What the Housing Crisis Can Tell Us about Racism, Sexism and Homelessness

by Lisa Swanson

Over the past decade, the United States has seen many instances of housing injustice which have disproportionately affected blacks. From the escalating subprime mortgage crisis to dwindling units of affordable housing, from increasing gentrification to decreasing funding for public housing, from the swelling homeless population of New Orleans to the progressing permanency of the Gulf Coast Diaspora, the most direct and devastating consequences of housing injustice, including the loss of homes, communities, and even lives, have consistently and overwhelmingly been borne by blacks.

This pattern is not coincidental. If we choose to view each of these problems and its race dynamics as separate issues, then we are guilty of ignoring the points of origin which connect them all together. According to Max Rameau, an organizer with the Center for Pan-African Development in Miami, Florida, the root problems of gentrification in the 2000s are the same as the root problems of segregation in the 1960s: people of colors’ lack of power and control over land, and white supremacy.

Typically, the phrase “white supremacy” is associated with hate groups such as the Ku Klux Klan and the National Alliance. This extreme mental association hinders our recognition of white supremacy, also referred to as white privilege, in our everyday lives. Many white people would be very upset by the suggestion that white supremacy is a part of their everyday lives, and I think that most white people would say very firmly that they do not believe that white people are superior to black people. I agree that white people are not superior to black people, and that people of all shades and appearances are inherently equal. The first calling of my faith as a Unitarian Universalist is to “affirm and promote the inherent worth and dignity of every person.” I believe in every corner of my heart that we are all human beings with worth and dignity, and that the color of our skin does not matter.

I also believe that, in this society, the color of our skin matters; I believe that our society functions in a way which favors people with white skin and makes things harder for people with skin that is brown or black. This favoritism reinforces the superiority of white people, and white privilege becomes a self-sustaining cycle. There is nothing inherent in skin color with makes a group with one shade superior to a group with another shade of skin. But the racism that all of us in the United States experience every day is no less real for being manufactured.

Let’s take a look at the first of the housing issues on our list: the subprime mortgage crisis. At its heart, the subprime mortgage crisis is a crisis of discrimination. Originally, subprime loans were designed as a means of helping a loan applicant with a compromised credit history which would prevent her or him from receiving a conventional loan. To cover the lender’s increased risk, subprime loans carry high interest rates which can amount to paying tens of thousands of dollars in additional interest over the term of the loan.

Subprime loans ought to represent a challenging but possible path to homeownership for those who have made mistakes with their credit in the past. But in reality, many mortgage brokers grant subprime loans in hope of turning a profit, rather than in the best interest of the aspiring homeowner. And rather than hinging on credit history, the granting of a subprime loan seems to be determined by the applicant’s race and gender. Subprime loans account for 55 percent of foreclosures—a disproportionate percentage, given that subprime loans make up only 13 percent of all existing home loans, according to the Mortgage Bankers Association. The high failure rate of subprime loans makes it clear that mortgage brokers rely on a lucrative strategy of granting loans inappropriately. And according to a 2006 Wall Street Journal article, 61% of all borrowers receiving subprime loans had high enough credit scores to qualify for conventional loans, indicating that other factors influence the quality of the loan that an applicant receives.

In February of this year, United for a Fair Economy (UFE) released a report titled Foreclosed: The State of the Dream 2008, which detailed how subprime loans have targeted people of color. As a demographic group, people of color have sustained an estimated $164 to $213 billion total loss of wealth from subprime loans taken out during the past eight years. In UFE’s analysis, this is believed to be the greatest loss of wealth for people of color in modern US history. Looking at federal data, UFE determined that people of color were more than three times more likely to have subprime loans than whites. For example, high-cost loans accounted for 55% of loans to blacks, but only 17% of loans to Whites. According to UFE, blacks lost more money in the subprime mortgage crisis than any other racial group.

In 2006, the Consumer Federation of America (CFA) found that women were 32 percent more likely to receive subprime loans that men—in spite of the fact that women and men have roughly the same credit scores. Women of color were found to be the most likely of all demographic groups to receive subprime loans, while white men were the least likely. This dynamic held true at every income level, and the disparity grew with applicants’ income levels. Among mortgage applicants who earned twice an area’s median income, black women were as much as five times more likely to receive subprime mortgages than white men.

