Illinois lawmakers hear from housing advocates, bank officials to address racial inequities in homeownership

State legislators Thursday listened to the equitable housing concerns of various community groups and bank officials as they collectively brainstormed policy changes that would make homeownership accessible to more Black and Latino residents.

While lending practices and banks are regulated on the federal level, state Rep. Camille Lilly, D-Chicago, said the goal is to implement policies that could hold the financial institutions accountable for their lending practices in Illinois.

“We are looking at improving the quality of life, as said over and over again,” Lilly said at the over three hour hearing before the Senate Financial Institutions Committee. “Investing in the community, investing in the people will do just that.”

Many who testified Thursday pointed to how lending opportunities for Blacks too often rely on credit scores and suggested that down payment assistance, the creation of a community credit union and widespread changes in the home appraisal process could help alleviate obstacles for the African American community.

Asiaha Butler, president of the Resident Association of Greater Englewood (R.A.G.E), said legislation similar to the Homestead Act of 1862, which provided land to U.S. citizens, would also be beneficial. Decades of housing policies that have hurt Black homeowners has led to so much distrust in banks that many Englewood residents don’t want to own a home, Butler said. Her own home, which has fluctuated in price since she moved in, is currently valued less than how much she paid for the property in 2002.

“I have no equity in my home,” Butler said to lawmakers during the hearing prompted by an investigation by WBEZ and City Bureau examining disparities in home lending practices in Chicago.

“I have no wealth that I can pass along to my children.”

Donna Clarke, the interim president of Neighborhood Housing Services of Chicago, suggested training more residents in communities of color on how to appraise properties. A shortage in appraisers could be a reason why evaluations are done without the person having first-hand knowledge about a specific neighborhood, added Ben Jackson, executive vice president of Illinois Bankers Association.

The current system, based on determining the worth of a property by looking at past values, “destroyed wealth for existing homeowners” and “depresses property values in these communities,” Clarke said.

Jackson proposed eliminating the apprenticeship process those seeking to become appraisers are required to undergo. He described the apprenticeship program as a barrier for those seeking to get into the field, particularly people of color.

Jackson also suggested that there could be alternative methods to evaluating property especially those tied to smaller loans. Some properties in rural areas don’t need appraisals if it can be proved that an appraiser wasn’t available, he said.

Earlier this month, the Chicago Sun-Times reported on how home appraisals add to the inequities Black homeowners face by highlighting the experience of Christina Jordan who received a higher appraisal on her Oakland condo when she didn’t disclose her race.

Elvia Malagón’s reporting on social justice and income inequality is made possible by a grant from the Chicago Community Trust.

Editor’s note: This article was updated to correct state Rep. Camille Lilly’s title.