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Racial inequities: Black Coloradans often face barriers in homeownership

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AURORA, Colo. — A few years ago, Aurora Warms the Night, an Aurora-based nonprofit serving people who need housing, ran into a challenge when assisting its Black clients in applying for apartments. When the applicants visited properties, landlords denied their applications. This happened over and over again.

So the team decided to take a different approach, sending in White volunteers to check out the apartments first.

“I would send one of our employees or people that were White to look at the apartment — to get the pricing, get everything, to make sure everything was available,” said Brian Arnold, who was executive director of the group at the time five years ago. “After that, we did the application online and sent it in without them being able to see the person.”

Once the application got approved, the team at Aurora Warms the Night would let the real estate agents see the client was Black. Arnold said this process worked almost every time and became the organization’s own way of making a dent in the discrimination that people of color may face, but find difficult to prove.

Because many of the individuals served by the group were facing homelessness and unemployment, Arnold acknowledged that these factors could have played a role in their initial application rejections. However, when they conducted the blind application process with the same financial information, the applications were approved. For Arnold, this confirmed race was a barrier.

“The racism is just so out there,” he said. “It was easy to realize it.”

Arnold’s group did not file any complaints because their main priority was getting their clients housed, and they found a way to do that. Colorado Community Media reached out to Aurora Warms the Night to see if this is still a strategy but did not get a response.

But once a Black client successfully got on a lease, Arnold said even more challenges ensued if they were looking to someday own a home.

“How do we get them from renting into homeownership?” he said. “Those barriers seem to be some of the biggest.”

For decades, homeownership rates for Black people have lagged far behind those for White people. Census data released last month shows just how wide that gap is. More than seven in 10 White Coloradans and a little more than half of Latino residents own their homes, according to the 2021 five-year American Community Survey. Only 42% of Black Coloradans own their homes.

Although Latino homebuyers in Colorado face many of the same barriers as Black homebuyers, their rates of homeownership have grown in recent years. For Black Coloradans, on the other hand, the numbers have remained stubbornly low.

These trends hold across the metro area, with Adams, Jefferson, Arapahoe and Douglas counties all showing higher rates of homeownership in White communities than in those of color.

The reasons for this gap are myriad, but over time, Black Coloradans have generally had less opportunity to build home equity and wealth to pass from one generation to the next. These barriers mean many metro Denver communities lack racial and ethnic diversity. Through training and other measures, many are now trying to reverse this situation and improve access to housing for all.

A denied opportunity to build generational wealth

In 2021, Theo E.J. Wilson and his wife started looking to buy a home in Aurora. Wilson is a Black college lecturer and nonfiction television host.

Like many Coloradans regardless of color, Wilson and his wife did not have enough money for a down payment in today’s expensive housing market, even though they both make a good living. In Arapahoe County, the median sale price of a single-family home increased by $180,000 over the past five years, according to the Colorado Association of Realtors. In other metro Denver areas, the numbers have skyrocketed even more drastically.

While many White Americans may have benefited from the efforts of their ancestors, particularly through inheritances, Wilson says many Black people, including him, were denied that possibility. In his eyes, that’s part of why homeownership has been so elusive.

“In what some of my elders have called the ‘illusion of inclusion,’ income is used as a metric to say that things are getting better for Black people,” Wilson said.

But, he pointed out, income is different from wealth. For generations, “White America was building wealth, assets and the skill set and personnel to manage that wealth,” he said.

Wilson’s older family members, on the other hand, were not offered the same opportunities, he said.

Wilson’s grandfather was in the Army Air Forces during World War II, a Tuskegee airman, one of a pioneering group of Black military aviators. When he returned to New York City after the war, he did not receive federally backed home loans like his White counterparts did.

“They basically shoveled these White vets from World War II into programs that gave them college money and programs that gave them homes in the suburbs,” Wilson said. “Imagine if my grandpa would have got the property that he would have got had he been White in New York City. How much would that be worth today?”

Many Black veterans faced issues using the programs offered by the GI Bill. They often could not access banks for home loans, were excluded from certain neighborhoods and faced segregationist policies. Instead of a home in the suburbs, and despite his service to his country, Wilson’s grandfather wound up in low-income housing. There, he raised Wilson’s father, who was not able to attend college.

“The only physical thing that I have from (my grandfather) besides his DNA is a collection of hats … that shouldn't have been the case,” Wilson said. “I should have more from him than his name, his genes and some hats.”

In that era, federal authorities also made color-coded maps that reflected the practice of restricting access to home loans in certain areas, partly based on race. This practice is known as “redlining.” People of color were also excluded from obtaining housing through “racially restrictive covenants,” or text written into property records that was used to prevent people of certain races from purchasing certain homes.