Then there’s HOPE VI—another ostensibly well-intentioned idea gone wrong. HOPE VI is a program which was originally designed to solve some of the problems of what were referred to as “severely distressed” public housing units. Launched by the United States Department of Housing (HUD) in 1992 and formally recognized by Congress in 1998, HOPE VI was intended to revitalize public housing projects through partially or completely demolishing existing low-income housing, and replacing it with mixed-income housing. In reality, the promised mixed-income developments sometimes took almost a decade to build, diminishing any realistic likelihood of the original residents' return. Most mixed-income developments built with HOPE VI money incorporated fewer low-income units than before. Some developments redefined “low-income” as a higher percentage of the area’s median income than would allow all of the original residents to be able to afford to live in the new “low-income” units. As a result, tens of thousands of people of color, mostly black, were permanently displaced from their homes. The HOPE VI money which was intended to alleviate poverty did not benefit the demolished neighborhood’s original residents, but functioned instead as a de facto subsidy for middle class housing and as a driving force of gentrification.

Concurrent with HOPE VI and the burgeoning mortgage crisis, U.S. families have faced dwindling availability of affordable rental units and public housing. According to the National Low Income Housing Coalition, the nation is 2.8 million homes short of the needed number of affordable rental housing units. In 2007, the Center on Budget and Policy Priorities released a report stating that funding for public housing had declined by 25 percent between 1999 and 2006. In roughly the same time frame, 170,000 units of public housing were lost to deterioration.

The loss of affordable housing, in conjunction with poverty, has been one of the driving factors of homelessness. As the National Coalition for the Homeless (NCH) succinctly put it, "demographic groups who are more likely to experience poverty are also more likely to experience homelessness." Since, according to the U.S. Census Bureau, blacks experience the highest poverty rate in the United States (slightly less than a quarter of all blacks are considered to be living in poverty), it follows that they represent the highest percentage of the homeless (49%, according to NCH).

And—please—don’t even get me started on Hurricanes Katrina and Rita.

In short, owning a home, renting a home, and keeping one's home is difficult for everyone in these times—but it’s disproportionately difficult for black people, and especially for black women. And it’s not just disproportionately difficult for black homeowners applying for loans, or black tenants of public housing, or for black residents of the Gulf Coast. It’s consistently disproportionately difficult for black people everywhere in the U.S., of every class and locality. In contrast, owning a home, renting a home, and keeping a home is easiest if you’re white. The consistent disparity reveals an underlying force at work.

Speaking of which, let’s get back to the first of Rameau’s root causes of housing injustice: people of colors’ lack of power and control over land. UFE’s Foreclosed describes just how central control over land is to equality.

Homeownership is central to reaching economic equality and closing the growing divide between the wealthiest people in the US and everyone else in the country. Nearly 60 percent of the total wealth held by middle-class families resides in their home equity (the value of their home minus the amount they owe on it). Furthermore, home ownership is essential in acquiring other assets, including access to high-paying, good-quality jobs (with retirement plans, healthcare and other asset options), high-performing public schools, cleaner neighborhoods, and better health.

Home and land ownership is a vital component of upwards class mobility. Land is the most secure form of wealth, and one of the most definitive sources of power. To some extent, controlling land means that you control your body—after all, you only control your body to the extent that you control the land it sits, walks, and sleeps upon. Put another way, having power over land means having self-determination. Although even that promise of security is weakened if you are black—after all, the New Orleans’ Lower Ninth Ward, which once had the nation’s highest rate of black homeownership, is still struggling to rebuild almost three years after Hurricane Katrina.

Consistent with pattern established the previous statistics we’ve examined so far, a greater percentage of whites own homes than blacks. 48.4% of blacks own homes, compared to 75.8% of whites. However, the situation is slowly improving. Very, very slowly. According to Edward Wolff of the Levy Economics Institute of Bard College, the percentages of white and black homeownership will reach parity in year 7429 CE. That’s 5,423 years away.

I believe that that’s too long to wait.

