[music]

Bridget Burgen: It's The Brian Lehrer Show on WNYC. I'm Bridget Burgen from the WNYC and Gothamist newsroom filling in for Brian. New findings from the Black Homeownership Project show that the number of Black homeowner households in the city has declined by 13% over the past 20 years. On top of skyrocketing housing prices, the study found that "unsustainable and predatory mortgage practices" are also at play here and that Black homeowners on average pay more than twice the amount on financing fees. All of this in a housing market that continues to become more and more segregated.

According to the Othering & Belonging Institute at the University of California, Berkeley, New York ranked the ninth most segregated city in the country. If you include Northern New Jersey and Long Island, it's the most segregated metro area in the country. Joining me now to discuss why Black homeownership rates are so low and what can be done to change that is Julian St. Patrick Clayton, deputy director of policy and research at the Center for New York City Neighborhoods, which conducted the Black homeownership project study. Welcome to WNYC, Julian.

Julian St. Patrick Clayton: Hey. Thanks for having me.

Bridget Burgen: Listeners, we want to open the phones right away to you on this one. If you're a Black homeowner in New York City, what has your experience been like buying your home? Do you rent a part of your property to help with mortgage payments? What are some of the challenges you face as a landlord, or if you're looking to buy a home now, what's the home search process been like for you?

Do you feel like you've been able to get all the information you need on home buying or are you looking in the neighborhood in which you're renting or are you trying to move out of the five boroughs? Tweet @BrianLehrer or give us a call now, 646-435-7280. That's 646-435-7280. Julian, for this study, your organization interviewed Black homeowners who described how tough it is to even qualify to buy a home. What sorts of issues were they telling you about?

Julian St. Patrick Clayton: That's a great question. I think that the thing that was brought up most frequently, it's something that's a little hard to track, which was the discrimination that they felt like they faced throughout the process, whether it was through banks or not being able to access accurate information. I think these are some of the barriers that we identified throughout the Black Homeownership Project which essentially I put into three buckets.

You have the first, which is barriers to accessing homeownership and barriers to entry into homeownership. Then the second one was barriers to maintaining one's home. Then the third, and probably one of the most vital ones, were the barriers to actually being able to pass that home on to future generations. I think that across those three buckets, we heard a number of stories from both homeowners, but also housing counselors and brokers that work in New York City. That these were the experiences of Black homeowners and some of the challenges that were faced.

Bridget Burgen: One subset of those issues you listed probably in terms of getting into making your first purchase, your research found that Black borrowers incur the highest financing fees, nearly $14,000 compared to $6,000 for white borrowers who paid the lowest fees on average. Can you talk about those fees? What are they and why are they so subjective?

Julian St. Patrick Clayton: A good deal of that has to deal with how lenders interpret risk. The mortgage underwriting has a bit to do with this, which I think there was a report that came out early this morning that described some of the algorithmic bias there. I think that at the heart of it, we have to come back to the basic idea of how we define risk and lending. Once we see that white borrowers have things that are identified as inherently unrisky behavior, you start to see rates shift. You start to see the offerings of lowered payments, lowered closing costs offered to those who are identified as lower risk.

Some of that is tied up in credit score, and then we look at how do you build credit and the things that go into building credit, and are those things just fundamentally lined up to benefit folks who actually have the institutional know-how on how to build credit. How to build the aspects of one's credit that are flagged by lenders across the nation. I think there's some of that that's involved.

Generally speaking, there's just systemic elements of this that really needs to be rooted out. There's not one cause of this. There's not one answer to it. I think that throughout the Black Homeownership Project, we started to identify that more and more. It wasn't just in New York City. It wasn't just certain neighborhoods in New York City. Identifying it all, trying to work at it all is probably our best bet at overcoming reversing the trend.

Bridget Burgen: Too, I think, shed some light on how some of those systemic issues may have impacted her. We have a homeowner from Crown Heights, Mary in Crown Heights, welcome to WNYC. Thank you so much for calling.

Mary: Thank you for having me on this call. I just want to talk about the cost of homeownership. My family has two houses, one in Crown Heights and one in Bed-Stuy. You have to understand the cost of keeping, maintaining the houses, the renovations, the property tax insurance, the maintenance of it, taking care of it. It's quite expensive. You think you're going to get the money back from renting, but who are you going to rent to?

We've had tenants who just stopped paying for over a year. Then that brings it. If there are organizations that can help current homeowners stay in their home, help them with locating renters who are actually going to pay on time, and so on, I guess background check of them, advising them of how to do your accounting so that you know when you do a renovation, is it going to be a cost-benefit from the rent and so on. There's a lot we need help on. These are some of the problems.

