- Diana Bolton
Antoinette Bennett-Jones hopes to own a home one day, but it can feel like a faraway dream.
The single mother of two works as an AmeriCorps member at ReSOURCE, earning a stipend that is less than minimum wage. She's still recovering financially from her son's premature birth six years ago, which maxed out her credit cards, tanked her credit score and took her out of the workforce for three years. And unlike some of her white friends, Bennett-Jones, who is a person of color and rents an apartment in Burlington, doesn't have family members who can help with a down payment.
"The idea of trying to save for a home, with this wage, is unrealistic," she said.
Bennett-Jones' predicament is familiar to many Black, Indigenous and people of color in Vermont. Less than half of BIPOC Vermonters own their homes, U.S. Census data show, compared to more than 70 percent of white households. The data, which have a large margin of error, show the disparity is greatest for Black Vermonters: Just 450 of 2,130 Black households here own their homes — a meager 20 percent.
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Owning a home has many financial benefits and is crucial for building wealth to pass down to future generations. But discriminatory practices have long kept BIPOC people from buying. Today's historically tight housing market — where supply is low, cash is king and interest rates are climbing — is creating even more barriers.
In recent months, nonprofits have started trying to right the imbalance. The Vermont Housing Finance Agency, which helps low-income residents buy homes, is offering down payment assistance to first-generation home buyers. Affordable housing developer Champlain Housing Trust is providing zero-interest loans to BIPOC borrowers in what is believed to be the first program of its kind in the country.
Bennett-Jones, who serves on the housing trust's board, said such programs could be her ticket to homeownership.
"I now have a new hope, like, Oh, my gosh, this is possible," she said. "It may not be possible today, but five years down the line, it's doable."
- Courtesy Of Owen Leavey
- Antoinette Bennett-Jones (right) and her family
People such as her have long been locked out of homeownership. Some of the most damaging policies started in the New Deal era of the 1930s. One of these was the Home Owners' Loan Corporation Act, which aimed to prevent home foreclosures and expand home buying — for white people, anyway. Modern scholars see the act as a progenitor of redlining, a practice that blocked families of color from accessing federal home loans. The name refers to the red lines that the corporation drew around majority-minority neighborhoods on city maps, signaling to mortgage lenders that it was risky to do business in these "hazardous" zones.
Vermont wasn't formally redlined, but discrimination took root in the form of restrictive covenants. Written into some property deeds, the covenants barred people from buying homes based on their skin color or religion and have long been illegal and unenforceable. The highest-profile example dates back to 1986, when then-U.S. Supreme Court justice William Rehnquist learned that the deed to his summer home in Greensboro contained racist covenants. Two decades later, residents of South Burlington's Mayfair Park neighborhood discovered similar language in their property records. The extent of this practice is unknown.
Such policies are largely blamed for the wealth inequality that persists today, and the competitive housing market only underscores the problem. U.S. home prices appreciated at a record rate in 2021, squeezing out potential buyers with lower incomes. A tight supply and resulting high prices leave BIPOC families without generational wealth at a disadvantage. The trends have been particularly pronounced in Vermont, a haven for out-of-staters who arrived during the pandemic with money to burn.
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"Folks who are more likely to have an all-cash offer are probably going to be white, upper-class people," said Burlington City Councilor Zoraya Hightower (P-Ward 1), one of the few Black homeowners in the Queen City.
Historic policies mean Black buyers are less likely to have family members who can cosign a loan or help with costs, Hightower said, adding, "We've got all of those things going against us."
Jess Hyman, associate director of housing advocacy programs at the Champlain Valley Office of Economic Opportunity in Burlington, said bias is insidious in property transactions. Renters can face discrimination when applying for a lease, but home buying has many more steps where bias can creep in — from property appraisals that have historically undervalued Black-owned homes to real estate agents steering people of color toward specific neighborhoods. Discriminatory lending has been scrutinized in other states, but Vermont data show that, in 2020 anyway, mortgage approval rates were nearly equal between white applicants and people of color.
In a tight housing market, would-be buyers sometimes send sellers "love letters" that describe why they're the best fit for the home. But that practice can invite discrimination, Hyman said.
"The more a [seller] sees about the people who might be interested in their home," she said, "the more they can make decisions that might be explicitly racist ... [or feed] into implicit bias that they don't even know they have."
