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Foundational Content: What is Housing Equity?

Section Overview

This section provides an overview of key terms and concepts that create a foundation for understanding what we mean when we talk about equity and how it relates to housing and the apartment industry. This includes thinking about housing equity as both an outcome (something we are working toward) and as a process (something we use to think about how we do our work).

Opportunity, equity, equality.

Equality, equity, opportunity.

Equity, opportunity, equality.

These three terms are frequently offered as ways of thinking about and addressing patterns of racial and economic outcomes. How do these terms relate to each other?

When we consider equity, we acknowledge the effect of structural and systemic factors on present-day disparate outcomes. To achieve fairness, equity asks the question: Given the impact of historical, and sometimes present, policies and practices, what actions should we take to ensure that all people, regardless of race, have equal chances of achieving desired outcomes? Equity acknowledges distinctions in needs when considering resources relative to achieving desired outcomes.

By contrast, equality assumes “the state of being equal, especially in status, rights and opportunities” and then seeks to provide the same resources to all people without regard to any distinctions in their respective needs. Equality, as a practice, assumes a common starting point.

Finally, opportunity is meaningful when structural and historical barriers are acknowledged and intentionally addressed such that everyone has comparable awareness, and comparable ability, to access the resources.

[1] (Equality, n.1., 2023)

How Do These Terms Relate to the Apartment Industry?

Race and household income have long been among the greatest predictors of life outcomes in American society. Despite this, most industries, including the apartment industry, have been structured to be race blind and to apply the equality approach. Therefore, when apartments are financed, sited, designed, developed, rented or managed, apartment actors often strive to be race neutral in the execution of policies in the hopes of achieving comparable outcomes across racial and economic lines. However, a color-blind approach is not always effective in changing outcomes. The apartment industry, policymakers and communities should consider solutions to align practices, processes and policies related to housing development in a way that can also contribute to the resolution of racial and economic disparities. Within the context of this Guide, this race conscious approach is what we refer to as “housing equity.”

Specifically, housing equity can be defined as identifying, acknowledging and engaging in tactics that will help resolve systemic disparities in the housing realm. Housing equity can happen when housing outcomes (e.g., housing affordability, housing quality, housing stability, neighborhood safety, residential segregation, people experiencing homelessness, etc.) cannot be predicted by individual characteristics. Housing equity alone will not necessarily achieve racial and economic equity, but it is an important contributing factor.

[2] (Chetty, et al., 2016)

Applying the Housing Equity Lens

Understanding the current status of racial and economic disparities in housing is helpful in developing strategies for advancing housing equity. There is an opportunity for actors in the apartment industry, policymakers and communities to focus on outcomes to address the historical and structural challenges BIPOC households face. By targeting actions with an eye toward reducing differences in outcomes, opportunities for greater equity can be created. Finally, though race and income are correlated, data shows that disproportionate negative outcomes occur for Americans of color at all income strata, meaning solutions for housing equity should not simply be tailored towards low-income populations.

Step 1: Consider Background Resources Regarding Current Outcome Disparities for BIPOC Communities

Historians have written from different perspectives about the impacts of slavery and legally sanctioned racial discrimination on all aspects of American society, especially people of color. There are many recent research papers and other resources arguing that racial inequities in housing in the United States is structural and built into the fabric of policies and practices which can help provide context for considering more equitable housing strategies.

For centuries BIPOC-led households were prevented from accessing the same opportunities for land and homeownership as white households, who were able to build generational wealth derived from their owned properties. As a result of this and other factors, fewer than half of all Black and Latine households currently own their homes, while over 70 percent of white households are owners according to Harvard’s Joint Center for Housing Studies. Indeed, Black homeownership rates are lower even after accounting for differences in income, education, marital status, and credit scores.

Building wealth through other means remains a challenge for many BIPOC-led households given long-standing disparities in access to education, employment and healthy living environments that are crucial to shaping economic outcomes. Yet those disparities are themselves a product of past residential segregation and disinvestment of BIPOC communities. Coupled with lower homeownership rates, this lack of access to wealth compounds over time, leading to large gaps between BIPOC and white household wealth levels. Data from the Federal Reserve shows that the median wealth of white households in 2019 was approximately 8 times greater than that of Black households, a ratio that is larger than it was at the beginning of the century (see Figure 1). This difference is also not fully explained by variations in age, income and education among Black and white household heads.

Figure 1: Family Median Net Worth by Race/Ethnicity, 1989-2019
Source: Federal Reserve Board, Survey of Consumer Finances.
Note: Net worth is the difference between total assets and debt. Race/ethnicity is self-defined by the survey respondent. White and Black respondents are non-Hispanic/Latine, and Hispanic/Latine respondents may be of any race.

