Confronting the Black homeownership gap in Minnesota

Most people feel a sense of pride and accomplishment, that they're building for their future, when they buy their first home.

Jovonta Patton felt all that and more. As a Black man, the Minneapolis musician had overcome systemic racial barriers to achieve his goal of owning a home by the time he was 30. "It's out of the norm," he said.

Few people in his family have experience with homeownership.

"My mom didn't own. My dad didn't own," he said. A sister is the only one of his four siblings who owns her own home.

The chart-topping gospel singer and composer was determined to own a home and build equity for his family. As his 30th birthday approached, he and his wife, Symone, were expecting their third child. "I wanted to be settled, with a home for my kids," he said.

They made an offer on one house but withdrew it after an inspection revealed structural problems. Then, in an answer to his prayer, the Pattons found a new house in north Minneapolis that had been developed by PRG Inc., a nonprofit focused on affordable housing and homeownership education.

They paid $240,000 and took possession on Good Friday, a month after Jovonta's 30th birthday. "I was nervous about the closing," he said. "I'm a musician. I don't get a W2. I was on pins and needles with the bank."

After the closing came more worry. The couple's income took a big hit during the pandemic.

"All my bookings were canceled," he said. "I got discouraged. 'I met my goal, to get this house. How am I going to pay for it?' " Fortunately, he found some opportunities to do virtual concerts, including a Facebook Live event.

Now the family is enjoying their home, including their newly landscaped backyard. "That's a fun thing — being able to put a personal touch on the home." Owning, he said, is "everything I needed and dreamed to have. I'm in control."

'We're homeowners'

Last month Clare Verbeten, 25, and her husband, Garrison McMurtrey, 31, bought their first home. On the day of the closing, she shared her enthusiasm with friends via Facebook.

"We're homeowners," she posted. "As a young Black couple, we feel so blessed to begin this journey together. Redlining and systemic racism stripped homeownership away from our people. This home will enable us to build wealth for our family, our future children, and the generations to come. I feel our ancestors shining down on us."

The couple, who were married in a courthouse ceremony in November, had thought it would take them five years to save for a down payment because of their student loan debt. But armed with their coronavirus stimulus checks and the money they saved when their spring post-wedding celebration had to be canceled, they started looking at houses in April.

Even though competition was fierce for homes at their price point, $265,000, they found a light-filled 1885 farmhouse in St. Paul's Como neighborhood.

The significance of owning their own home deepened for them this tumultuous summer.

"With everything going on in the world, we re-examined our history in this city — of racism and discrimination," she said. "Black folks have been denied opportunities. It was really weighing on us after the death of George Floyd.

"My husband was racially profiled in our own apartment. He was in the common room and another resident said, 'Why are you here?' He said, 'I live here.' "

The couple have embarked on a kitchen makeover and plan to move into their house at the end of this month when their lease ends.

"We're happy and excited," Verbeten said. "This is the beginning of us setting up a great path for our family. If the owners in 1885 could see us now. … There was a time when people wouldn't have wanted us to move into our neighborhood."

Sharp disparity

Most Black Minnesotans never fulfill the dream of homeownership. Only 24% of Black households in the state own their home, compared with 77% of white Minnesota households, one of the highest disparities in the nation, according to Minnesota Compass.

In Minneapolis, the Black homeownership rate is the lowest of any metro area in the U.S. with more than 1 million residents.

Why is the gap so wide?

Julie Gugin, president of the Minnesota Homeownership Center, offered her take.

"Historical patterns of racist practices are at the core," she said, "including redlining, racial covenants on deeds, predatory lending practices targeted to the Black community during the Great Recession, and mass purchase of foreclosed homes by owner/investors."

Racial covenants — a few lines of text, written into deeds by developers — prohibited selling or renting a property to "a colored person," "Negro" or "anyone not of the white Caucasian race," effectively barring Black residents from wide swaths of the city and first-ring suburbs for decades.

Such racial covenants first appeared in Minneapolis in 1910. Many remained in effect until 1962, when Minnesota passed the Fair Housing Act, according to Kirsten Delegard, director and co-founder of Mapping Prejudice, a research project at the University of Minnesota Borchert Map Library. With the help of volunteers, Mapping Prejudice has unearthed and mapped racial covenants for all of Hennepin County and is now at work on Ramsey County.

Racial covenants were hardly unique to Minnesota. In fact, they were widespread across the United States. There's no way to know whether they were more pervasive in Minnesota. The Hennepin County database is the first comprehensive one of an American community, Delegard said. But the timing of the covenants may have played a role in their impact here.

"Racial covenants came online in Minneapolis at a critical moment in the development of the Twin Cities," said Delegard, a historian.

Other cities were more developed by the early 20th century. At that time, the Black population in Minneapolis was very small, but members were buying property all across the city, according to census records.

"That became harder after 1910," she said. Racial covenants "also ramped up white hostility to Black people buying in their neighborhood. Black people were corralled into a couple neighborhoods," including Near North and a part of south Minneapolis that includes what is now the Tilsenbilt historic district, one of the first racially diverse developments in the country.

Redlining, the practice of denying mortgages or favorable terms to residents of specific areas based on race or ethnicity, also had an impact.

"One of the conditions to get a great rate was you had to have a racial covenant attached to the property. So developers put them in," said Delegard. "It was a one-two punch that depressed [Black] homeownership."

"People think it's due to a failure to pull themselves up by their bootstraps," said Kathy Wetzel-Mastel, executive director of PRG. "There have been decades and decades of policy that have stacked the deck against Black households," creating a wealth gap that puts homeownership out of reach. "Wealthy people have stocks, but for most Americans, if you have wealth, it's tied up in your home."

Today's challenges

More recent events also have had an impact on Black homeownership, said Gugin.

"Trust in the homeownership system was severely damaged during the Great Recession. People who were targeted by unscrupulous lenders have not recovered trust in the system."

Portia Jackson has seen that lack of trust with the would-be home buyers she works with as program manager for homeownership at PRG.

"They don't know if they're getting a good deal on interest rates, the loan or the house itself," she said. "It takes support to get through the process."

The current shortage of entry-level homes is another hurdle for all first-time buyers.

"The biggest obstacle for consumers we work with is access to affordable inventory," Gugin said.

Two bills aimed at addressing this are expected to be taken up during the September special session, said Wetzel-Mastel. One (HF 4027/SF 3801) would expand use of the Housing Infrastructure Bond to finance construction of single-family homes. The other (HF 884/SF 942) would capture a portion of mortgage and deed tax to fund affordable ownership.

As the pandemic and its fallout take their toll on Minnesota households, PRG is also helping people who have bought homes avoid foreclosure.

"An economic crisis tends to disproportionately affect African Americans," said Wetzel-Mastel. "It's important that we don't lose homeowners of color."

Kim Palmer • 612-673-4784

@Stribkimpalmer