Some exclusionary policies, which have been documented in the Denver area, left a toll that’s evident in communities of color today.

Family wealth is a good measure of that. In 2019, the median White family in the country had about $184,000 in wealth compared to just $38,000 and $23,000 for the median Hispanic and Black families, respectively. That’s according to data from the Federal Reserve Survey of Consumer Finances.

These numbers speak to the notion of generational wealth. Generational wealth is anything of financial value that is passed from one generation to another — including money, property, investments, valuable heirlooms or businesses.

“Think about the wealth that was created during (the ‘40s and ‘50s) that White families have been able to leverage generation after generation, either to send their kids to college, to be able to start a business, to writing a check for their loved ones to be able to have money for (a) down payment in order to buy their own home and continue that generational wealth transfer,” said Aisha Weeks, managing director at the Dearfield Fund for Black Wealth, a Denver area group that emphasizes homeownership. “That wasn't available in mass for Black and African American families.”

A family’s primary residence is typically their most valuable asset, according to the National Association of Realtors.

It’s not just the monetary value of a house and property that adds to wealth. There are tax benefits for homeowners and people can borrow against a home’s equity to start a business or to help with unexpected bills. Homeownership also provides stable housing, which has been shown to positively impact health and educational achievement. These factors can, in turn, improve a person’s economic prosperity.

Trying to change the equation

The Dearfield Fund for Black Wealth offers down-payment assistance loans with no interest and no monthly payments up to $40,000 or 15% of the purchase price for Black homebuyers.

“We acknowledge that there's a generational wealth gap, and so Dearfield Fund is walking alongside our clients and borrowers to say, ‘We will provide that down-payment assistance,’’' Weeks said. 

This program helped Wilson and his wife buy their home in Aurora.

In addition, the fund also offers advice and education on how to build wealth.

“We know that there are so many pitfalls and just things that, as a community, we have not learned at the dinner table like our counterparts,” Weeks said. “There's a lot of power in the knowledge information transfer that happens within other communities that we need to make sure that families are understanding.”

That issue of being at the proverbial dinner table comes up a lot for communities of color. Without an example to follow, some first-time homebuyers don’t know where to begin. According to Alma Vigil, a local loan officer assistant, families who do not own homes often do not pass along information about how to own and maintain a home.

To address this challenge, the Colorado Housing and Finance Authority offers homebuyer education programs to teach Coloradans financial skills and the steps to homeownership. These classes are offered in English and Spanish in an effort to remedy language barriers, which can add challenges for potential homebuyers who do not speak English.

“There's very (few) Spanish speaking loan officers,” said Vigil, who is Hispanic and speaks Spanish herself. “There are some that claim to speak Spanish, but they're not very fluent. So it becomes a huge problem, especially with lack of understanding.”

In order to close the gaps, some lenders across the metro Denver area provide services in Spanish. A list of Spanish-speaking lenders can be found on the Colorado Housing and Finance Authority’s website.

The issue isn’t just one faced by Hispanic and Latino communities. A report by the National Coalition for Asian Pacific American Community Development found language barriers are also often a challenge for members of the Asian American community when pursuing homeownership. In addition to conversations with lenders, real estate paperwork and documents rarely come in languages other than English.

Debt-to-income ratio

Over the last couple of years, Brandon Stepter, a community consultant, has been working in Broomfield. In an effort to bring more people of color into the community, Stepter looks at housing infrastructure, housing practices and community practices.

Stepter and his wife, Gabrielle, both of whom are Black, have been renting in Aurora but have recently been looking to purchase a home.

“We thought we would be pretty solid in that regard and we both make a decent amount of money,” Stepter said. “We thought we would be able to start looking, even in this market, to try and find an equitable home that fits our budget.”

Stepter, who also works as a healthcare administrator, and his wife, who works for a technology company, said they are trying to figure out how to pay off their student debt so they can get a home loan within the next couple of years.

“I think right now what we’re seeing is a lot of younger African Americans who are in copious amounts of student debt and that has been preventing them from owning a home,” Stepter said.

Debt-to-income ratio is often a significant barrier for Black people who are looking to buy a home because that number is assessed when underwriters are deciding whether or not to give a mortgage, according to Jice Johnson, founder of the Black Business Initiative.

The Black Business Initiative is a Denver-based organization that focuses on economic equity in the Black community.

“In America, you are encouraged to graduate high school and go to college,” Johnson said. “Typically speaking, because you don't have access, when you go to college you're not going to pay for college outright. Instead, you're going to get a student loan … So it increases the debt side of your ratio by a lot, oftentimes preventing you from purchasing a home.”

