INVESTMENT STRATEGY
GENERATIONAL CHANGE
Re-Righting—Not Rewriting—the History of African American Real Estate Investors A NEW WAVE OF AFRICAN AMERICAN BUSINESSPEOPLE IS HELPING TO CREATE GENERATIONAL CHANGE IN THEIR LOCAL COMMUNITIES THROUGH REAL ESTATE INVESTING.
By Arvind Mohan
A n inescapable piece of the rich history of African Americans is that many stories accepted as truths are all too often written by those who seek to harm and diminish the culture. Historically, Black neighborhoods are no exception. From the late 1700s to the early 1900s, more than 1,000 black enclaves were established across the United States, providing their residents with a place to live, learn, worship, and thrive in relative peace and isolation. Unfortunately, these communities represented an easy target for hostility throughout the 20th century, from the abhorrent race-based massacre in Tulsa to the intentional destruction of Black neighborhoods by highway planners and “urban redevelop- ment” initiatives. As a result of the structural racism guiding U.S. housing policy over the last few hundred years, people of color have been left at a severe disadvantage. According to data from the Center for American Progress, Black households today are significantly less likely to own their
homes than white households, and the typical white household holds 10 times more wealth than the typical Black household. However, a new wave of African American businesspeople has emerged to help create generational change by creating safe, affordable, and move-in ready homes in their local communities through real estate investing. THE 20TH-CENTURY HERITAGE HEIST African Americans have a long history of using real estate investing to build financial security and self-sufficiency. In 1865, when General William Tecumseh Sherman asked 20 black religious leaders what freed slaves needed most, they said “land.” After emancipation, freed slaves and their descendants bought up every parcel they could afford, eventually accumulating 16 million acres. Between 1910 and 1997, however, 90% of this land, worth more than $359 billion in today’s
dollars, was lost or stolen. At the same time, racist redlining and discriminatory lending practices kept African Americans from participating in the housing booms that followed the Great Depression and World War II. From 1934 to 1962, 98% of Federal Housing Administration (FHA) and Veterans Affairs (VA) home loans went to white applicants. Although laws like the Fair Housing Act of 1968 attempted to address these practices, the damage had already been done. According to U.S. Department of Treasury figures, homeownership for white households was 75% in the second quarter of 2022, compared with just 45% for Black households. THE TROJAN HORSE OF “HELP” Government entities and insti- tutional investors are increasingly paying lip service to help narrow the racial wealth gap by creating affordable housing in majority Black
36 | think realty magazine :: july – august 2023
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