Fighting racial homeownership gap one family at a time

Nearly 50 years ago, PRG, Inc. was created to serve residents of the Powderhorn Park community in South Minneapolis. The acronym stood for Powderhorn Residents Group. They were originally a group of diverse neighbors concerned about affordable, resident-controlled housing in a changing neighborhood – and they still are.
Executive director Kathy Wetzel-Mastel said, “Early in our history, PRG began applying our expertise to housing problems beyond the borders of our founding community, and today we serve many neighborhoods across the Twin Cities.”
PRG’s mission is to combine community-based affordable housing development with education and advising to help all people and neighborhoods thrive.
The non-profit organization is one of the state’s largest providers of homeowner education workshops, and one-on-one advising for first-time home buyers. Wetzel-Mastel said, “We work primarily with BIPOC households to become homeowners. We help our clients find homes that fit their families, and we help them stay in their homes through our foreclosure prevention program.
“Most of the people we work with are on a 1-3 year horizon to being mortgage ready. We teach prospective homebuyers (often the first in their extended families to own homes) to make decisions about whether, when, and how to buy a home.”

Myth busting 101
Wetzel-Mastel described the PRG staff this way. She said, “We work as trusted advisors alongside our clients. Of the BIPOC clients we serve, approximately 50% are African American families, 25% are African immigrant families, and 25% are Asian American or Native American.
“There are a few organizations doing the same work as us, but geared toward the Latino population. CLUES in Minneapolis and the NeDA (Neighborhood Development Alliance) in St. Paul are two examples. They do great work.
“Everybody talks about needing to put 20% down to purchase a home, which can keep many people from ever thinking about themselves as home owners. A more worthwhile question is, ‘Have you ever thought about home ownership?’ We want to make sure that prospective BIPOC homeowners have the same advantages as everyone else.”

Targeted real estate
development
Since the foreclosure crisis following the 2008-09 recession, PRG has focused its real estate development in neighborhoods hardest hit with high numbers of foreclosures. Wetzel-Mastel said,” We’ve built or rehabbed 125 homes in that time, and the majority are located in Phillips and North Minneapolis neighborhoods.
“We’ve been able to keep 125 properties out of the hands of absentee landlords or developers. At the core of our work is narrowing the racial homeownership gap – one family at a time.”

Racial Homeownership Gap
Research shows that Minnesota has the fourth largest racial homeownership gap in the country. Measuring the gap of African American home owners relative to White home owners, Minneapolis comes in last for the 50 largest cities in the U.S.
Wetzel-Mastel continued, “Despite fair housing and lending laws, there are huge disparities in mortgage lending around race, which can’t be attributed to factors such as credit score or income. Higher income African American are rejected more often for loans than lower income Whites. We’re pretty good at locating programs/products to help lower income households. Sometimes we can layer on five or six different types of down payment assistance programs.
“We hope that the foreclosure crisis won’t be repeated. The moratoria on evictions and foreclosures have expired. We expect that federal mortgage assistance will be available by the end of the year for people who have had a COVID-19-related income loss, but it has been slow in coming.
“Our success stories are looking at the people who bought those 125 homes. The macro look at the racial homeownership gap is discouraging, but if we can continue to tell the impact of our work to policy makers – there is a way to change the trajectory. We make sure that low-income community members, residents of the neighborhoods we serve, and people of color are powerful participants in each step of our work.”

Take action
When asked what readers could do about the closing the racial homeownership gap, Wetzel-Mastel said, “Consider supporting programs that will stabilize rents and welcome affordable housing to your neighborhood. If things keep going the way they’re going, the diversity of Minneapolis home renters will keep declining, which will ultimately play out in the diversity of people owning homes.”
Visit the PRG website at www.prginc.org to learn more about individual homeowner advising or group homeowner education classes. PRG’s HUD-approved advisors also offer refinance and foreclosure prevention advising. Their offices remain closed to the public due to COVID-19; call 612.721.7556 to schedule an online or telephone appointment.