Federal deregulation of mortgage and banking activities offered a new option for low-income and BIPOC communities to access housing and build wealth, but ended up disproportionately harming the same households these measures were meant to assist. The fallout from the collapse of the housing and mortgage market exposed deep inequities in housing outcomes and the need to revisit traditional ways of building, funding, and managing housing. Finally, a global pandemic and renewed push for racial equity forced all levels of government to finally address the effect of past policies and the importance of housing in driving access to opportunity.

Legend

  •   Hindered racial equality
  •   Mix of helped and hindered racial equality
  •   Helped advance racial equality
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    The Graham-Leach-Bliley Act repealed some key provisions of the 1930s Glass-Steagall Act, including a prohibition against banks engaging in both commercial and investment banking activities. It was among the more notable acts of deregulation passed in the 1980s and 1990s to facilitate the flow of credit, including mortgage lending, to underserved low-income and BIPOC communities. Removing such regulations allowed for the introduction of new mortgage products, including loans with low interest rates and down payment requirements marketed specifically to BIPOC borrowers. While initially providing a boost in homeownership, many of these loans ended up in foreclosure after house prices fell and owners found themselves underwater on their loans.

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    Following the collapse of housing and mortgage markets, the Emergency Economic Stabilization Act of 2008 created the Home Affordable Mortgage Program (HAMP) to incentivize lenders to offer foreclosure relief to struggling homeowners. The program only reached a fraction of the expected number of borrowers in need, however, and disproportionately assisted white and moderate-income borrowers rather than low-income BIPOC borrowers who were more likely to have lost equity and be at risk of foreclosure. It also offered no assistance to renters of foreclosed housing, which exacerbated existing inequities in housing markets.

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    The Affirmatively Furthering Fair Housing rule was developed by the Obama administration to address the persistence of residential segregation by race and ethnicity more than 45 years after the passage of the 1968 Fair Housing Act. The rule provided new tools and incentives for state and local governments that receive funds from HUD to report on the extent of segregation in their communities and what efforts they were undertaking to improve access to housing opportunities for underserved populations, including low-income and BIPOC-led households.

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    The Trump administration directed HUD to suspend the reporting requirements under the AFFH rule implemented three years earlier, claiming it placed undue burdens on state and local governments. Without this information, however, the federal government had no means by which to monitor and assess jurisdictions on making progress toward meeting their fair housing goals. The rule was officially terminated two years later, though in 2021, the Biden Administration announced plans to reinstate key provisions.

  • boost

    Minneapolis was the first major U.S. jurisdiction to ban exclusionary zoning on the basis of housing type. Prior to this change, more than 75 percent of land within the city was permitted for single-family housing only, which significantly limited options for building higher density housing to meet the needs of a growing racially and economically diverse population, especially in neighborhoods with access to better employment and educational opportunities. Similar policy changes were later enacted in other jurisdictions, including Berkeley, CA and the state of Oregon.

  • boost

    The Covid-19 pandemic presented the largest nationwide threat to housing stability since the Great Depression, as tens of millions of households found themselves without income to afford housing, while stay-at-home orders reaffirmed the importance of secure housing to public health and other outcomes. Recognizing the potential crisis that widespread evictions (along with the homelessness and crowded living conditions that would follow) posed to the nation, governments at all levels acted quickly to help households remain housed, while the federal government authorized its largest ever commitment to help renters and property owners stay current on their bills.

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