There was major action on the home opportunity front this past year, the result of persistent activism by advocates, joined by millions of everyday Americans. The gains set the stage for much-needed relief to homeowners, a boost to our economy, and a reinvigoration of the American Dream in the year to come. But those outcomes are far from guaranteed.
Two major milestones from 2013 help tell the tale of the year’s progress and peril (a report by The Opportunity Agenda due early next year will cover in detail 2013’s home opportunity successes and setbacks). The milestones relate to fair housing and home finance.
First, fair housing. There’s broad and unprecedented agreement in our nation that what you look like, where you come from, what accent you may have, or whether your family includes children should not be an impediment to your housing opportunities. But, despite the progress we’ve made as a nation on equal opportunity for all, major obstacles to fair housing persist, requiring fresh attention and innovative approaches.
New evidence that challenges persist came earlier this month, when the City of Los Angeles sued Wells Fargo and Citigroup alleging mortgage discrimination that caused a wave of unnecessary foreclosures and a tremendous loss of wealth in predominantly Latino and African-American communities. According to the city’s complaint, Wells Fargo and Citi engaged in a “continuing pattern of discriminatory mortgage lending practices” that began with refusing to offer mortgages to qualified buyers in communiites of color, then evolved into targeting Black and Latino neighborhoods with predatory, high-risk, and high-interest loans. The city’s lawsuit is the latest in a string of fair housing and lending cases against the big banks, most of which have ended in record-setting settlements.
The good news on the fair housing front came earlier this year, when the U.S. Department of Housing and Urban Development (HUD) released new fair housing protections. Final regulations issued by HUD concretized the commonsense understanding that practices that unnecessarily exclude people from housing based on race, gender, or other covered characteristics—through, for example, exclusionary zoning or the concentration of affordable housing only in minority neighborhoods—violate the Fair Housing Act, whether or not they’re motivated by intentional bigotry or bias.
Proposed regulations released by HUD several months later would uphold the Department’s longstanding statutory duty to “affirmatively further” fair housing across its programs and activities—including when a city or town seeks HUD funding to implement housing and community development initiatives. Together, these regulations help close the gap between our national values of equal housing opportunity and the reality in communities across the nation.
The second milestone came just this month, when the Senate confirmed Congressman Mel Watt to head the Federal Housing Finance Agency, the body that oversees mortgage backers Fannie Mae and Freddie Mac. Watt’s confirmation ends the disastrous reign of former FHFA acting-head Edward DeMarco, a Bush administration holdover who resisted basic efforts to stem foreclosures or to address the harm caused by lending industry abuses, contrary to recommendations by economists and experts. In addition to the persistent urgency of adjusting loan principals to fair market value for underwater victims of predatory lending and other abuses, the FHFA has an important role to play regarding the availability of affordable rental housing. As a leader with a longstanding commitment to consumer protection and economic growth, Congressman Watt may be the hero that homeowners and our economy have been waiting for.
These and other 2013 milestones represent hard-fought victories by advocates, organizers, and everyday folk, who have pushed hard for change even as many of them lost their own homes and economic security. But we’re a long way from the finish line. FHFA Director Watt must hit the ground running with reforms designed to get homeownership, affordable housing, and the larger economy back on track. HUD must release final regulations on affirmatively furthering fair housing and rigorously enforce its new rules while helping communities to comply. Congress and the president must craft a new long-term vision for Fannie Mae and Freddie Mac that advances successful homeownership, equal opportunity, and affordable housing across our nation. The Compact for Home Opportunity, released at the start of 2013 by The Opportunity Agenda and its allies, includes additional recommendations for governments, banks, civic groups, and communities.
None of these things will happen on their own. They require continued advocacy, leadership, and innovation. But the activism and progress of 2013 make clear that we can accomplish great things in the year to come.