The head of the Federal Reserve Bank of Atlanta seems on a crusade to spotlight how historic racism has perpetuated housing inequities among people of color. But once leaders like him identify such systemic roadblocks, how should they create change? 

On Monday, Raphael Bostic, president and CEO of the Atlanta Fed led a digital conversation with experts in African-American studies and housing that underscored how outmoded and racist policies have survived and what public and private leaders can do to offset them and help Black and brown communities reclaim stability and wealth that’s long been robbed from them. 

During the Racism and the Economy: Focus on Housing webinar, Bostic lamented that for decades “real estate speculators often facilitated these [barriers] by deliberate block-busting” — or, utilizing historically segregationist public housing and zoning laws to do what housing experts often refer to as gentrification — driving out traditionally lower-income people of color out of their neighborhoods. 

Those practices and others, according to Brookings Institute senior fellow Andre Perry, have long spurred devaluation in predominantly Black communities. “Most people will blame lower home prices on character flaws or moral misgivings,” he said during the discussion. “They’ll say things like education and crime are cause for those prices.” 

That’s a common misconception, he added, that’s survived in part because too many people aren’t educated on issues like “redlining, reconstruction and other historical moments” that have shaped the way the real estate and residential development worlds turn. 

Compounding his concerns of things like credit-based discrimination, on Wednesday, real estate marketplace company Zillow released a report indicating “there is a direct correlation between credit security — having a strong credit history and structural access to credit offerings — and higher homeownership rates.”

Roughly 10 percent of U.S. adults, the report says, are considered “credit invisible” — having no identifiable credit history — and that designation is far more prevalent among Black and Latinx Americans. “Poor or nonexistent credit history is the most common reason mortgage applications are denied to Black applicants,” according to the report.

Not only is it demonstrably more difficult for Black people to become homeowners — because of credit histories, as well as less geographical access to larger financial institutions that might be able to assist them — “homes in Black-majority neighborhoods are underpriced by 23 percent  — about $48,000 per home,” Perry said Monday. “Cumulatively, that’s about $156 billion in lost equity.”

Factors like that contribute to areas having worse schools or issues with crime, and they tend to indicate lacking community amenities, such as grocery stores, jobs and work training and more.

“$156 billion would have financed more than four million Black-owned businesses, based on the average amount Blacks use to start up their firms; it would have paid for more than eight million four-year degrees,” Perry said. “It would have replaced the pipes in Flint, Michigan three thousand times over; It would have covered all of Hurricane Katrina damage, and it’s twice the annual burden of the opioid crisis.”

Also part of the Atlanta Fed webinar, Keeanga-Yamahhta Taylor, assistant professor of African-American studies at Princeton University, said one way to address these inequities is to ensure government agencies better police themselves when it comes to anti-discrimination measures, such as the Fair Housing Act, which was passed in 1968 but has never been properly enforced. 

“There has to be robust enforcement of existing civil rights laws that is coupled with investment in working-class and poor Black communities,” she said, 

Taylor added that decades of cronyism among federal agencies, such as the U.S. Department of Housing and Urban Development (HUD), and the private development sector and mortgage banking industry have perpetuated lackluster enforcement of those rules. “In that situation, it really imperils the ability for the federal government to police its private partner when it is so completely dependent on [the private sector] for the production of housing,” she said. 

So, these experts say, getting the federal government — and lower levels of government — to tighten up the way they enforce regulations is a start. On Wednesday, during another webinar on Black Americans’ ability to build wealth, Bostic said that the Fed can help increase people of color’s access to capital and credit, according to a Law360 recap of the event.

“A part of the conversation to improving access to capital is possible changes to the Community Reinvestment Act, Bostic said,” per the article. “The act requires the Federal Reserve and other federal banking regulators to encourage financial institutions to extend credit to communities where they’re located, including low- and moderate-income neighborhoods.”

Bostic also said Wednesday that “he supports expanding what kinds of investments and activities are eligible for credit under the act,” the article says. “Other changes he’d like to see the act include how the Federal Reserve can provide credit for investments that may take a few years to grow.”

These initiatives would be best complemented by additional investment in the Black community, the experts say. Perry said there’s a too-popular misconception that boosting investment in Black communities takes away from white communities. “When you invest in those underappreciated assets — when you invest in people in ways we haven’t before — the proverbial pride grows, and we have more revenue, we have more resources, we have greater safety, we have more innovators,” he said.

Added Bostic on Wednesday: “We have to collectively really figure out how to make a compelling case that, in an inclusive economy, the pie actually gets bigger and it doesn’t threaten the things you have, but instead it really opens up new opportunities for you and for all of us to get more.”

(Header image, via Federal Reserve Bank of Atlanta: A screenshot of the Monday webinar.)