As the prospect of home ownership for many becomes more like a mirage than even a faint hope, organizations around the country are thinking far outside the box to develop innovative housing models and approaches to financing to help families buy or remain in their homes.
           
Nine were recognized in a presentation organized by the Economic Architecture Project and Brookings Institution in Washington, DC. The theme of the event was Valuing Homes in Black Communities but the practical approaches to overcoming obstacles to homeownership had broad applications. “Some of them are very early-stage innovations. Some of them are quite advanced, some are policy based, some are market based,” said Brookings President Cecilia Rouse.
           
Several are non-profits that work with homeowners or lenders to address the financial gaps between them. Others are small private companies that are tackling the problem by offering unusual financing options like using the equity in a house as a source of capital or digital tokens to achieve ownership.
           
The event was inspired by a recent Brookings study that showed that homes in Black majority neighborhoods are undervalued by an average of 23% ($48,000 each) compared to similar neighborhoods with fewer Black residents. Cumulatively, this undervaluation amounted to a loss of $156 billion in equity, the study calculated.
           
Maryland is attempting to address this inequity and decades of disinvestment through the Just Communities Act, a law pushed by Governor Wes Moore and enacted in April 2024. It gives priority to resources for communities that have been historically disadvantaged by redlining, exclusionary zoning and environmental hazards. The state law is the first of its kind in the nation, according to Cat Goughnour, Assistant Secretary, Just Communities, in the Maryland Department of Housing and Community Development. It emphasizes working with grassroots communities to solve problems while also sending a signal to the private sector to make changes. “A legal approach, in my opinion, is more powerful than a policy approach in that it is enshrined in law, and will be more difficult to roll back,” Goughnour said.
           
Property taxes are another problem especially acute in low-income Black neighborhoods, said Doug Ryan, vice president for housing policy with Grounded Solutions Network. “Addressing the inequities in how we assess properties is fundamental to advancing home ownership,” he said. “Black homes and Black communities are under-appraised. Similarly, they are over-assessed in the tax base. That is a double whammy of inequality and it is something we need to address.” Higher taxes also limit opportunities for wealth building in low-income communities, he added.

Gabe Ewing del Rio, President and CEO of the non-profit Homeownership Council of America (HCA), described its work to expand homeownership for underserved communities. HCA works with investors, lenders, and related nonprofits on first mortgage and downpayment assistance programs. HCA operates both a loan product and a grant program, with no interest charge.

“We provide technical assistance to lenders around the country and our innovation was to apply that to downpayment assistance, knowing that this is a massive barrier to homeownership,” said Del Rio, noting the lack of generational wealth in communities of color. Banks making loans, in turn, can earn a better return on investment as well as comply with the Community Reinvestment Act, which requires banks to help meet the credit needs of low and moderate-income communities.