For too much of our past—since white people arrived on this continent—white supremacy has been a driving force of North, Central, and South American society. For every disproportionate harm that people of color have experienced, white people have received a disproportionate advantage. In the United States today, some whites protest affirmative action without acknowledging or realizing that they are the beneficiaries of an “affirmative culture” of white superiority every day. A person in the U.S. is more likely to be granted a prime rate loan, just for being white. A person is less likely to be living in poverty, just by being white. A person is less likely to be homeless, displaced, or foreclosed upon . . . just by being white.

With regard to housing in our nation today, it is undeniable that racial inequality exists. So how can the playing field be leveled? A logical answer is government authorization of housing opportunities that benefit people of color. After all, white people benefited in terms of housing from the Homestead Act of the 1800s and the GI Bill of the 1940s, programs from which blacks and other people of color were either completely or largely excluded.

While we’re on the subject, we ought to acknowledge the fact that there are countless other areas in our society where white people have had, and continue to have, advantages which come at the expense of people of color. I’m willing to bet that these white advantages/color disadvantages stem from the same root causes of land ownership and white supremacy. And if so, then it seems only logical that the government should look into implementing a comprehensive set of opportunities that benefit people of color, from education to employment to media representation, so that the schools, workplaces, and culture of our nation embody racial equality.

This idea of reparations is nothing new. In his 1964 book, Why We Can’t Wait, Martin Luther King, Jr., proposed that, “Just as we granted a GI Bill of Rights to war veterans, America launch a broad-based and gigantic Bill of Rights for the Disadvantaged, our veterans of the long siege of denial.” N’COBRA, the National Coalition of Blacks for Reparations in America, was founded in 1987, and United States Congressman John Conyers has been proposing the same bill, The Commission to Study Reparation Proposals for African American Act, every year since 1989. Conyers has promised to continue to do so until it is passed into law. The bill number is H.R. 40—an acknowledgment of the never-fulfilled promise of forty acres of land and a mule as reparations to freed slaves in the 1860s.

Lately, popular momentum for the study of reparations proposals has been building. In 2006, the General Convention of the Episcopalian Church passed a resolution to “urge the Church at every level to call upon Congress and the American people to support legislation initiating study of and dialogue about the history and legacy of slavery in the United States and of proposals for monetary and non-monetary reparations to the descendants of the victims of slavery.” True to their word, representatives of the Episcopalian Church were present when H.R. 40 had its first ever Congressional hearing in December of 2007. However, without a greater number of supporters, it is unlikely that H.R. 40 will acquire sufficient momentum to be brought to the floor for a vote.

Congress, HUD, and other institutions may come up with a way to solve the shortage of affordable housing, or to remedy the harm that HOPE VI has caused. They may come up with a way to slow the pace of foreclosures or to bring the Gulf Coast Diaspora home. These are very important things to do. But these problems are symptoms, not the root cause. And without treating the cause, other symptoms are bound to crop up. In this decade, the symptoms of white superiority have meant over a thousand deaths in the Gulf Coast, the greatest collective loss of wealth that people of color have experienced in modern times, and the disruption and devaluing of hundreds of thousands of lives of people displaced. How can we, as a society, continue to let the deeper problem go untreated? And how many more “symptoms” can our national body withstand?

Although white people in the United States might not consciously think that they are better than people of color, we live in a society which rewards whiteness and puts people with brown and black skin at a disadvantage. And I believe that, on some fundamental level, each of us believes what we live.

If we, all the residents of the United States, truly believed in racial equality—if we all truly believed in justice—then we, as a nation, would acknowledge not only past injustices, but also the current injustices which continue to be an irrefutable part of our society. And then . . . we would work to change it.

Related Links:

Foreclosed: State of the Dream 2008. United for a Fair Economy. January 15, 2008.

Women More Likely to Receive Subprime Home Loans; Disparity Highest for Women with Highest Incomes. Consumer Federation of America. Dec. 7, 2006.

Interview: Farrah Gray - Author, Philanthropist and Real Estate Entrepreneur

by Clayton Perry

In America, anything is possible. (All naysayers should consider the life of Farrah Gray.)

