Attorney General Letitia James of New York has urged state legislators to address unfair credit and lending practices that contribute to racial disparity in homeownership and drive up interest payments for New Yorkers of color by hundreds of millions when compared to white owners.
According to a recent analysis from James’s office, white New Yorkers are 25% more likely than Asian New Yorkers and more than twice as likely as Black and Latino New Yorkers to own their own house. According to the survey, homeowners of color frequently encounter an extra challenge in the form of exorbitant interest rates and fees, which add up to $207 million more than those of their white counterparts.
James stressed that these high interest rates underscore obstacles to credit and loans for Black, Latino, and Asian New Yorkers, making it more difficult for people of color to purchase houses in the first place.
Even after adjusting for credit score, income, loan size, and other financial considerations, mortgage applications from Black, Asian, and Latino applicants were declined at far greater rates than those from White applicants, who had a 33% higher chance of approval in New York City than comparable applicants of race.
During the years that James’ office investigated (2018-2021), homeowners who identified as Black, Latino, or Asian had a significantly higher likelihood of having their refinancing applications rejected, keeping them from taking advantage of historically low interest rates during the COVID epidemic.
Researchers attributed the problem to entrenched prejudice, such as the legacy of racial redlining and restrictive covenants that prohibited Black New Yorkers and other people of color from relocating into particular regions, as well as limited credit alternatives in communities of color. According to James, official efforts have simply made the divisions worse.
According to James’ office, compared to around 72% of white Americans overall, roughly two-thirds of white New Yorkers own their own houses. However, compared to 43% of Black households statewide, just 32% of Black New Yorkers are house owners. Furthermore, the survey claimed that just 27% of Latinos living in New York own their houses, which is almost half the national average of 51% among Latinos.
African American and Black inhabitants of the five boroughs are leaving in greater numbers as a result of the disparities, according to Sabrina Bazile, senior program manager for the Black Homeownership Project at the Center for New York City Neighborhoods. According to a Gothamist study of Census data from 2000 and 2020, there were 125,000 fewer non-Hispanic Black individuals living in New York City over a ten-year period, or a decrease of over 6%.