A 2017 study by the Urban Institute found that discrimination has also harmed Black Americans’ creditworthiness, highlighting that more than 50 percent of white households had a FICO credit score above 700, compared with only 21 percent of Black households. In addition, the study found that 33 percent of Black households, as compared to 18 percent of white households, have credit-use levels that were too low to generate any credit score. Credit scores are closely tied to a person’s ability to grow wealth and succeed financially in the U.S.

In addition to providing access to mortgage financing, credit scores determine eligibility for apartment rentals, other commercial loans, and even jobs. Among renter households, disparities by race and ethnicity are also apparent in the share of households spending large shares of their income on housing. Enterprise Community Partners’ analysis of 2019 U.S. Census data on renter affordability found that, in the year before the Covid-19 pandemic, 30 percent of Black renters spent more than half their income on housing, compared to only 21 percent of white renters (Figure 2). Unlike differences in homeownership rates, however, much of this variation can be explained by the higher share of Black renters among households with extremely low incomes (i.e., earning less than 30 percent of the area median income) relative to white renters and persistent concentration of BIPOC-led households in neighborhoods with fewer opportunities for upward mobility.

Figure 2: Share of Renter Households by Race/Ethnicity with Severe Cost Burdens, Subset by Income

Source: Enterprise Community Partners’ analysis of U.S. Census Bureau American Community Survey, 2019 1-Year Public Use Microdata.

Note: Income expressed as shares of Area Median Income (AMI). Severe cost burdens are defined as spending more than 50 percent of gross income on housing. Race/ethnicity is self-defined by the survey respondent. White, Black, Asian and Other/Multiple Race respondents are non-Hispanic/Latine, and Hispanic/Latine respondents may be of any race.

It has been difficult for BIPOC-led households to access housing and neighborhoods that could have expanded their opportunities to live affordably and build wealth today. While the ramifications of this cycle impact low-income people of color particularly, research shows that BIPOC families at all income levels have higher housing costs and lower incomes and credit scores, often leading to tradeoffs with expenditures for medical care, food, transportation and other essential quality of life resources for these residents.

[3] (Hermann, 2023)

[4] (Choi, Breaking down the Black-White Homeownership Gap, 2020)

[5] (Choi, Breaking down the Black-White Homeownership Gap, 2020)

[6] (Choi, Breaking down the Black-White Homeownership Gap, 2020)

[7] (Drew & Abu-Khalaf, Black Renters Entered Pandemic Facing Affordability Challenges, 2020)

Step 2: Explore Potential Frameworks That Address Outcomes

The apartment industry has the opportunity to positively influence upward mobility outcomes for BIPOC families. There are three dimensions of upward mobility that affect housing stability—economic success, being valued in a community, and power and autonomy.

Addressing resident outcomes is less about providing programs, and more about considering the ecosystem within which funding, development and operations decisions are made.

This pivot towards housing-based equitable outcomes focuses on the relationship between housing characteristics and upward mobility.

Enterprise Community Partners, in partnership with the Urban Institute, has identified five key housing characteristics that affect these three dimensions of mobility from poverty. The five housing characteristics are housing quality, housing affordability, housing stability, housing that helps build assets and wealth, and neighborhood context. Enterprise frames these housing outcomes as the “Housing Bundle” because they are interconnected and must work together for housing to act as a pathway to economic mobility.

BIPOC-led families are disproportionately negatively impacted in each of the five outcomes of the Housing Bundle–a consequence of the race-based policies and practices mentioned above. These present-day disparities demonstrate how the housing system is currently forcing lower-income, BIPOC residents to make trade-offs between the five housing outcomes at the expense of their own upward mobility. To address racial equity and mobility goals, research suggests that the apartment industry, policymakers and the general public should consider the interconnectedness of these housing characteristics in the design of policies and housing programs. Practitioners frequently focus on one housing characteristic that advances upward mobility but can have mixed or negative effects on others.

  1. Housing Quality
    Example in practice: Housing that is physically sound, free from pests and safety hazards, provides residents with clean indoor air and safe drinking water, and offers suitable space inside and outside of units for residents to move freely and be physically active can support better physical and mental health outcomes for residents, which allows them to thrive in all aspects of their lives.

  2. Housing Affordability
    Example in practice: The apartment industry can contribute to housing affordability as developers of subsidized affordable housing by participating in housing choice voucher programs, supporting and engaging in inclusionary housing programs, and through incorporating subsidized units into developments to create mixed-income communities.

  3. Housing stability
    Example in practice: There are several ways in which operators of rental housing can support long-term housing stability. Some examples include offering multi-year leases with predictable rent increases, working with residents experiencing temporary disruptions in income, partnering with government and nonprofit groups that provide no or low-interest funds to assist with rent payment, providing flexible payment plans that allow residents to make partial payments at different times of the month, and connecting residents to support services that can help them remain stably housed.