Bridget Burgen: Mary, thank you so much for calling. You previewed some of my questions for Julian. I know a lot of what is covered in their report in terms of what happens when you are a homeowner and how there is. I think what you described in  

your report, Julian, the maintenance deficiency. According to your organization, Black occupant homeowners have the highest proportion of homes with a maintenance deficiency of 35.5%. Can you just explain first what you meant by that and maybe speak to some of what we heard in what Mary was describing?

Julian St. Patrick Clayton: The maintenance efficiency is something that was being tracked by the city that we extrapolated and pulled out from just data that the city has, publicly available data, that tells us that Black homeowners were reporting that they were behind on certain maintenance issues, regular upkeep issues that we recognize comes down to first a cashflow issue, but also being able to procure contractors that do good work and that show up on time and that aren't going to price gouge. Those are some of the things that we help to work on here at the center.

One of the interventions that we propose is called the homeowner and landlord service, where we work with landlords to do tenant mediation. We will help them find the proper outlets for when they want to do maintenance or need to do maintenance and repairs. We hope to attach onto that, with proper funding, an avenue for them to be able to borrow or have grants to do maintenance on their homes. Unfortunately, we're not in a position at this point to help find good and reputable renters for you.

I think that once a landlord takes in a renter, that there will be services that we're able to provide in the near future that would help to repair some of that relationship, which we are hearing constantly has been frayed by the moratoria and the lockdowns. Folks aren't working but we also can't have the one on the street. We have to understand both sides of it, but that has put a strain on that relationship.

The thing that we focused on with the Black Homeownership Project and why focusing on landlords is so important is another thing in that report that Black homeowners account for about a quarter of owner-occupied two to four-family homes in New York. That's the largest share just behind white homeowners who were around 43%. If we're finding that these multi-family units are being occupied by Black homeowners who also live there, we want to make sure that, A, they're in a home that is in good repair for their own sake. Also, B, in good repair and in a good state for their renters who they depend on for income.

The symbiotic relationship that we've noticed here is that renters are frequently reporting that these are owner-occupied homes are also the source of affordable housing. The Black landlords are providing a great rate for their tenants as well. Keeping that relationship alive, keeping the avenue for both income and affordable housing alive is something that we are heavily invested in.

Bridget Burgen: Let's bring in another caller. Lydia in the Bronx, welcome to WNYC. 

Lydia: Hi. Oh, long-time listener, periodic caller.

Bridget Burgen: [laughs] We're glad you called today.

Lydia: It's a battle trying to get onto Brian's show. It's a whole other thing. Anyhow, so here's my deal. My parents died last year. My dad died of COVID. My mom within  

a month of him had died of a heart disease. I lost them both. They left me a little money. I'm an artist and a massage therapist in the city, so I make a little money and I own an HDFC co-op in the Bronx. Once I sell this, I have enough to pay down further a house if I buy it. My guy and I took what we had, went to Upstate looking for a place. We found a place and we were out there immediately. The girl who was going to sell it, it was in Binghamton. Not to make a rush up there, but Binghamton is awesome.

We only started exploring these things recently. We went up to Binghamton, found someone. She offered us the place for $30,000. We were about to sign and someone came and gave her $75,000 for this place that had huge holes and problems. We went on this mission. I referred to it as my Game of Thrones exhibition, my expedition. It was like Game of Thrones. It was crazy. We were being outbid. We saw horrible places that were run down that we would consider fixing up, but they were just showing us the worst. It broke our hearts. We're just sitting down now and just holding off on looking anymore.

Bridget Burgen: Lydia, I'm so sorry for your loss over the past year. Julian, I'm wondering if the story that she's describing in terms of both being outbid for homes that need a lot of work and just not finding homes that are what she's looking for, is that part of what you were hearing and seeing in some of the research that was done for this report?

Julian St. Patrick Clayton: Yes. I wish I could remember this story off the top of my head. We did have a homeowner who eventually found a home that described just that being shown homes that for her credit, for the amount of money she was putting down, she didn't feel really matched what she was looking for and she couldn't understand it. I think she eventually switched and got a different broker and went a different route and found something that she eventually felt was more in line with the type of buyer she was but she felt that there was a certain level of discrimination there. Again, this comes back to one of the things that we heard from a number of homeowners that it's hard to quantify.

It's hard to get your hands around it because you can't track that. There's no way to enter someone's essential dismissal of your desires and where you want to live and what you can afford for showing you something that maybe they feel they can get rid of, inventory that they can move by giving you something that's undesirable. That's part of it. I think that again, we heard it. I would love to be able to track that in some way in the future.

The other side of it, and sorry, I don't mean to belabor my answer here, but we a number of years ago did a cash buyer report where we saw exactly this. That cash buyers would frequently swoop in and outbid. Frankly, even if the bid was the same, having that money in cash today continued to pull sellers away from prospective Black home buyers time and time again. It's the city over. I think there might be non-Black home buyers that have experienced the same phenomenon.