Black college graduates tend to owe thousands of dollars more in student debt, on average, than their White peers. According to a 2016 report from the Brookings Institution, the amount can exceed $7,000 at the date of graduation.

Black and Hispanic workers also tend to be paid less than their White counterparts, according to many studies on the subject. In 2020, Black workers in Colorado earned 74% and Latino workers in Colorado earned 71% of the hourly earnings of White workers, according to numbers from the 2020 five-year American Community Survey.

“So you go to school, you get the degree, which is what you're supposed to do to get the high-paying job,” Johnson said. “Now you come out and you have debt and also your income isn't as high as it should be. So, your entire debt-to-income ratio doesn't allow for you to purchase a home.”


In a national statistical analysis of more than 2 million conventional mortgage applications for home purchases, a data-based news publication called The Markup found that lenders were 40% more likely to turn down Latino applicants for loans, 50% more likely to deny Asian/Pacific Islander applicants, 70% more likely to deny Native American applicants and 80% more likely to reject Black applicants compared with similar White applicants.

Even for families of color that may not struggle immediately with wealth and knowledge disparities, discrimination persists in the housing market. People of color are often treated differently in appraisals, lending practices and neighborhood options.

Stories about what that looks like in the Denver area abound. Johnson of the Black Business Initiative lived in Westminster before moving to Aurora. When she was staging her home to sell, her real estate agent gave her some advice.

“It was encouraged for me to make sure I had no family photos up,” she said.

Meanwhile, she visited homes for sale that had photos of White families.

Johnson said it was good business advice. Her Black Realtor, Delroy Gill, understood the landscape and was looking out for her.

“That's my Realtor trying to get me top dollar,” she said. “The question is, why would (leaving) my photos prevent me from getting top dollar?”

Gill said the practice of taking down photos removes potential hurdles that could occur for his clients. For Black clients, race is sadly one of those hurdles that could affect how appraisers, inspectors and potential homebuyers view the home, he said.

“We do know racism is a real thing,” he said. “And it exists in every facet of life. So therefore, when you are faced with the unknown, it's better to make the adjustments based on how society is versus taking the risk of creating more damage on Black wealth by them receiving less funds for their homes.”

The advice Gill gave Johnson was not unique. Paige Omohundro, business development manager at the Colorado Housing and Finance Authority said her team heard similar stories in recent focus groups with real estate agents, nonprofits, lenders, housing advocates and people trying to achieve homeownership in Black and African American communities. She said these stories were shared by members of Hispanic and Latino communities as well.

Gill said that because of his precautions, discrimination rarely impacts his clients’ sales. One time, however, the preparation was not enough.

A couple of years ago, Gill was working with an interracial couple to sell their home in Parker. When the appraiser arrived, the Black husband was leaving the property.

“I own investment properties in the area, so I know the area very well,” Gill said. “And I used to live in the neighborhood. So the value that we gave to the house was very appropriate — and the appraisal came in $100,000 less (than our value).”

According to Gill, the buyers, who were White, decided to pay the extra $100,000 out of pocket because they knew the original asking price was fair.

“The agent and the buyers thought that the price was reasonable and that the appraiser made a big mistake,” Gill said. “We tried to dispute the appraisal and failed. He said he's not going to change it.”

Gill said the homebuyers noted that the low appraisal was probably due to racial discrimination.

According to a 2021 study by Freddie Mac, a government-sponsored mortgage-buying company, this experience was not rare. Black and Latino mortgage applicants get lower appraisal values than the contract price more often than White applicants, according to the study.

The study found that, based on over 12 million appraisals from Jan. 1, 2016 to Dec. 31, 2020, 8.6% of Black applicants receive an appraisal value lower than contract price, compared to 6.5% of White applicants. In the study, Freddie Mac said it would be valuable to conduct further research to understand why this gap exists.

In a report by the National Fair Housing Alliance, however, personal stories like that of Gill’s clients make the case that the appraisal gap comes from racial or ethnic discrimination.

One of these stories, originally reported by the Washington Post, was about a mixed-race couple in Denver. An appraiser greeted by the White wife valued the house at $550,000, whereas one greeted by the Black husband valued it at $405,000. The lower value appraisal report explicitly compared the home to others in a nearby predominantly Black neighborhood, even though that’s not where the house was located.

Since 1968, housing discrimination based on race has been illegal under the Fair Housing Act. Nine years before that federal law was signed, Colorado was the first state to pass its own fair housing laws, according to the Colorado Housing and Finance Authority.

Although it is illegal, discrimination in housing based on race or color still happens, according to the Department of Justice. The department has filed cases related to lending discrimination, including a 2012 Wells Fargo case in which the bank was forced to pay a settlement for its pattern of discrimination against qualified Black and African American and Hispanic and Latino borrowers.

