NEW YORK – The are “deep racial disparities” in homeownership and access to home financing across the state of New York, according to a new study from the New York Attorney General’s office.
Among the report’s top findings is a “stark racial gap” in homeownership rates in every region in New York, with white households owning their homes at nearly double the rate of households of color, the AG’s office stated.
“These disparities are a significant contributor to the racial wealth gap and result in higher housing costs for homebuyers of color, making it harder for communities of color to build lasting financial security and overcome decades of systemic discrimination in the housing market,” the AG’s office said.
Ownership Concentrations
According to the AG, the report found that homeownership in New York is concentrated in white households and neighborhoods. “This trend of lower homeownership rates for people of color is present throughout the state,” the AG report stated.
The report noted that the city of Albany, the state’s capital, has the second-largest gap between white and Black homeownership of any city nationwide, second only to Minneapolis. Across New York, white households are 25% more likely than Asian households to own their home and more than twice as likely as Black or Latino households to own their home.
Barriers Cited
The report also reveals the significant barriers that borrowers of color face when attempting to purchase a home.
“Not only are Black and Latino New Yorkers disproportionately underrepresented among mortgage applicants, all applicants of color are denied mortgages at higher rates than white applicants, regardless of credit score, income, size of the loan, and other factors,” the AG’s office stated. “Even among borrowers with the highest credit scores, non-white mortgage applicants are denied a mortgage at nearly double the rate of white applicants.”
In addition, AG’s report revealed that non-white prospective homebuyers face higher costs than their white counterparts. They are more likely to be charged higher interest rates for their loans, more likely to use costlier Federal Housing Administration loans, and less likely to be approved to refinance their loans to a lower rate.
These added burdens total over $200 million more in interest and other costs over the course of Black and Latino borrowers’ loans, the report states.
Suggested Policy Solutions
According to the AG’s office, the report identifies a number of state-level policy solutions that could help close the racial homeownership gap, including:
- Subsidizing down payments and interest rates for first-generation home buyers — who are disproportionately people of color — to make it easier for families who have never bought a home to get credit
- Increasing state funding to nonprofit financial institutions that can better support communities of color underserved by traditional financial institutions
- Passing the New York Public Banking Act to create a regulatory framework for cities, towns, and regions to establish public banks. These institutions would help expand access to affordable financial services in underserved communities
- Increasing resources for government agencies' fair lending investigations and strengthening New York’s Human Rights Law to expressly prohibit lending practices that have a disparate impact on communities of color
- Exploring options for state-provided banking services at places like libraries and post offices to help reduce the population of New Yorkers who lack adequate access to traditional banking services
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