Generational Wealth, Black Homeownership & Maintaining Equity After Disasters
The opening visual in Rick Rojas recent piece on the impact of disasters in poorer Black neighborhoods in Houston is jarring and heartbreaking: a 59-year-old homeowner keeps an opossom trap under the table. Some of the rooms in her home lack floors. Black mold grows in abundance up the walls. This is a home her father built, her inheritance and one meant for future generations as well.
All this, damage from Hurricane Harvey four years ago. All this, compounded by Winter Storm Uri just six weeks ago.
The real estate brokerage firm Redfin recently released a study connecting the impact of redlining to neighborhoods now in more immediate danger for flooding and other disasters. The generational wealth meant to accrue through homeownership is, as is the case for homeowners in Rojas’s story, threatened by the frequency and impact of disasters associated with climate change.
Many of those impacted by Winter Storm Uri still hadn’t received HUD funding for their Harvey damage. It’s a historically slow process but even more so in this case as the question of who was in charge toggled between city and state.
To minimize the impacts of delay we’re seeing play out for Hurricane Harvey survivors who are now doubly impacted with another storm, HUD should work with state governments to enable Recovery Acceleration Funds (RAF) — home repair loans to qualified homeowners who are likely to receive HUD assistance in the future but cannot afford to self-fund repairs today.
A RAF will create access to private funding (non-profits, impact investors and philanthropic investment) to make critical home repairs for low-to-moderate-income families. The lending activities can run through local community development financial institutions and minority-owned lending institutions, attracting and retaining new forms of capital in devastated communities while simultaneously supporting eligible rebuilding costs for qualified low-income homeowners.
The loans, repaid when HUD funding becomes available, offer myriad benefits for those who need the funding right now. Faster rebuilding helps quickly restore and preserve equity in homes. This is particularly crucial in Black communities where a greater percentage of net-worth is tied to, and where generational wealth transfer relies upon, the value of the home.
It also reduces the strain on local, affordable housing stock by more quickly returning families to the homes they own — preventing survivors from the financial strain of paying rent and mortgage while they wait on substantial repair assistance from HUD in the distant future. Importantly, homes weakened by a storm could be more quickly restored and strengthened before the next one that comes along.
Clients of ours like Mardie P., in Houston’s historic Independent Heights neighborhood, used garbage bags to stay warm during Uri. Afterwards, she was without water for weeks. Her home — built by her father, where she grew up — remains damaged by Hurricane Harvey. Damage that is now compounded by Uri. Had her Harvey funding come in earlier — or had she had access to something like RAF — she could have repaired her home so that it would be more resilient and better withstand the impacts of Uri.
RAF would ensure greater equity in the disaster recovery process and go a long way in retaining home equity after disasters so that generational homes are indeed the inheritance they were meant to be.
