The racial wealth gap may be widening during the pandemic. Even before the public health crisis, the data showed the median household income for whites is 10 times greater than for Blacks ($171,000 and $17,100 respectively), according to Pew Research Center. White college grads have more than seven times the wealth of Black college grads, according to Brookings.
There are many reasons underlying the racial wealth gap. One large contributor stems from housing inequality. Homeownership has been a traditional path to building intergenerational wealth. Homeownership by white Americans was already 30 percentage points higher than Black Americans before the pandemic.
Owning a home allows you to build equity, make a profit if you decide to sell, or pass on assets to family members in an inheritance. Yet the path to home ownership has been more challenging for Blacks than for whites.
Blacks are more likely to be denied credit, especially for mortgages, and receive worse rates when they are approved. Public policies such as redlining, which essentially sanctioned segregation when the government mapped out “safe” areas to insure mortgages that excluded African American communities, contributed to this racial wealth gap.
While more equitable public policies and financial regulations are essential in order to close the racial wealth gap, some business leaders are taking it upon themselves to do their part in creating a more equitable society where they can. I spoke to Lisa Wise, Founder and CEO of Flock DC, a boutique real estate agency in Washington, D.C., on how she is putting people and place over profit and taking a stand against systemic racism, one home at a time.
*This interview has been edited for length and clarity
Holly Corbett: What do reparations mean to you?
Lisa Wise: It’s up to all of us to repair the damages that have been done in the past. We can all make the argument that ‘I didn’t create this problem,’ but each of us has a responsibility to create a more just future that’s more inclusive to everyone.
It’s a complex and important issue of focus for us now. Our industry has enjoyed exceptional success, but it’s clear that it’s in part from creating a lack of intergenerational wealth for people who are Black and Brown; it’s blocked them from buying homes. As a white woman, I’m benefiting from that discriminatory practice, and I’m not okay with it. As a business owner, it’s my responsibility to figure out how to make it more equal.
For me this is a simple tax. I still benefit every day from injustice in the housing industry. I still want to be profitable. I still want to take care of my team. But it is my responsibility to help level the playing field; it’s the cost of operating an ethical, intentional company, and we think that’s good business.
Holly Corbett: How have you seen housing inequality play out?
Lisa Wise: We can see how Black and Brown communities have been pushed out into areas that are environmentally vulnerable or in food deserts – areas that impact standard of living that white people aren’t experiencing in the same way. We’ve seen lending practices that gave Black and Brown people the opportunity to buy into some areas and not others, often in neighborhoods that are miles away from job opportunities or where schools are subpar. Housing policy was designed to make sure we have segregated communities.
The intention of fair housing laws was to help us move beyond these inequities, but the legacy generated from the policies of the past are going to take a very long time to repair. Real estate is where people build their nest egg. When you don’t have home ownership, you’re not able to pass that equity along to your kids.
I want everyone to have opportunities for home ownership, healthcare, education. Those are human rights. And not just any home; a dignified home, where you have access to a great education. It shouldn’t be so lucrative to be white. When we stop making whiteness such a huge advantage, we’ll see more equity.
Holly Corbett: As a founder, what are you doing to help create more equity?
Lisa Wise: When I started Flock DC, I wanted to make a difference in people’s lives through property management. I wanted to make residents feel well taken care of and the community to feel richer, because they were happy where they lived.
I also wanted to give everyone who worked for me the opportunity to own the business. I grew up with housing insecurity as a kid, and I also didn’t want to stress about income.
The way that we operate our business is community forward. We want to create pathways to business ownership to those for whom it may have never been possible. Our minimum wage is $25 an hour, everyone gets fully paid healthcare, transportation benefits, paid short- and long-term disability insurance and paid family leave. We are investing in our teams’ future. We match 401k plans, contribute to 529 educational savings plans and help repay student loans, as many who join are burdened with student debt.
We recently launched the birdSEED foundation to offer home-buying grants to Black and Brown residents in the Washington, D.C area as a first step toward the solution to historical housing injustice.
Holly Corbett: Can you explain how birdSEED works?
Lisa Wise: Last summer time we decided to carve out money for a housing justice program. Most of the money is coming from my savings. Our operating budget is inclusive of philanthropy, because we believe investing in the community is investing in ourselves, and leads to more business. I can tell you, it works.
We can talk about creating a more equitable future, and really it takes cash. We carved out $215,000 to try to move into people’s hands to support down payment, which is often the strongest barrier to people buying a home. People are able to pay high rents here in D.C., but don’t have the down payment saved to buy a home of their own.
The birdSEED foundation offers down payment grants that range from $5,000 to $15,000 per successful applicant. We manage the program through a partnership with the Greater Washington Community Foundation. Their sponsorship of the fund also allows us to accept tax-deductible donations and ties us to other organizations and partners that can compliment our work and help us reach potential applicants.
Holly Corbett: What can business leaders do to help lessen inequities?
Lisa Wise: I think businesses can play a role in creating more opportunities, and also in creating policies that advance equity. Leaders have to reimagine how they measure profits. It can’t just be money.
Profit is traditionally measured by taking something away from someone else, often by reducing labor costs. If you’re passing $1 billion to your child, but the planet is a mess, it doesn’t really help.
I want to be profitable. It’s okay to make money. But how are you doing it, and how much do you need? Minimum wage in D.C. is $15 an hour and at our company it’s $25 an hour. I have a very low turnover to contend with, and don’t deal with the reputation damages that turnover creates. I know my business model is stronger. Making investments on the front end and taking care of your team and community will lead to greater profits down the line.
You can be consciously capitalist and put people above profit. Until that happens, there will be racism. I think the conversation is getting louder and the demand is being heard. We need leaders in each industry to say, ‘I’m not okay with the way things have been working.’
Holly Corbett: In what ways can white people use their privilege to be actively anti-racist?
Lisa Wise: I think so many people are afraid of being vocal and sharing their ideas in this space, because they don’t want to step on toes or say the wrong thing, especially if they are white. We can’t let that stop us from having conversations about anti-racism, because we all benefit if we can help create a more just society for our kids.
To use our privilege, we really just need to listen more and talk less. We need to learn as much as possible and study history and study our industries. Until you’re willing to study the problem, it’s easy to ignore it. Until you get educated, and say, ‘I may not be responsible for creating it, but I’m responsible for creating a new future,’ only then can we move forward.
Credit: Source link