With the COVID-19 pandemic disproportionately affecting Black Americans and people of color, local experts are working to achieve equitable health and economic outcomes for all, both in the immediate term and in the future.
To discuss these economic impacts on people of color, UNC’s Kenan-Flagler Business School offered a webinar on the intersection of the COVID-19 crisis and the Black Lives Matter movement.
“Our nation is facing a reckoning over structural racism,” said Nikitra Bailey, the Vice President for the Center for Responsible Lending. “The inequality that it has produced is being exacerbated by the coronavirus. The COVID-19 pandemic is both a profound health crisis and an equally profound financial crisis. The virus has devastated families across the nation and has fallen disproportionately on Black families.”
The Center for Responsible Lending is a nonprofit based in Durham, which works to stop predatory lending practices and fights for financial fairness in the financial services sector. They do this through research and policy advocacy.
Bailey said lending practices, housing policy and the looming rental crisis are all affecting African-Americans’ ability to handle the health and economic impacts of COVID-19. She said part of the challenges they face as a housing sector stems from lack of enforcement when it comes powerful fair housing laws.
“We actually as a nation passed our first fair housing act provision in 1866,” Bailey said. “The provision lasted for 102 years without any real enforcement until we achieved the Federal Fair Housing Act of 1968 that was the result of the life being lost in the assassination of Dr. Martin Luther King Jr. So we actually have really effective tools in place that if we use them we can root out this discrimination that’s really dragging the economy overall.”
Bailey said these long-term structural flaws and systemic racism in the housing sector really left families of color vulnerable to impact of COVID-19.
She said this COVID crisis is exacerbating wealth inequities in Black communities because families of color have not had the same opportunity to build up home ownership, home equity or tap into inter-generational wealth to weather the COIVD climate.
Bailey said before the pandemic started, there was actually an uptick in Black home ownership after the historic lows of the great recession – but now she is worried about backtracking.
“There are reports that one in five renters are saying that they actually missed or deferred their rental payment in June,” Bailey said. “We know that 31 percent of Black renters are reporting this as well, which is twice the rate white renters.”
She said 23 percent of Black homeowners reported having to miss or defer a mortgage or home payment in June as opposed to 10 percent of white homeowners.
When looking at these disproportionately high percentages, Bailey said Congress needs to act now. While Congress had previously responded with the CARES Act, which had a suspension on evictions and foreclosures, that part of the act expired last week.
“So if we don’t have any action, it’s likely that millions of U.S families – it’s estimated that 23 million or so – will fall behind on their rent,” Bailey said. “We know again for many Black families, because they were shut out of home ownership opportunity, they are disproportionately renters.”
Bailey said even before COVID-19, some families were paying almost 50 percent of their salary in rent. For Black and Latino families, the average was about 30 percent.
These problems are further amplified as many families either lost their jobs or faced wage reductions at the start of the pandemic. Bailey said many members of the Black community work service sector jobs, which we now know were hit the hardest by business closures and pandemic restrictions.
Bailey said to combat all these negatives, the HEROES Act needs to be passed in the senate and signed by the president immediately, to help our economic recovery as we continue to wade through this pandemic.
“So we have to be mindful during this time that housing is an important pillar of our economy,” Bailey said. “It affects about 20 percent of the overall GDP, so we have to act because any inaction right now will have the potential to really reverberate through every corner of the country and really put a real lag on the economy.”
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