There are efforts to change the process. According to the Urban Institute, a nonprofit research organization, 89% of all property appraisers and assessors are White while only 2 percent are Black and 5 percent are Hispanic. Addressing the lack of diversity in the profession could improve outcomes for Black and Hispanic communities, the organization said.

The Appraiser Diversity Initiative, a program led by mortgage-buying companies Fannie Mae and Freddie Mac and civil rights organization the National Urban League, is teaching new potential appraisers with a diversity of identities in an effort to close this gap.

Approaching inclusion in real estate from a wider perspective, a program through the Urban Land Institute Colorado works to train women and people of color in development. This program, called the Real Estate Diversity Initiative, aims to create urban landscapes that serve diverse communities.

“I think trust in community-building is key,” Executive Director Rodney Milton said. “When developers build projects, they need community support because they're shaping the community. And who better to be equipped to strengthen a community, to build it out, to revitalize it, then the folks who are from that community?”

Welcome to Fairhaven

Housing is a source of discrimination complaints. The Colorado Civil Rights Commission Annual report found that 14% of complaints were claims about housing issues. 

Chantal Sundberg, a Black Realtor who works in the metro Denver area, said she has not witnessed or experienced discrimination in her work with her clients, most of whom are Black.

“Everyone is treated equal, whether it's borrowing or buying homes,” she said.

Sundberg witnessed the 1994 Rwandan genocide, when hundreds of thousands of members of a minority ethnic group called the Tutsi were murdered by members of the Hutu ethnic majority. In her eyes, although it might be important to talk about topics of racial discrimination, focusing on them too much can have unintended consequences.

“When we emphasize them so much, it creates more division rather than unity,” she said.

Still, discrimination is an ongoing concern for the National Association of Realtors. Sundberg said Realtors are trained to address discrimination issues.

And to Gill, the Realtor who helped Johnson sell her home, the association’s training is not enough to help all real estate agents.

“Race is a part of it, but it's not the in-depth, you know, ‘how to understand if you're being a racist or not,’” he said.

To address such concerns, the National Association of Realtors released an immersive online simulation in 2020 that aims to train agents to recognize and avoid acting on their own biases.

The program is part of the association’s Fair Housing Act Plan, which leaders created to emphasize accountability and culture change. The training is meant to make housing more accessible and affordable to people of color.

A White Colorado Community Media reporter went through the online simulation, which takes place in a fictional town called Fairhaven. The simulation puts a person in the shoes of potential homebuyers who are experiencing discrimination.

One scenario is based on a federal court case, Clinton-Brown v. Hardick. In 2020, Todd Brown and Ebony Clinton-Brown filed a suit against Helene L. and John Hardick alleging violations of the Fair Housing Act and Rhode Island law. 

The case claims the Hardicks noticed Clinton-Brown’s first name and asked their real estate agent if Ebony was Black. When they learned she was, the Hardicks refused to sell their property and the agent withdrew the listing upon the Hardicks' request, ceasing communication.

Throughout the simulation, agents attempt to theoretically sell four homes within six months while coming across day-to-day happenings including the views of colleagues and encounter issues like language barriers. The simulator provides for moments of reflection in the sales process. At the end of the training, agents are given feedback.

According to Alexia Smokler of the National Association of Realtors, the organization decided to pursue the simulator after a Newsday investigation revealed alleged housing discrimination on Long Island, New York. 

“We wanted to show how discrimination plays out in real life scenarios and so we drew on real fair housing cases and frequently asked questions from our members to create these simulated scenarios so they could see how discrimination looks,” Smokler said. 

Scenarios in the simulation are based on true stories. They include testimonials to show discrimination from the perspective of race, disability and LGBTQ+ identities. 

“We’ve had people tell us watching these videos — they’re very emotional videos — that they are in tears, that they’re angry, that they’re going to stand up for their clients and also we’ve had folks say ‘I wasn’t aware of these sorts of things are going on’ and ‘this has really opened my eyes,’” Smokler said.

Brian Arnold, who used to work with clients at Aurora Warms the Night, said training like Fairhaven could help combat discrimination. But he noted that since the Fairhaven simulation is not a mandatory step in real estate agent licensing, it is challenging to ensure people who need the training actually do it.

“For your … real estate agents that are doing well, that are maybe using discriminatory practices, how are you going to get those people to use it?” Arnold said. “Unless it’s a mandatory (program) ... then it’s just a nice program that’s out there that could help.”

Ellis Arnold contributed to this story.

Tina Griego (Colorado News Collaborative) and Tatiana Flowers (The Colorado Sun) contributed to editing this story.

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