  4. Housing that facilitates wealth building
    Example in practice: The apartment industry can support these goals by providing opt-in reporting of on-time rent payments to credit bureaus (not just to the rent bureau), which allows residents to build credit.

  5. Neighborhood context
    Example in practice: Investments in housing can play a role in catalyzing additional neighborhood development and investment, including access to transit, retail, quality schools and other factors. In applying a housing equity lens, apartment industry organizations should consider the impacts of their activities on broader neighborhood development processes.

This Housing Bundle interacts in a variety of ways to significantly affect a household’s chance of upward mobility. When the five characteristics are not aligned, households find themselves making trade-offs between goals, such as finding housing that is affordable at the expense of living in a low-quality home or in a poorly resourced neighborhood. Due to the interconnectedness of these housing outcomes, historical impacts and present-day policies, applying the Housing Bundle is not straightforward; therefore, consideration of whether a characteristic helps or hurts those chances is not clear by examining the characteristic in isolation.

High-quality housing that is affordable, stable, supports asset building, and located in neighborhoods of opportunity can promote upward mobility. Yet, BIPOC-led households often live in housing that lacks one or more of these qualities. To advance racial equity, therefore, practitioners and policymakers should consider these housing characteristics in the design of policies and housing programs and in deciding when and where to build and with whom to partner. The Housing Bundle is not a race-specific framework but can be a race-conscious approach insofar as making decisions through this lens will disproportionately benefit segments of the American population, including BIPOC households.


Step 3: Consider Race at all Levels of Income

There is a tendency to talk about the intersection of race, income and housing by focusing on the provision of subsidized housing that is affordable for renters earning up to a certain level of area median income (AMI). While BIPOC families may have disproportionately lower income than white families, racial and housing equity are not solely about providing housing for residents in a particular income range.

As seen in Figure 3, the rate by which people with low incomes live in low-income communities varies significantly by race. A 2020 study by the Brookings Institution revealed that, as a result of the continuing and compounding effect of racial segregation, over 80 percent of Black people with low-incomes and three-quarters of Hispanic/Latine people with low-incomes live in communities that meet the federal statutory definition for “low-income” communities, whereas less than half of white people with low-incomes do. This means that a significantly greater proportion of lower-income Black and Latine families are impacted by a neighborhood context that impedes upward mobility, through worse access to quality education, employment opportunities, health care and open space. By contrast, a significantly higher proportion of lower-income white families have access to the amenities and benefits that accrue to neighborhoods that are more resourced. By offering housing options that are affordable without considering who is accessing that housing, the condition of the housing and the context in which those options are offered, affordable housing providers may not be maximizing the opportunities to advance racial equity.

In addition, despite the rapid pace with which the U.S. is becoming increasingly multiracial, rates of white isolation remain very, very high. Another Brookings analysis found that while the neighborhoods for the average Black resident increasingly shifted to become diverse pluralities in response to an increase in Latine population growth, the neighborhoods for the average white resident have remained much more homogeneous (see Figure 4).

Figure 4: Population Distribution in Neighborhoods of Average Resident by Race/Ethnicity, 2000 and 2014-2018


Source: William H Frey, "Even as metropolitan areas diversify, white Americans still live in mostly white neighborhoods", Brookings Institution, March 2020.

Note: Analysis conducted using U.S. Census Bureau 2000 Decennial Census and 2014-2018 American Community Survey 5-year Average Public Use Microdata. Race/ethnicity is self-defined by the survey respondent. White, Black, Asian and native American respondents are non-Hispanic/Latine, and Hispanic/Latine respondents may be of any race.

Racial and income segregation can lead to negative impacts for BIPOC individuals and families even at higher income levels. Whereas increased income and levels of education translate into opportunities for white families to live in neighborhoods of greater resource and affluence, a review of census data found that over the last few decades, affluent Black and Latine Americans live in neighborhoods with higher poverty rates and fewer resources than did low-income whites. Of particular import, these patterns of persistent racial residential segregation mean that middle-class and affluent Black families are more likely to send their children to high poverty schools than are low-income whites. The impact of this segregation by race and by income is illustrated in Figure 5, which highlights the significant disparity in outcomes for Black men who live in highly segregated communities, versus moderately segregated and more resourced communities.

Finally, by applying the lens of the Housing Bundle, we note that even if higher income Black families are able to find housing that is affordable in the segregated communities, the neighborhood context of these systematically marginalized communities impairs their outcomes.

[8] (Ramakrishnan, Champion, Gallagher, & Fudge, 2021)

[9] (Working Together, Esusu and Freddie Mac Helped Establish 27,000 New Renter Credit Scores, 2023)

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