It's one that I don't know how you address it in the systemic way that it exists other than to create a new affordable housing model that really targets working and

middle-class home buyers first. Something that we prioritize here at the center in doing that targeting those communities for homes that we can get them into to help stabilize neighborhoods, to help combat some elements of gentrification. Again, sorry for your loss, Lydia. I'm sorry to hear that. Hopefully, you find a home that's suitable for you. I hear Binghamton is lovely.

Bridget Burgen: I was there recently. It is lovely, especially this time of year. We are speaking with Julian St. Patrick Clayton, deputy director of policy and research at the Center for New York City Neighborhoods which conducted a study on Black homeownership and how it's declining here in New York City. Listeners, we want to hear from you. We are talking particularly to Black homeowners about what your experience has been buying your home, whether you rent part of your property, what challenges you face there. Do you feel like you've been able to get the information you need? We have time to take a few more callers. The number is 646-435-7280 or you can tweet @BrianLehrer.

I want to go back for a moment. Julian, as we were talking about the buying process and obviously the lending process, the investigative news site The Markup just published a story this morning that found that BIPOC homeowners are much more likely to be denied a mortgage than white buyers with similar financial characteristics. For Black home buyers, they wrote that quote, lenders were 80% more likely to reject Black applicants than similar white applicants. Those numbers are just absolutely eye-popping and devastating. They called it, "a secret bias in the algorithm". The stats from that story are national. I think you've alluded to how you see that playing out here in New York City too.

Julian St. Patrick Clayton: Absolutely. Algorithmic bias is something that we identified a couple of years back. I've worked to now be in place to have a platform that we are currently building out that aims to undo that. We call it Underwriting for Good. It's a program that we are running at the center here that essentially looks to build on borrowers' credit strengths. I talked about how some of the aspects of credit that we look at don't really play to the strengths of LMI home buyers and Black home buyers.

I think that we are looking to essentially build an algorithm that is inherently anti-racist, where we are looking at a prospective home buyer holistically and looking at all that they can provide looking at the positives and not just ways to detract them to either saddle them with the higher rate or essentially cap where they're able to buy by offering them less money than they might currently need to make the purchase.

Bridget Burgen: I want to bring in another caller with a question. Louise in Toms River, welcome to WNYC.

Louise: Good morning, guys. Thank you for taking my call. Very important topic. I just would like to know the flip side of the redlining and keeping the Black and Brown people down in reference to the real estate market, et cetera, not being able to afford it. All the systemic racism that has a history already with America period, and the real estate agonism and all that good stuff, that goes back forever. What are we doing

now currently in order--

Now that the world is awoken, let's say, or wants to do better as far as humanity and being kind, what are we doing legislatively to help the Black and Brown buy more real estate, get involved with real estate? Is there corporations or nonprofits that are actually working towards, "Let's move forward. We know what the problem is, how can we make this move on for our future generations?"? I'll take my answer offline. Thank you.

Bridget Burgen: Louise, thank you so much. Julian, any legislative or sounds like public-private partnership type strategies that address some of the redlining in those types of issues that Louise was raising?

Julian St. Patrick Clayton: Yes. There's good news in this bad news here. The good news is that you have national advocacy groups who are coming together to work on this. There is a collective group called the Black Homeownership Collaborative that is looking at exactly this from a nationwide perspective and advocating for federal-level changes to address these systemic issues and reversing these decades-old trends from redlining to pre-FHA discrimination. The bad news is that this is still a little ways out. I think that there are organizations like the Center for New York City Neighborhoods and others from around the country that are beginning our talks.

We're trying to get all the practitioners on the same page so that we're all working on the same things collectively together. That is still a loose conglomeration of individuals and individual organizations that are trying to address a massive problem. We alone can not close the racial wealth gap though we will try our hardest to do so. I think that our caller is correct in that there needs to be a nationwide attempt and a nationwide dedication to doing this.

Again, some of it is still in its infancy. That means that the hardships aren't going to be eliminated or erased within the next year. That doesn't mean that we can't start to lay down the foundations to doing so. There are a number of individuals who some of them represent New York State in Congress that are dedicated to housing issues and homeownership issues. We will continue at the center to advocate for pushing our elected officials down that road.

There are individuals in the state legislature that are looking at even enacting parts of what the Black Homeownership Project proposed as part of state legislation, one thing being the tenant opportunity to purchase where if a homeowner landlord decides that they're going to sell their property, that tenants will have an opportunity to come in and collectivize and buy that property and then, therefore, become homeowners themselves. There are avenues here for progress, there are avenues here for shrinking the racial wealth gap. It will take a large dedicated effort of like-minded individuals coming together to do so.

Bridget Burgen: I want to try to get in one more caller. Raven in Manhattan, welcome to WNYC.