At the age of 14, Farrah Gray became a self-made millionaire, despite being raised in the impoverished South Side of Chicago. And in less than a decade, his entrepreneurial talents have allowed him to oversee a $30 million asset management company, become a syndicated columnist with the National Newspaper Publishers Association (NNPA), publish two best-selling books and receive an Honorary Doctorate degree of Humane Letters from Allen University.

At the age of 21, Farrah Gray was named as one of the most influential Black men in America by the National Urban League's Urban Influence Magazine. And in March 2008, after a decade of entrepreneurial success, Farrah Gray was featured as a member of "O" - The Oprah Magazine's Dream Team of Financial Experts.

If Farrah Gray can succeed, why can't we?

On December 27, 2007, Farrah Gray published his second book, Get Real, Get Rich: Conquer the 7 Lies Blocking You from Success, under the Dutton imprint. Upon review of Get Real, Get Rich, Farrah Gray managed to squeeze some time out of his busy schedule and settle down for an interview with Clayton Perry— reflecting on life, race and, of course, entrepreneurship.





How did the Get Real, Get Rich philosophy originate?

I have about 150 speaking engagements a year. After each speech, I always take time sit down and talk to members of the audience. Time and time again, I found that people held onto similar beliefs about what it takes to be successful. Get Real, Get Rich covers seven lies that block many people from success, like "It takes money to make money." That's not necessarily true. "When you work hard, you're guaranteed to be successful" – that's not true. The "born lucky" lie is also untrue – I'm sure you know a lot of people who were born into privilege and amounted to absolutely nothing. We all have greatness within us. So it is really important for everyone to figure out what God put us on Earth to do, and steer clear of the seven pervasive lies that often blindside people. I firmly believe that the two most important times in a person's life are when they are born and when they find out why they were born.

Of the seven lies that you present in Get Real, Get Rich, which do you find to be the most pervasive?

The "hard work" lie. People often say, "If you work hard, then you have the key to success." But let's keep it real. When your bill collectors call, can you tell them, "I work hard"? If you go to the bank and say, "I would like to make a hard work deposit," it's not going to work. They want a cash deposit. A person can work for 160 hours a month and maybe, as Oprah said, get a "thank you" upon retirement. Again, it's not about working hard. It's about finding what God put you here to do.

Once, a 75-year-old guy called me and said, "Dr. Gray, I've been working all my **** life. Why am I broke and you're rich? I've been working hard. Everybody says if I work hard, I'd be successful."

"Oh, no, sir. You've never heard me say that. I believe it's about finding what God put you here to do."

He said, "I know what God put me here to do. I'm a singer."

I said, "All right. Well, sing." He started to sing. I listened. I gave him the benefit of the doubt. I said, "You're not a singer. That's not what God put you here to do."

If you want to find what God put you here to do, ask yourself three questions. First question: What comes easy to you but harder to other people? The second question is: What would you do for years and never have to get paid for it? Third, ask yourself: How can you be of service?

Once you answer those three questions, your work will become your play. You'll never have to "work hard" another day of your life because you'll love what you're doing. The world and the marketplace will open up for you, your gifts and your talents. The guy who called me became a painter after asking himself those three questions—eventually selling one of his paintings for almost $5,000. That's what he was here to do. He wasn't the kind of artist he thought he was. So it's very important to find what God put you here to do.

That is a lesson that I am still growing into. What lessons are you still learning? In the introduction of Get Real, Get Rich you state, "We are all students of life until the lights go out on us."

Patience. Being an impatient person, I wanted to do what my grandmother said: "Do as much as you can as fast as you can; be as productive as possible." But you must be patient. So I have struggled to balance patience with being an impatient person, and trying to find a happy medium. I also believe that my personal mission in life is to grow and contribute, so I am learning and growing every day.

Going back to the "work hard" lie in your previous question: Dr. Deepak Chopra talks about the law of least effort. Sometimes you're pushing and what you want to do is not coming with ease; doors are not opening. A lot of times we're pushing against resistance. If one looks closely, there is often a message in that resistance: "Wait a minute, maybe it's not what you're supposed to be doing." Bottom line is, if you want to know the difference between good resistance and bad resistance, decipher skill versus desire. If you want to be a basketball player, yet you shoot bricks, it's not going to happen.

You say everything we want is on the other side of fear. How do you combat fear?