The National Association of Realtors issued a formal warning against the practice in 2020, and, in January 2022, legislation banning the letters took effect in Oregon. The Vermont Association of Realtors didn't respond to an interview request on the topic.
State legislators have tried to break down some of the barriers to homeownership. Passed earlier this year, Act 182 provided $1 million for VHFA's first-generation program. It also created the Vermont Land Access and Opportunity Board, an 11-person group charged with advising housing organizations on how to promote racial and economic justice. The board will research possible tax benefits for marginalized groups, among other initiatives. A progress report is due in mid-January.
Meantime, nonprofits have tried to address the homeownership gap. Launched in June, the housing trust's Homeownership Equity Program provides BIPOC people with a $25,000 loan toward a down payment or closing costs. If the buyer stays in the home for at least three years, they don't have to repay the loan. The New England Federal Credit Union is funding the program with a $3 million gift.
- File: Luke Awtry
- Zoraya Hightower
Buyers can only use the loan to purchase one of the 670 homes in the trust's shared equity program. When they later sell, the owners keep 25 percent of the home's appreciated value; the remainder stays with the property to keep it affordable for the next buyer.
This racial equity initiative is a special purpose credit program, which directs funds to marginalized groups. The trust has approved six loans using the program and has six more in the pipeline, according to Julie Curtin, the trust's director of homeownership.
Special purpose credit programs were created in the 1970s, but Curtin said they're rarely used in order to avoid conflict with the Fair Housing Act, which prohibits race-based lending. In December 2021, however, the federal Department of Housing and Urban Development issued an opinion that the programs are allowed under another law that lets nonprofits offer credit assistance to economically disadvantaged people.
Other housing organizations have praised the trust for offering a program whose design is untested in courts. Curtin acknowledged the possibility of a lawsuit but said the HUD memo convinced the trust that the risk was low.
"If we're going to do a program to address [housing discrimination] and increase Black homeownership and address inequities, we should have a program that's direct about it," she said.
VHFA executive director Maura Collins said her organization is looking into creating a special purpose credit program as well. Meantime, VHFA has designed a first-generation homeownership program to provide $15,000 grants for down payments and closing costs. First-time buyers whose parents or guardians don't own a home are eligible, as are borrowers who previously lived in foster care.
The program is modeled after scholarships awarded to first-generation college students, Collins said. White Vermonters are eligible, but the org is specifically marketing it to BIPOC groups.
Members of those organizations have already told Collins that the program can only help so many people at a time when housing stock is so limited. Collins said she hopes the program will at least prompt discussions about other ways to "push against big systems." Until then, she said, "we're not going to know exactly what we need to do next."
Dionne Beaulieu of Burlington appreciates the efforts. With help from the housing trust, she bought her first home in 2019. The sellers were the previous owner's children, who had been willed the property when he died. Beaulieu, who is Black, takes comfort in knowing she can someday do that for her kids and said the new equity programs will give other BIPOC families the same chance. Otherwise, Beaulieu fears that people of color will leave the state — just as two of her neighbors of color did recently when they couldn't afford a down payment on a home.
"We're losing people that would like to contribute to our community, that would like to be a part of things, that want to be homeowners and put their roots down," she said. "I think that just with a little help ... it would have been a different outcome."
Others assert that these programs fall short in addressing the deeper issue of economic inequality. Mark Hughes, the coordinator of the Vermont Racial Justice Alliance in Burlington, said BIPOC people need help qualifying for loans, not just programs to use once they're approved for one.
"You can tell somebody all day long that we want to help you with your down payment, or we're going to give you a loan to offset it, but you still have to jump through those first hoops," Hughes said.
His nonprofit is planning a series of workshops that will include discussions about financial literacy. He hopes to work with organizations such as VHFA and the housing trust to design other programs, though he's not sure yet what those would look like.
"To really make progress on this thing, it's going to take some courage, where people are not just walking up to the line but putting their foot over it," he said.
Bennett-Jones, the Burlington renter, thinks the housing trust's program does just that. There was some backlash on social media when the program was first announced, but Bennett-Jones said the more common reaction has been from BIPOC people who are thrilled a program exists just for them.
"We're part of this community, too," she said. "We should have the same opportunities and chances like everyone else."Clarification, December 1, 2022: This story has been updated to note that the New England Federal Credit Union provided the funds for CHT's Homeownership Equity Program.