Raven: Thank you so much. It's my first time, I listen all the time to the show. My question is, what type of financial help or legal representation is there for Black homeowners? For example, we lost our property as a result because what they're doing, they have predatory buyers who look at this. They bring contracts in all kinds of things for you to sign not knowing that you're signing away your property. That happened to a family member of ours. It was a multi-million dollar property that they lost. We don't know. Is there a way to repossess this property seeing that it's done under those conditions?

It's very serious and it's something that is happening quite a lot in the Harlem area. Now you see gentrification. That's one of the ways in which a lot of white buyers are getting to the Black families because they see an opening there. They say that they cannot maintain an upkeep and they steal it without the Black owners profiting in any way. This is very serious and I want to know where is there the legal help, where is there to help for them to maintain the homes because they cannot be competitive in attracting tenants into their buildings as well?

Bridget Burgen: Raven, thank you. I think you raised a couple of really important issues there. Julian, I think first that the issue of, it sounds like essentially prospecting, people trying to come in and scoop property up from underneath Black homeowners. Also this idea of what do you do? Where do you turn to for help? Are there legal avenues available? I'm wondering if you could comment on both of those. The extent to which you heard similar stories to what Raven described with her own family experienced and what options might be out there to help them.

Julian St. Patrick Clayton: Yes. There's a lot to unpack here. First I'd say this, the center does a lot of this work, anti-scam. Working with homeowners and families to keep their property, we look out for scams. We have legal services and homeowners services organizations that report up to us what they hear on the ground so that we can take a city-wide approach to combating some of these scams. It's funny because New York City's homeownership population of Black families is 18%. 18% of homeowners in New York City are Black. Those same homeowners make up 60% of the clients at the center in trying to buy and keep their homes.

It's folks who are facing these issues and they disproportionately tend to be Black. I myself, as a personal anecdote, I'm from the Bronx. I grew up in Soundview, but I'm proud to call Harlem my adopted home. Time and time again at community board and any gathering you heard these same stories of home buyers and longtime Black home buyers in Harlem and other longtime Black neighborhoods talk about this same exact issue of scammers or folks coming when they find them in a cash crunch and offer to help them with some financial strait that they're in not realizing that they're trying to buy their home from under them.

One more plug for the Black Homeownership project, one intervention that we identified was generation to generation state planning. This idea of being able to transfer your home onto the next generation and onto other family members that you want to inherit your home. Proper estate planning is a key to that. It's one of the things that we are going to be piloting this year into next to help combat some of that.  

I think the last piece that I'll mention here is that the state is also being pushed to do something about this. There's anti-speculation let's station that's being considered.

There are flip taxes being considered in order to combat some of this speculative action where people come in thinking that they can acquire property cheaply to then flip it on the market and make a killing off of some predatory scheme. I feel for those who are in certain neighborhoods that are undergoing gentrification or undergoing just rapid speculation because they are being preyed upon not just by folks who may be reputable developers, but also by folks who were scammers who were just looking to undermine their position and take, as the caller said, multi-million dollar properties from underneath them.

Bridget Burgen: Just in our final moment, for people who are considering home buying or selling, any plugs you want to make for good resources where they can get information so that they can avoid these types of scams, they can avoid being taken advantage of to the extent that they can despite systemic problems in the entire process?

Julian St. Patrick Clayton: Yes. I'd be remiss if I didn't plug the Center for New York City Neighborhoods.

Bridget Burgen: That's right.

[chuckling]

Julian St. Patrick Clayton: I think that we have a network of, like I said, legal services, housing counselors that do pre-purchase work, that do post-purchase work. I'm sorry we didn't get a chance to talk about post-purchase counseling, how to help folks who, after they actually acquired a home, figure out how to maintain the home throughout their ownership lifespan. Cnycn.org, that's the center's website. Also if you want to call our hotline, 646-786-0888, we can refer you to any of the nonprofit partners that we work with that are on the ground in every borough, in every neighborhood in New York City to try to help them get their questions answered.

Right now we are seeing eviction crises. We are anticipating and hopefully, we can get around it, but a foreclosure crisis where folks really need to have answers and access to information and assistance that is out there. There's ERAP, there's Home Ownership Fund or HOF as some folks call it, there's the Home Ownership Protection Program from the state. There are services. I think getting the word out, getting folks to know that there are resources, please do call in. There are a number of folks who would love to take your call and help you find the resources and the help that you need.

Bridget Burgen: We're going to have to leave it there for today. My guest has been Julian St. Patrick Clayton, deputy director of policy and research at the Center for New York City Neighborhoods, which conducted the Black Homeownership Project study. Thank you so much for coming on and for those suggestions and resources.

Julian St. Patrick Clayton: Thank you so much.

Copyright © 2021 New York Public Radio. All rights reserved. Visit our website terms of use at www.wnyc.org for further information.

New York Public Radio transcripts are created on a rush deadline, often by contractors. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of New York Public Radio’s programming is the audio record.