Everyone feels what could be called fear. But the coward turns away and says, "I can't deal with this." We have to learn to face our fears and push ourselves. If you're living on earth and you're not living on the edge, you're taking up too much room. When you push past the fear and realize that what you feared was not a big deal, you gain more confidence.

You also say that comfort is the enemy of achievement. What kept pushing you, as a successful businessman, once you had achieved a certain level of comfort?

We have to find areas in our lives that we feel most uncomfortable about and want to change. I decided to push myself because it allowed me—as I talked about in the three questions—to give back. I have a scholarship program. When I found out the average age of a homeless person is 9½ years old, I said there must be something that I can do. Now, I am the spokesman for the National Coalition for the Homeless. I am also the spokesman for the National Marrow Donor Program. Anyone who has any form of blood cancer is going to need a transplant. We have tens of thousands of people dying annually because they cannot find a bone marrow transplant that will match exactly – what we a call a 10 out of 10 match—which would give them the highest prognosis for life. I lost my sister because we couldn't find a match. We lost Ed Bradley from 60 Minutes to blood cancer. We lost Nelly's sister Jackie Donahue to blood cancer. That is what pushes me: knowing that there are homeless 9-year-olds and people on their deathbeds waiting for solutions. It is very hard not to be of service when I have been blessed with the financial means to give back. The more we give, the more we receive. It's important to give back, because the seeds you plant today, you will harvest tomorrow.

What keeps you grounded and in tune with the spirit? Hearing you speak, it doesn't seem like success or money has gotten to your head.

That's another lie. Money doesn't change who you are; it magnifies who you really are. Money has not changed me. When I look at money, each dollar represents an option of something I could not do yesterday. Money lets you enjoy the finer things of life, but it doesn't change who you are. It magnifies and brings into fruition the things that you want to hide most. It is a mask for insecurities as well. I will give you a prime example. I have a friend who came into some money. You couldn't tell her anything. "I'm going to live like the rich people live. I'm going to buy up some Christian DEENOR, Louis VEETON." [laughing] She couldn't pronounce it, but she knew she had to have it. I asked her, "Are you going to get some GODEEVA chocolate now? Are you too good for Hershey?" [laughing] What was funny to me was the fact that she could not pronounce the designers' names, but society has made her feel that she had to have their things. I call such things "lie-abilities" – things that are in style today and will go out of style tomorrow. We end up sitting on our assets lying about our ability.

According to a 2005 report by the National Urban League, "One in 20 black men are incarcerated, while one in 155 men are, and for every three black men in college, four are incarcerated. Political correspondent Keli Goff has even gone on to describe the current generation – the hip hop generation – as part hip hop, part Huxtable. She states that in America, racism exists but so does Oprah Winfrey. Considering your success, as a product of the post-civil rights generation and member of the current "hip-hop generation," what is your perspective on race in America, and how has race impacted your business pursuits?

Without a doubt, racism has become institutionalized. I own a real estate asset management company where I manage over $30 million of assets for major financial institutions. Looking at my own success, one could say that racism does not exist, but look at one of the biggest financial crises this country is facing in the sub-prime market and the methodology used by major financial institutions in loaning money. A lot of African-Americans, when their credit profiles were pulled, qualified for what's called A-paper loans but were put into bad loans, the sub-prime market. They were taken advantage of.

When we look at education dollars that were cut, who did it affect? It affected HBCUs (Historically Black Colleges and Universities). Who goes to HBCUs? Black people.

I had an office on Wall Street for nine years. There were people who did not even speak to me in the elevator. They are the wall of Wall Street. I do not think that it is a coincidence that there are more of us, as the old saying goes, at state pen than in Penn State.

So we have to look at the fact that racism exists and that a Dr. Farrah Gray or an Oprah Winfrey or a Bob Johnson does not erase racism. It is not possible for us to erase racism just because African-Americans have reached a level of financial success and crossover appeal. I have book sales in Russia, Indonesia, Canada, Australia but they took my picture off the book in the Russian version of Reallionaire. That was amazing to me. It's selling and they said, "We have to take his picture off because we are uncertain about how he will be received."

You mention Oprah Winfrey and Bob Johnson, who else do you admire in the business world, and what is it about them that you try to emulate?

