We sat down and chatted with Sally Scott, Program Director of UMBC’s Graduate Program in Community Leadership. We spoke about her recent contribution in a report she co-authored with Seema Iyer of the Jacob France Institute at the University of Baltimore titled Overcoming Barriers to Home Ownership in Baltimore City.
Rather listen? Tune in here.
This interview has been edited slightly for blog readability.
Could you share a brief summary of what the report covers?
The report initially came out of a question that we were asked by the Abell Foundation, which was, “Could we help more people become homeowners in Baltimore if they had access to more flexible loans and better incentives, such as closing cost assistance?” And that seems like a straightforward question. But as we dug into it and we looked at the local data and the national data, we realized that those proposed solutions would not be enough. There are much deeper issues at work limiting people’s homeownership opportunities in Baltimore. And that’s particularly true in the black community.
We learned that decades of systemic racism, as well as the Great Recession in 2008 and 2009, have created barriers to homeownership in the black community in Baltimore. To address those would require much more systemic and far-reaching solutions than simply better loans and better incentives.
What was the catalyst to beginning work on this report and what was your role in co-writing it?
A friend of mine, Tracy Barbara Gillette of the Abell Foundation, and I had coffee. She spoke with me about an article she read by a national expert, Ben Hecht of the Living Cities’ Foundation, who said that possibly providing flexible loans and incentives would be a way to get roughly one percent of Americans and three million people into homeownership.
That was a significant claim, and we wanted to figure out if that was true in Baltimore.
I have good connections and background with a lot of the groups doing homeownership initiatives in Baltimore. And Seema Iyer at the Jacob France Institute at the University of Baltimore is a data expert who does wonderful work on citywide data of all types, including homeownership.
We paired up. Seema and her team tackled quantitative work and I focused on the qualitative work, the document review, and the interviews with people active in this field in Baltimore. Through our efforts, we were able to get to some deeper roots and farther reaching solutions than had initially been proposed.
Can you talk about why black ownership is declining?
Black homeownership from 2007 to 2017 went from 45 percent to 42 percent. Part of that was due to the national crisis in our country, which was the Great Recession and its aftermath. The critical finding though is that other ethnic groups in America had recovered more thoroughly and more quickly from the Great Recession than black homeowners. We asked ourselves, what happened during that great recession to make recovery so difficult for black homeowners?
We discovered that the recession preyed upon a lot of people who had more recently become homeowners or become homeowners with exploitative loans 10 plus years ago. Back then, there were a lot of bad loans that led up to the Great Recession. Many of those loans weren’t even signed by anyone. They were just offered. The mortgage industry tended to take advantage of consumers who were more vulnerable, and a number of those consumers were black homebuyers. They tended to target black homeowners for these bad loans.
Coming out of that, a lot of black families lost their homes to foreclosure and then ended up with poor credit and higher debt. On top of that, our country suffers from a growing economic inequality. When you add up all these factors and the decades before that of systemic racism, there is a large group of black consumers who are limited in their ability to buy a home. That keeps the homeownership rate down.
The rental market, however, is not very affordable in Baltimore. So people trying to make that shift from being renters to being homeowners are also facing a difficult challenge in saving up their money if they’re paying higher than 30 percent or 50 percent of their income on rent.
What personally motivated you to want to write this report? What made you want to dig in and research this and find solutions?
I’ve worked in community development in Baltimore since 1998 and have been involved in a lot of different programs and initiatives, as I was the program officer for the Gold Sector Foundation. Additionally, I worked for the Baltimore Neighborhood Collaborative, a nonprofit, citywide organization. I’ve always tried to understand how we can help our neighborhoods and our residents thrive in Baltimore.
The bottom line is that there are people who want to become homeowners and can’t. They’re missing out on what has become one of the main assets for most Americans, a home. So if one is blocked from being a homeowner or one’s asset as a homeowner is declining in value instead of gaining in value, that’s a real problem.
I realized quickly that to understand what was really happening, we’d need to take a deep dive into the data. We also needed to talk to the people who were involved everyday in housing, counseling, marketing, homeownership in the city, realtors, and lenders. To understand the real issues required that we take a 360 approach.
As the director of Community Leadership at UMBC, I wanted to bring to our program and students a current understanding of what the dynamics are in Baltimore City. It’s a city I love. I’ve lived there for over 25 years. And despite its many challenges, I think it offers so much. So whatever I can provide as a researcher or as someone who’s helping prepare people to work in Baltimore, I will do.
Can you talk a little bit about some of the research methods that you used to create this report?
On the quantitative side, with Seema’s leadership with the Baltimore Neighborhood Indicators Alliance, they looked at census data and the Home Mortgage Disclosure Act, called HMDA, to help us understand of those who applied for a mortgage, who got accepted or rejected. We dug deeper on those who weren’t accepted. Why weren’t they? Through this research, we began to gain insight into why folks were having challenges buying homes.
