The high cost of housing, predatory financing programs, and the temporary nature of a critical government assistance program are all factors making it harder for Black Californians to buy homes — or keep the ones they already own.

Policy leaders, building industry organizations and other concerned advocates are expressing concern that, if left unchecked, this crisis could worsen.

“We have a massive housing shortage, and we should do everything we can to increase the production of housing throughout the entire state, not just infill areas,” said Cornelius Burke, Vice President of Legislative Affairs at the California Building Industry Association (CBIA).

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Burke was speaking on Nov. 16, along with other CBIA officials — including the organization’s President and CEO Dan Dunmoyer — during a webinar on how the high cost of building homes affect Blacks and Latinos homeownership.

According to Dunmoyer the key to resolving the problem is effective policymaking. He said several current housing laws restrict construction even though the policymakers that introduced them may have had good intentions.

One of the housing laws that is a concern to CBIA is Assembly Bill (AB) 68, the “The Housing and Climate Solutions Act.” Authored by Christopher Ward (D-San Diego).

While AB 68 aims to alleviate California’s housing crisis and reduce climate change risk by expediting new home approvals, the CBIA says it is a “housing killer” and it “discourages and ignores innovation.

“We believe that the decisions made by policymakers both local, state, and federal have added to this complexity and confusion,” Dunmoyer said. “As a result of that, we in California are uniquely harmed by our policies in a way that is distinct from the rest of the country.”

“Compared with California, more than a third of the nation’s households can afford to purchase a $406,900 median-priced home, which required a minimum annual income of $106,800,” according to data released on Nov. 10, by the California Association of Realtors (CAR).

Pandemic Relief Program Is Helping Struggling Californians Keep Their Homes

Black families that already own homes are also facing a number of threats, including the impending end of a taxpayer-funded homeowner assistance program. Since it was launched in 2021, the California Mortgage Relief Program (CMRP) has granted millions of dollars to thousands of homeowners struggling to keep up with mortgage payments due to job loss or other setbacks resulting from the pandemic.

“Black and Latino households, in particular. had less net worth to deal with pandemic related financial hardships,” said Joe Jaramillo, an attorney at Housing and Economic Rights Advocates (HERA), a statewide housing legal service and advocacy nonprofit.

Jaramillo was speaking about the problem at an Ethnic Media Services (EMS) news briefing. 

Jaramillo and other housing advocates in California say, like a perfect storm, several factors have converged to threaten homeownership for Blacks and other minorities. Among them is the fact that the one-time $1 billion CMRP taxpayer-funded mortgage assistance program will end when the fund is depleted.

The CMRP has been the primary resource for homeowners to overcome these threats, said Rebecca Franklin, president of the California Housing Finance Agency (CalHFA).

Over 23,000 Californians have kept their homes due to CMRP grants of up to $80,000 per home, amounting to a total of nearly $650 million dispersed so far. Franklin urged homeowners to take advantage of the program as soon as they can.

“Often when homeowners hear about our program, they say

‘Getting $80,000 they don’t have to pay back, that’s too good to be true, this isn’t real,’” said Franklin.

While the housing affordability rate has begun to decline in California, the median cost price of a home remains out of reach for most Californians. According to CAR, only 15 % of households in the state could afford to purchase an $843,000 median priced home during the third quarter of 2023.

“Twenty-three percent of home buyers were able to purchase the $650,000 median- priced condo or townhome. A minimum annual income of $170,400 was required to make a monthly payment of $4,260,” the same study reports.

Franklin said the passing of homeowners who do not have trusts or wills causes hardships for surviving family members. When this happens, relatives go through an arduous, expensive, and lengthy probate court process to inherit the deceased family member’s property. While this is happening, mortgages, taxes and insurance rates increase.

Housing advocates say post-pandemic foreclosures have surged to their near pre-pandemic levels. Consequently, a growing number of families across California are losing the most valuable intergenerational wealth-building asset, their home.

Jaramillo pointed out another factor contributing to the crisis. “Many salespeople and contractors target low-income households and misrepresent costs, or they install nonfunctioning improvements like solar panels.”

Then, there are zombie mortgages.

“Second loans often taken out at the same time as a larger first lien mortgage, split to allow borrowers to avoid large down payments and apply part of the second to the down payment,” Jaramillo described the borrowing scheme.

Homeowners can contact CalHFA and speak to housing counselors or attain legal services even if they don’t meet the agency’s criteria of being low-to-moderate income.

Mary Day, an attorney at HERA, spoke alongside her client, Danny Bishop, who shared how he saved his Richmond home from foreclosure.

After his mother began suffering dementia in 2015, her sibling neglected the property they jointly owned. Soon, he began receiving citations totaling above $90,000 for code violations and property tax evasions.

Day worked with the City of Richmond on Bishop’s behalf. She later found that the $56,000 her client owed for code violations was a mistake. His balance was later lowered to under $30,000.

“The larger the entity, the more resistant they are to dealing with individual situations,” said Day. “Although there’s a tax code that gives them the discretion to give relief, they told us after six months they wouldn’t provide it. California mortgage relief has been the family’s savior.”