Compounding Interests, Compounding Inequities


ForewordWhat this moment requires

The financial crisis and Great Recession of the late 2000s devastated the US economy and housing market. Housing prices plummeted almost overnight and the country experienced a significant increase in homelessness, poverty, unemployment, and foreclosures.1 Moreover, the effects of the crisis were not evenly felt. Black, Latinx, and low-income communities were disproportionately affected. For instance, the Black unemployment rate hit a peak of 16.8 percent in 2010 – up 8.9. percentage points from its January 2007 level. By contrast, the white unemployment rate hit a peak of 9.2 percent in 2009 – up just 5 percentage points from its January 2007 level . Similar racial and ethnic inequities showed up in foreclosures and home value losses. For example, Black homeowners in the D.C. region were 20 percent more likely to lose their homes compared to whites with similar incomes and lifestyles. Moreover, the foreclosure crisis also disproportionately affected Blacks of all income brackets. For instance, Prince George’s County Maryland boasts one of the highest rates of Black wealth per capita and yet Black homeowners were 80 percent more likely to lose their homes than their white counterparts.2

Fast forward a little more than a decade and we have yet to see a full recovery among people of color. Even before the current COVID-19 pandemic and economic crisis, Black and Latinx homeownership rates were lower than they were at their peak in the mid-2000s. When it comes to the racial wealth gap, a 2017 report from the Institute for Policy Studies and Prosperity Now found that “if the racial wealth divide is left unaddressed and is not exacerbated further over the next eight years, median Black household wealth is on a path to hit zero by 2053—about 10 years after it is projected that racial minorities will comprise the majority of the nation’s population. Median Hispanic household wealth is projected to hit zero 20 years later, or by 2073. In sharp contrast, median White household wealth would climb to $137,000 by 2053 and $147,000 by 2073.”3

These disparities did not start with the collapse of the housing bubble. Instead, we can trace their roots back to segregation, redlining, and the conscious development of an economic system that was, and still is, designed to exploit Black, Indigenous and non-Black people of color. There is a reason that despite legislation such as the Fair Housing Act, Black and Latinx homeownership rates have been virtually stagnant since the 1970s.4 There is a reason that the median net worth of Black families has fallen to roughly half that of 1983 levels while the median net worth for white families has increased 4,000 percent.5 And there is a reason that Black, Latinx, and Indigenous communities have been disproportionately affected by the COVID-19 pandemic. That reason is an entrenched and interconnected system of white supremacy and racial capitalism, which secures the dominance of whites, extracts social and economic value from non-whites, and ensures that our institutional policies and practices strengthen this order.

Confronting, challenging, and overcoming this system will require a comprehensive approach that reckons with the history and perpetuation of structural racism, the intersections of racial and economic inequality, and the limitations of conventional reforms and economic development strategies, and advances social, economic, and ecological interventions that are equitable, just, and implemented across institutions and geographies.6 7 Since 2000, The Democracy Collaborative has been wrestling with this challenge, proposing and experimenting with alternative institutions, approaches, and interventions at various scales that could point us in a direction of an equitable, democratic, and reparative political economic system.

As such, we are excited to introduce this Housing Indicator Tool (HIT). HIT is an important advance in diagnosing and addressing housing inequality in the Capital Region. The indicators collected here identify the many inputs that are required to produce affordable housing and measure each jurisdiction’s commitment to increasing production and ensuring preservation of affordable housing units – both of which are critical first steps in addressing racial and economic inequities in the region. However, simply establishing and meeting specific targets related to the number of affordable housing units will not guarantee a direct and equitable impact on communities of color and we cannot assume that will be the case. Pursuing racially equitable housing outcomes goes beyond setting aside affordable units as the neighborhoods become increasingly unaffordable. It means looking at our housing system holistically and structurally, and operationalizing equity throughout an entire affordable housing process, from inception to implementation.

With this in mind, as you read through the tool, we recommend you consider the following recommendations:

  • Ask: What are the underlying assumptions of agreed upon indicators? Will producing more of the same yield different results? Who are these measures designed to serve?
  • Revisit the Why: We need to pull ourselves out of the weeds to revisit our understanding of equitable development, why it is necessary and how race factors in.
  • Imagine Future Opportunities: Consider investing time, energy, and resources into alternative, community-based forms of housing production, preservation, and ownership. Explore non- traditional projects that are innovative and comprehensive in their wealth generation approach.
  • Focus on Keeping the Data Public and the Process Inclusive: Public recognition of challenges faced and mistakes made is just as important as declaring our wins. Actively seek out and invest in the perspective of residents. Uplift developers and contracts of color who have limited access and opportunities for full market participation.
  • Keep Accountability at the Forefront and Share the Risk: If the risks and burdens of failure are shared across stakeholders, we might lessen the impact on any one entity including on the residents who are often charged with sustaining intended outcomes. Fall forward, Together.

As with any measurement tool, we anticipate an iterative process of examining inputs and outputs in service to more racially equitable outcomes. The lessons we learn here will help to inform our efforts now and in the future.

Finally, these indicators are a small part of informing how we do business. Many jurisdictions have signaled their commitment to addressing racial disparities by hiring equity officers charged with applying an equity lens to guide decision making internally and externally, among other things. Some have even gone so far as supporting affordable housing project innovations that comprehensively addresses health, wealth and workforce development initiatives. This moment calls for solutions oriented innovation, necessitated through structural innovations that can only be accomplished through collective ideation. We have to start somewhere.

  3. Dedrick Asante-Muhammad, et at., The Road to Zero Wealth: How the Racial Wealth Divide is Hollowing Out America’s Middle Class (Washington, D.C.: IPS and Prosperity Now, 2017).
  4. “Historical Census of Housing Tables, Ownership Rates,” US Census Bureau
  6. Kilolo Kijakazi, “COVID-19 Racial Health Disparities Highlight Why We Need to Address Structural Racism,” Urban Wire (blog), Urban Institute, April 10, 2020,
  7. McKernan et al., “Nine Charts about Wealth Inequality.”
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