Then on the qualitative side, I, of course, did a very thorough document review. There’s been some excellent research done at the national level and also studies done locally, which were very helpful. But I think even perhaps more helpful in some ways, or at least something that added an additional flavor to the report, was talking to folks who do this work.
There’s an organization called Live Baltimore where if you’re looking to buy a home in Baltimore, you can go on that website and find loan and incentive products that will help you buy a home. Additionally, there are lots of great nonprofit organizations in Baltimore that either provide housing, counseling, financial coaching, rehab houses or build new houses to offer affordable housing. It’s really hard work and requires combining lots of different sources of money.
Can you talk a little bit about some of the significant barriers that do exist for potential homebuyers?
I was shocked to learn the dismal statistics that out of every hundred people who contact a local nonprofit affordable housing program, only one person actually ends up buying a house. It’s indicative of the number of barriers along the way and that the current pool of products, incentives ,and services that are offered are very effective for people who are financially ready or close to ready to buying a house. Not so much for those who are not.
The city of Baltimore offers about 3.3 million dollars in incentives, and thankfully those get to the people most in need who want to buy the home. But that pool of people who are ready or close to ready is much smaller than this larger pool of people who love the idea of buying, of not having to pay rent every month, and actually having an asset that’s growing over time.
They face our deeply unequal, economically unequal system. Their incomes are not high enough to qualify for traditional lending. And let’s say that their incomes are high enough, they may have credit problems because of past challenges like The Great Recession, the cost of education, the income to debt ratio, and low credit as a result.
The biggest housing subsidy in our country goes to upper-income homebuyers who can write off the interest on their mortgage as a tax deduction. And that’s tens of billions of dollars more going into that than are going into housing programs for the rental or homeownership for people at the lower-income end of the spectrum. A rebalancing needs to take affect with our federal policy and federal dollars.
While we’re working on and waiting for that, there are nonprofit, public agencies, private developers, and small developers who are doing the right thing in Baltimore whose work could use more support. It takes a nation to solve this kind of issue. The more people, organizations, and local businesses that come together, the more things will get solved.
How has the Covid 19 issues affected this problem?
The COVID-19 crisis is a terrible disaster for so many people economically, physically, and emotionally. One thing it is helping people realize, though, is that housing, health, and economic policy are completely intertwined. If people are at risk of getting evicted, living in a shelter, or potentially going to be foreclosed upon, that can have tremendous implications for their health as well. So if we can internalize that and take that seriously, then we might start to reallocate our resources because keeping people out of hospitals saves us a lot of money down the road.
We have seen both in Baltimore and elsewhere, hospitals and health institutions playing a larger role in helping people get access to secure housing. COVID-19 has illustrated the depths of the inequality and challenge that people are facing in terms of their housing. And I do hope, just as a with what happened during the Great Depression many decades ago, that this will lead to some really profound changes in the way we organize our economic and our housing systems in this country. There’s a lot of work to be done.
What are some of the incentives that are being proposed by this report?
There are quite a few incentives out there. The Live Baltimore website lists lots of loan products, mortgage products, closing cost assistance, and live near your work benefits. There are programs that renovate homes and then help people get loans to move into those. So they’re all good, but they are confusing and complex.
There are a lot of programs that are really targeted to a fairly small number of people. And overall, they’re not helping as many people as they could if they were better funded and easier to navigate. So the big recommendation that was echoed by many of the housing counselors, was to streamline the programs, make them easier to navigate and make it easier for people who are not experts to find the incentive that they need to find. It sounds easier than it is to do simply because you’ve got the city and state government very involved, and some very important players in this, businesses and nonprofits. So, you’d have to find ways for those groups to come together.
One example that I saw as I was looking around the country is something called Take Root Milwaukee, which came out of their foreclosure crisis. Banks, public agencies, and nonprofits began to work together. They decided to have just one number to call if you’re trying to buy a house or hang onto your house. Through that one number, you get sent to the proper organization to help you. It’s great model. I don’t know if that’s the right model for Baltimore, but hopefully this report will provide some incentives to take up a new look at what’s being offered and how to make it less complex to navigate.
What has been the result of this report, so far? Has there been any reaction from the community?
Yes, there has. It’s been exciting. The Baltimore Business Journal ran an article on it. Baltimore Brew, which is a website-based collection of news stories, wrote a story about it. And then I had the opportunity to go on the Midday with Tom Hall show with two other people who’ve written reports on related topics and then also to be a part of a session organized by Baltimore Neighbor Indicator’s Alliance to discuss the report with other folks who have done similar types of research.
That was a particularly good session with over a hundred people in it. A lot of people who are working on these issues daily asked us good questions, tough questions about the report.
Oftentimes, we’re thinking within the boundaries of current programs and current models. These questions helped us dig for bigger solutions. And we’ve got a new city government that will be taking their places by the end of this year. A new mayor and city council president. There’s a ton of new energy and ideas brewing. So hopefully this is a time when people can pick up some of these ideas, wrestle with them, maybe come up with their own solutions, but start thinking bigger and start thinking how do we tackle some of these systemic issues rather than piece by piece, program by program? How do we dig deeper?
