Among the many impacts of the pandemic and economic crisis in 2020 was a renewed focus on racial inequality in the U.S. The monetary and health consequences of COVID-19, as well as the accompanying sharp recession, fell far harder on people of color and brought to light even more forcefully what we already knew: financial security is more difficult to achieve for Black families than for white families. A variety of programs to close this gap are already underway by businesses, government entities and nonprofit organizations and we intend to contribute to that effort.
The statistics tell the story: the playing field is not even
A home is typically the most important way a family builds wealth. Federal Reserve data in 2020 found that the average net worth of a homeowner is more than 40 times greater than that of the average renter. An essential piece of the wealth gap between races is that the national homeownership rate for white families is nearly 74%, while the homeownership rate for Black families is just 44%.
That homeownership gap contributes to the stark statistics around wealth accumulation. The net worth of a typical white family ($171,000 in 2016) was nearly 10 times greater than the net worth of a typical Black family ($17,150 in 2016), according to a 2020 Brookings Institution study. The study reported that the wealth gap reveals “the effects of accumulated inequality and discrimination, as well as differences in power and opportunity that can be traced back to this nation’s inception.”
Our role as a profession and a company
At John L. Scott, we’re taking several steps to address the homeownership gap to make a difference in our communities. Internally, while we continue to introduce new ways to support diversity, equity and inclusion by intentionally reaching out to enroll Black team members in our office leadership institute. The institute trains and prepares people to run or own a John L. Scott office.
We also understand the essential role of education in narrowing the race gap in homeownership and wealth. Higher education goes hand-in-hand with increased income, financial stability and homeownership. Educational attainment follows in a parallel path with homeownership, rising from the low point of 40.5% for people with less than a high school degree to 56.4% for those with a high school degree, according to a 2017 study by Trulia. Homeownership rates for people with a bachelor’s degree was 67.3%.
At John L. Scott, we’re committed to supporting education initiatives that will close the minority achievement gap. As part of the celebration of our 90th anniversary in business, we’re sponsoring several scholarships for diverse teacher candidates to obtain their teaching certificate through the University of Washington College of Education, amounting to $90,000 in investment.
This project was inspired by the “A Path to Equity in Education” program created by the Institute of Urban Education at the University of Missouri (IUE). Research shows that if a Black student has two or more Black teachers, their chance of going to college increases by 32%. By supporting efforts to increase teacher diversity, we hope to have a ripple effect on encouraging more students to aspire to a college education and achieve their goals.
As we continue to explore ways we can all narrow the homeownership and wealth gap between races in America, we’re starting with investments in the quality of educational experience. We believe this will help increase job opportunities, advancement, inclusion, and equity for people of color.
John L. Scott Real Estate, led by third-generation Chairman and CEO J. Lennox Scott, has been helping buyers and sellers realize their homeownership dreams since 1931. JLS has 101 offices with more than 3,000 brokers in Washington, Oregon, Idaho and California. JLS is recognized as one of the top 20 residential real estate brands in the nation.