Financial Literacy, Wealth Accumulation Must Become Priority

by James Bunyan for MDEAT

Article republished from MDEAT Annual Magazine: Urgency of Now https://issuu.com/mdeat/docs/mdeat_2020_annual_magazine

It is obvious that MDEAT is firm about its commitment to increasing Black homeownership. Besides the economic benefits, what is not often discussed is the social justice connection to homeownership. As we are seeing today across the country, Black people and our communities are under the threat of a number of injustices, and one simple approach to addressing these challenges is to increase our collective wealth. The more ownership we have in our communities, the greater our ability to influence policing and policies as a result of having a larger tax base and voting block of Black residents.

We are well aware of a system of redlining, steering, blockbusting, and other discriminatory practices that often blocks Black people from owning a home. We also know that among the top reasons for mortgage denial for Black buyers is debt to income ratio, credit, and a lack of collateral, which results in about 60 to 70 percent of denial. What does that tell us? Lack of income, access, and wealth keeps us out of the process and further contributes to our diminishing collective wealth.

Even with these challenges, our parents and grandparents pursued homeownership with far less and with blatantly aggressive racism to deal with. So these are not insurmountable challenges to overcome. However, we have to get back to the business of teaching about wealth — the kind that comes from smart money practices, sound investing, credit education, and leveraging equity in our homes.

We also have to wrap our hands around the ballooning student loan debt that has become another crutch for our people. Eighty percent of Black students have to take out student loans in order to attend college compared to 59 percent of White students. The result is crippling the next generation’s dreams of homeownership and wealth accumulation.

Due to wealth and pay gaps, Black families may not be able to fund a college savings plan at the same levels, which is why we have to embrace financial literacy and also teach it to our youth early.

Lastly, we have to get more aggressive about growing and scaling Black businesses, and that requires government intervention. The trajectory of a Black business is far greater when local government intentionally puts policies in place to increase procurement opportunities, and the same is required of the private sector — better implementation of supplier diversity programs that are small business friendly.

Whether young or old, homeowner or not, there is a greater responsibility for all of us to reach back and figure out how to close the knowledge gap. Ultimately, we have to be willing to collectively create alternative ideas and solutions to navigate these circumstances. New policies are needed and it will take everyone from the faith-based community and community-based organizations to business groups, social organizations, elected officials, the greater business community, and our legislators to work together on these issues.

James Bunyan
Broker/Owner, Millennium III Realty
MDEAT Second Vice-Chairperson
Housing Advocacy Committee Chairperson