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Buying a House Feels Impossible These Days. Here Are 6 Innovative Paths to Homeownership
Nov 22, 2021 3 mins, 15 secs
The sale price of a median home in the U.S.

These recent issues have been exacerbated by lags in new housing construction over the past twenty years, according to a June report from the National Association of Realtors.

The end result is that millions of American families across the income spectrum are now effectively locked out of homeownership.

Black homeownership, meanwhile, remains at just 45%—30% lower than that of white families and nearly unchanged since 1968, when overt housing discrimination was outlawed.

While hundreds of vacant homes were available in more desirable parts of town, landlords and real estate agents explicitly barred Black families from renting them, and banks blocked Black families from financing.

Housing segregation fueled wealth inequality: Black families in Evanston earn $46,000 less than their white counterparts on average.

The first $400,000 out of that reserve will go to victims of racial housing discrimination and their descendants, divided up into $25,000 grants which can be used this year for down-payments on new homes, mortgage payments or renovations on existing homes.

The average Champlain Housing Trust member keeps their home for 7.5 years and walks away $25,000 richer—money that they can then put toward purchasing more expensive homes on the regular market.

A 2010 Urban Institute analysis of Champlain Housing Trust, founded in 1984, found that 68% of those who left CLT went on to purchase market-rate homes.

Nowhere in the country is the racial housing gap wider than in Minneapolis, Minnesota, where more than 70% of white families own, compared to just 20% of Black families, according to a 2021 Urban Institute report.

One big reason for this disparity is an insufficient supply of affordable homes: the state is 40,000 housing units short of demand, according to a Minnesota Housing Finance Agency estimate.

After the federal government outlawed explicit racial housing discrimination in the 1960s, local lawmakers scrambled to bolster different regulations—namely single-family zoning ordinances that would maintain the homogeneousness of their neighborhoods.

Under those rules, construction companies were banned from building anything other than standalone homes—including more affordable row homes, condominiums, duplexes, triplexes—in most upscale neighborhoods, which had the effect of pricing Black and brown families out of the market.

Lisa Bender, president of Minneapolis’ City Council, argues that changing those rules is “the very bare minimum first thing” that policymakers can do “to fix centuries of racial exclusion.” In 2018, she spearheaded a City Council effort to rescind regulations reserving 70% of the city’s residential land for single-family zoning—a move that could effectively triple the housing supply in some Minneapolis neighborhoods by prompting construction of new, more cost-efficient multi-family units.

In 2017, he cofounded ICON, a construction technologies company that builds affordable, structurally sound, environmentally resilient single-family homes using a 3D printing method that creates far less waste than traditional building processes.

While the startup is just getting off the ground—its first four homes sold this year—its cost of construction appears to be 10-30% less than traditional builders, thanks largely to reductions in labor and supply needs.

Chupp says his company’s lean production model reduces waste by eliminating weather-related damage to materials like is typical during outdoor construction, requires fewer skilled laborers, and significantly reduces the time required to make a home.

In 2017, Hefets started Divvy Homes, a tech company, that offers prospective homebuyers a very similar model.

Divvy purchases homes on the open-market and covers closing costs, taxes, insurance and repairs in exchange for the client paying monthly rent that is approximately 10-25% more than what they would pay for comparable rentals in the area.

But in the last five years, the company has entered partnerships with thousands of families, roughly 47% of whom end up purchasing their home back from Divvy.

In October 2020, she signed a lease with Divvy and less than a year later, she’d bought back her 3-bedroom, 2-bath Georgia home with bank financing thanks to the equity she accrued

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