This year, Homeownership Month is cast in the shadow of housing insecurity for millions of households, particularly those of color. Even before the COVID-19 pandemic, our country was in the midst of a housing affordability crisis with millions of families struggling to pay rising housing costs due to low, stagnant wages.

But in the middle of March last year, as many states shut down all non-essential businesses to stall the spread of COVID-19, cost-burdened households were thrown further into crisis, scrambling to meet basic necessities. The passage of the CARES Act provided some relief, but for many households, it was too little, too late. Now, more than a year later, an estimated 18 million households are behind on their rent and/or mortgage payments.

The percentage of homeowners who have fallen behind by three months or more on their mortgages has increased by 250% to more than two million households since the beginning of the pandemic. It is now at a level not seen since the height of the Great Recession in 2010. When broken down by race, we see that nearly 30% of Black renters are behind on rent, compared to 10% of White renters; 22% of Black homeowners are behind on their mortgages, while only seven percent of White homeowners report being behind. This data does not account for households in alternative housing models like manufactured housing, shared equity cooperatives, land contracts and leases. Emerging reports are showing that 28% of manufactured homeowners as of December 2020 reported being behind on their housing payments compared to 12% of single-family home residents and 18% of residents in small-to-mid-size multi-unit buildings.

"When broken down by race, we see that nearly 30% of Black renters are behind on rent, compared to 10% of White renters."

-Pamela Agava

Policy at the federal, state and local levels has provided protection through forbearance and moratoria on foreclosure and eviction, which has been a major factor in reduced foreclosures and evictions so far. However, as these measures begin to expire and states reopen, many households will face significant debt accrued over the last year.  When foreclosure moratoria end, housing insecurity for homeowners more than 90 days delinquent on their mortgage will increase. There are not enough programs for renters that allow deferral of rental payments or provide emergency cash assistance to meet monthly rental payments. Unlike homeowners, renters do not have the opportunity to use equity from what they have paid in housing costs. Once eviction moratoria end, they will owe missed rent payments, unless their landlords provide other options and federal rental assistance programs address the shortfalls.

How Should We Respond?

At Prosperity Now, since the pandemic began, we have reaffirmed our commitment to the asset-building field and low-income communities.  We have urged other housing practitioners to join our work to develop immediate, responsive, tailored, client-centered solutions, particularly for households of color. We have amplified key strategies to take advantage of this watershed moment by ensuring equitable recovery and racial economic equity in this moment.  It is important to continue to push for lenders and servicers to implement high-touch servicing as a proactive measure to support at-risk homeowners.

At this critical moment, we must think about short-term recovery and long-term, broader systemic changes. How can stakeholders begin reimagining the role they play in securing affordable housing in our communities?  How do we specifically address the racial inequities in affordable housing and homeownership? What policies at the federal, state and local levels need to be reworked, repealed or enacted?

As we try to imagine a better future, we must all work together to build it. A key step is to develop a broader, clearer plan to achieve affordable housing and homeownership for every low-income family.