As we close Homeownership Month and move toward something that resembles normalcy, we need to take stock of not just what the crisis has left behind but also what lies ahead.

Our housing finance system is far from perfect. While homeownership rates for African-American and Latinx families have increased slightly in recent years, they are still nearly 30 and 20 percentage points, respectively, below those of White households.

Unsurprisingly, the pandemic has hit Black homeowners hardest. A new report from three Federal Reserve Banks shows not only that such borrowers were more likely to miss mortgage payments, but that Black families were less likely to refinance their mortgages last year, despite historically low interest rates. While there are multiple reasons for this – less cash for closing costs, lower credit scores – the situation also suggests that lenders failed to adjust to borrowers who had proven to be good risks. Homeowners that stick with higher-than-market mortgage rates will build wealth more slowly than others, retain unnecessarily high monthly costs and face greater foreclosure risks in this crisis and the next.

The low-rate environment has helped existing homeowners more than new borrowers. In its 2021 State of the Nation’s Housing report, Harvard’s Joint Center on Housing Studies documents that low mortgage rates have generally been offset by rising home prices, which will price home shoppers out of the market while increasing the wealth of current owners.

Despite these serious crises, opportunities to move forward exist.

Black families were less likely to refinance their mortgages last year, despite historically low interest rates.

- Doug Ryan

Most immediately, the federal government extended its moratoria on evictions and on foreclosures in its various mortgage programs through July 31. This was imperative to ensure better access to housing assistance. This is imperative to protect the current and future wealth of vulnerable owners and renters.

But what about the road ahead? It is good to see the Biden administration publicly raise the issue of homeownership disparity. It is just common sense (and, I suggest, a legal obligation) that the administration revisit the poorly conceived new rules implementing the Fair Housing Act and the Community Reinvestment Act, two statutes whose promises have yet to be fully realized. If properly implemented, the improvements these laws foretell can help close the racial wealth gap and lead to better housing stability.

While administering civil rights laws in the spirit and to letter of the law should be noncontroversial for government, it has not been. It is also not enough in a housing market where we have both constraints on supply and barriers to buying the existing supply.

Recent developments should give us some hope, but, more importantly, spur us to action.

The administration’s expansive American Jobs Act includes unprecedented housing investment. While not part of the bipartisan negotiations on basic infrastructure, these housing proposals should be enacted in any upcoming reconciliation package. Housing is infrastructure.

The administration has embraced the Neighborhood Homes Investment Act, a bipartisan bill Prosperity Now has long supported. It would direct tax credits to neighborhoods across the United States that have suffered from lack of capital in recent decades. The approach is a proven one, and it will result in new homeownership and employment opportunities for underserved communities.

A proposal to incentivize land use improvement could also be a game changer. The $5 billion program would reward communities that improve zoning rules that lead to smarter and better housing options. Some states and localities have already modeled this good behavior. California may soon join them, though the federal government has a role to ensure these changes benefit all of us.

Congress and the Biden administration should also push for the Build More Housing Near Transit Act of 2021, which would require better land use near federally-funded transit. Such an approach also should be noncontroversial, but land use regulations rarely are. We need to build and improve more affordable housing (and the Biden plan does that), but simply building housing must be a goal, too, as it reduces nearby rents and better positions family finances.

Finally, the recent announcement by Vice President Kamala Harris and Treasury Secretary Janet L. Yellen of the distribution of $1.25 billion to community development financial institutions (CDFIs) cannot be heralded enough. These funds are the latest of a massive congressional appropriation to CDFIs, which have proven their value again and again. (N.B. Some CDFIs do not make housing loans; many focus on small business and personal borrowing.) Just as important is the added flexibility these nonprofit lenders will have. The funds can pay for operations expenses, increase capacity building and shore up loan-loss reserves. In each case, CDFIs will have more room to enter or expand into mortgage and related services.

The housing policy agenda is clearly expanding. But significant challenges lie ahead. Centering housing affordability and sustainability for the marginalized communities must be the foundation of our post-pandemic world.