Circling back to the community leadership graduate program at UMBC, is this something that you foresee that you’ll take to the classroom and have lively discussions around this to see what kinds of ideas that students might come up with?
Oh, definitely. In a couple of classes, we will be thinking about and talking about these issues. In the introduction to community leadership class, which all of our students take at the beginning of their community leadership program, we spend a lot of time talking about cities and the context for the work.
We dig into Baltimore history and some of the challenging history of racial and economic injustice. We spend time out in the community. Even now, with the COVID-19 crisis, we’re planning to do some socially distanced classes with our masks on outside in some Baltimore parks that are adjacent to the neighborhoods that we’re going to be thinking about and talking about to really want to give folks in addition to the core themes of the class.
We want to give them a sense of Baltimore as a specific place where a lot of these themes have played out and continue to play out. Where they can be involved in helping address the challenges of Baltimore through their current work or through work that they’re looking for with nonprofit organizations, public agencies, private businesses, whatever angle they are most interested in.
One thing that is a great strength of our program is we have our core concerns in our core issues, but we realize that there are a lot of different ways of coming at these issues. So we’re excited to have people coming into the program from the private sector, from the public sector, from the nonprofit sector, and to learn from their experiences and then to help them connect with the groups in Baltimore who are doing the kind of work that they want to do more of.
We’re young, but we’ve already got a lot of contacts in Baltimore and in the surrounding area because I think Baltimore County and other counties in Maryland are also facing economic inequality and racial justice. These are issues that almost every community in our area are facing. So the better equipped our students are to address them, the better we can help our communities thrive.
Over time, students will have this applied experience where they’ll be on the ground being part of the solution. That’s exciting for them. We found last semester that people were able to connect with groups who were very focused on the issues that they were interested in. A couple of examples would be we have a student who is very interested in racial justice. So she found an organization, the Baltimore Racial Justice Initiative, with trainers who are both black and white, who’ve been working together for many years now and educating people in Baltimore, both at the organizational level and the individual level.
And then we had a student who’s a military veteran. He was able to connect with a group called the Sixth Branch, which is staffed by military veterans. They welcome everybody, military and non military as volunteers. They partner with communities in East Baltimore and increasingly around the city to do projects like creating beautiful parks out of vacant lots. And our student found that his military background was actually excellent preparation for his work with this group because all the staff people in this organization had come out of that same background.
There’s so many great organizations in Baltimore. They’re bubbling up all the time. I’m learning about groups that I’ve never heard of before, so it’s exciting to me that there is so much energy. Baltimore is known for a lot of things, but I really think it should be known for the energy and commitment of its nonprofit sector.
What is the biggest takeaway that you want people to take away from this report?
We cannot settle for business as usual. Our existing programs are doing some important work and helping people become homeowners. But if we just tinker with those programs, we will not get where we need to go. We need to put racial equity at the forefront. Understand the barriers that black families are facing when they want to become homeowners and directly address those. We need to design programs, policies, and programs that benefit the most vulnerable among us, and ultimately benefit all of us.
I think a lot of white, Hispanic, Asian, Native American families will also benefit if we fix these systems to be more equitable, to be more just to better serve families of modest means. Everyone is going to benefit. The city is going to benefit. But the group that’s taken the biggest hit, that has faced the most barriers over time, is definitely the black community. So that’s where we have to focus our energy. If we can fix, improve, and better fund the local and national systems that have been traditionally working against our most vulnerable citizens and families, then I think we all will benefit.
How best can members of the community get involved? Is there a resource or a place you would point them to to learn more about this report and the things they can do?
To read the report, visit the Abell Foundation.
If you want to take the next step and get more involved in solutions for this issue, first look in. What is your strength? Are you somebody who likes to go to a protest and wave a sign and chant? Are you somebody who likes to provide more behind the scenes support? Understanding what motivates you, what you do best, and what you have time to do, is important. Then start exploring the nonprofits that do that work.
Any last thoughts, anything that I did not ask that you think is important that you want people to know?
I think we’ve been somewhat used to thinking in kind of modest terms about what’s possible. In this time of crisis, it’s actually a time to think about things very differently. To start thinking not in terms of scarcity, but in terms of possibility. We’re a very wealthy country. We’re going through a very difficult time right now. But there are all kinds of opportunities that we currently have before us that will grow as we overcome this COVID-19 crisis.
So if we’re really serious about addressing some of the most important challenges facing our community, facing our country, take advantage. Somebody said “Never let a crisis go to waste.” Let’s take advantage of this crisis to rethink our priorities and think more certainly in terms of race.
I think there’s been a huge jump forward with all the support for Black Lives Matter, but that needs to continue and that should be connected to some real concrete changes in policies and resources. We talk about all of this in our community leadership program, both in broad terms and in very specific terms.
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We’re eager to encourage anybody who wants to get involved to check out UMBC’s graduate program in community leadership.