One of the people that I have respected, and one of the people I have learned so much from studying, is Reggie Lewis. But I never give credit to just one person, never. I give credit to everyone, from Madam C. J. Walker to the Freedmen. They say black people do not save, but that is not true. In fact, many of the freedmen in the South bought themselves out of slavery by saving their money. A lot of our people are unaware of that. I look back to those days and get quite a bit of inspiration.

As a young, African-American entrepreneur, success came to you at an early age, with your first million secured at the age of 14. Now that you are older and have expanded your fortunes into a lot of different ventures, how would you want to be remembered? In time, what legacy do you want to leave behind?

I am looking to leave an inspirational legacy of what is possible. When I go to college campuses, when I do any kind of public appearance or interview, I speak to generations yet unborn. That is why I own a magazine. Prominent Magazine has a demographic of 18-49. Its tag line is "the ultimate entertainment and empowerment magazine."

By God's grace, I've been more successful in my older years, in my earlier 20s, than I was in my teens. I am currently overseeing a $30 million asset management company with Ronald Branch. He was the former president of the National Association of Real Estate Brokers and he is my business partner as well. He was named one of the 25 Most Influential People in Real Estate. I am also a syndicated columnist. My weekly column reaches close to 15 million readers through the Newspaper Publishers Association. So I am looking to inspire our people beyond.

There is a group in Africa called the Akan people and whenever they put someone in a position of power, say a chief or a king, they are given a statue of a hand wrapped around an egg. The hand represents the power the individual. The egg represents the people. You can be selfish and crack the egg and make scrambled eggs for yourself. You can be too rough with it and crush it. Or you can nurture that egg to grow. So when people listen to people like me, those of us who have a platform, we have to say things that speak truth. We have to empower, inspire, build, and launch the next generation of world solutions that will positively contribute to our economic, political and social fabric and—hopefully—improve the entire nation and the world.

What do you value most in life? Is there anything that you have come to value more as a result of your success?

I've lost quite a few family members. My father has been deceased for about 7 - 7½ years now. I lost my sister to leukemia. I lost other family members who are near and dear to me, lost a brother. At this point, it is just my mother and my grandmother and my fiancée.

Will wedding bells be ringing any time soon?

Yes, one day soon. She is a wonderful woman. Phenomenal. We have been together for several years now. I like to say we have a Jay-Z and Beyoncé thing going on [laughing]. Recently, I escorted my fiancée Alicia on the red carpet at an event and the press just hounded her. People are so nosy. You kind of want a private life.

Well, once you go on Oprah, it's a wrap! [laughing] People across the globe know you now. As a public figure, how hard is it to maintain a private life?

Very hard. If you make too many things too public, then you end up living your life before the court of public opinion. I try to keep those things private. Just this year, my mother came to a speaking engagement of mine for the first time. She had never heard me speak.

Well, you have certainly made her proud.

It was such a special moment. I take her on tour with me now after losing my sister, then losing my brother.

If you had to pick a turning point that led you from failure toward success, what would it be?

I will never forget it. I was about seven. My teacher asked, "What do you want to be when you grow up: A teacher, doctor, attorney…?" I said, "Well, I'm going to be a millionaire entrepreneur one day." She looked at me and chuckled. "No, you're not," she said. "You're poor and your family's poor. You better go find somebody to work for." I was just shocked. I remember I tried to get her fired. I went home to my grandma and said, "Grandma, am I really not smart enough and good enough to be an entrepreneur?" I had already launched a campaign for my company. I was selling door-to-door. My grandma is a very sweet lady, but she has a quick right hand and a temper, so I learned that the hard way a couple of times. She said, "Listen, I want to tell you something. I do not want to hear you say that again, ever. Do not let anyone tell you what you can be. Do not let anyone tell you that you are not good enough or smart enough. Remember that nobody is better than you. Everybody puts on their pants one leg at a time. I want you to wake up every morning and say, "Why not me?"

I've lived that attitude ever since. If you see somebody else that has something, why not you? If you want millions, if you want a mansion, if you want to put an end to homelessness, why not you?


For more information on Farrah Gray, visit his official website: http://www.drfarrahgray.com