is committed to identifying innovative solutions to preserve and expand the affordable housing stock in the US.
Black history and affordable housing are deeply connected. Never forgetting that history makes us better owners, better operators, and will ensure that we are delivering on our mission of providing high quality rental housing that all Americans have access to and can be proud of.