Zita Campbell just bought a house. It wasn’t easy. It took two years.
Campbell, 43, has two jobs. She’s a full-time case manager who assists families living in poverty and a part-time hospice social worker.
“Buying a house was a process,” she said. She got help from a nonprofit homeownership organization, determined what she could afford and where, paid down debt and set money aside and, finally, closed the deal on a home in the Moncks Corner area. “It took discipline in order for that to happen.”
Campbell, a single mother of two grown children, is more fortunate than most.
On this Labor Day 2020, nearly half the people living in the United States endure significant financial hardship, according to government data.
Around 45 million live below the official poverty line, and another 100 million — a third of the entire population — are considered “low-income,” meaning a family of four takes in less than $48,000 a year. Homeownership, the economy's most important wealth-generating mechanism and the essence of the American Dream, is out of reach for many.
In South Carolina, 2 million residents, or about 41 percent of the population, are poor or low-income. Whites account for 34 percent of them, although they comprise nearly 70 percent of the state’s 5 million people. African Americans, now 27 percent of the population, account for 60 percent of those struggling to get by.
And the racial wealth gap keeps growing.
“At $171,000, the net worth of a typical white family is nearly 10 times greater than that of a Black family ($17,150) in 2016,” notes the Brookings Institution, a nonprofit public policy organization in Washington, D.C. Today, it's worse.
A disproportionate number of African Americans are considered essential workers who hold low-wage jobs and cannot work from home. Already burdened with the nation’s highest unemployment rate by race (5.2 percent at the end of 2018, compared with 3.1 percent for Whites), they have been hit especially hard by unemployment during the COVID-19 crisis. By June 2020, unemployment among Blacks nationwide reached about 17 percent. These figures do not include the many people who have stopped looking for jobs in the regular economy.
At the bottom end of the economic scale, about 40 percent of America’s homeless population consists of Black people, though they represent 13 percent of the country’s population.
In South Carolina last year, African Americans comprised 56 percent of the homeless population. In the Charleston area, Blacks also were 56 percent of the homeless population.
“It actually is pretty simple: All of the things that point to overrepresentation of African Americans in poverty and criminal justice ... are strong predictors of homelessness,” said Stacey Denaux, executive director of Charleston’s One80 Place, the homeless services nonprofit.
It’s all interconnected, she said. The homelessness crisis cannot be separated from other social and economic issues, such as growing wealth disparities, gentrification, lack of public transportation, a dearth of social safety net services, and a criminal justice system that creates vortexes of social dysfunction from which it is difficult to escape.
Homelessness and poverty in the U.S. cannot be properly understood without acknowledging the long history of racial discrimination that has denied Black people the ability to accumulate wealth at the same rates as others. Recent books, such as “The Color of Law” by Richard Rothstein and “Caste” by Isabel Wilkerson, and several studies by think tanks and nonprofits, describe an American society purposefully built to deny Black people access to the American Dream.
“Gaps in wealth between Black and white households reveal the effects of accumulated inequality and discrimination, as well as differences in power and opportunity that can be traced back to this nation’s inception,” according to the Brookings Institution.
Policies and practices of both government and the private sector, sometimes working in tandem, have purposefully denied Black people an ability to create intergenerational wealth, Brookings notes. The list is long and includes slavery, congressional mismanagement of the Freedman’s Savings Bank (which left 61,144 depositors with losses of nearly $3 million in 1874), the violent attack on Tulsa’s Greenwood District (“Black Wall Street”) in 1921, the Jim Crow era’s “Black Codes,” the GI bill whose mortgage insurance benefits initially did not apply to Black people, the New Deal’s Fair Labor Standards Act’s exemption of domestic agricultural and service occupations, federal redlining of urban centers which helped institutionalize housing segregation, and urban renewal programs which displaced black neighborhoods.
As suburbs were built beginning in the 1940s, many real estate developers and neighborhood associations — often following federal guidelines — barred Black people from buying homes, even as the government’s policies contributed to the “ghettoization” of African Americans in urban housing projects once meant for middle-class and working-class White families.
Today, Black families are 40 percent less likely than White families to own their own homes, according to the Census Bureau.
Owning real estate is the most common way to create intergenerational wealth, according to Robert Rothstein, the scholar who wrote “The Color of Law.” It often results in the accrual of equity, which can be used to purchase cars to commute to jobs, send children to college, or invest in other wealth-generating mechanisms. And as wealth is accumulated, it is passed from one generation to the next, often growing as new investments are made. Black people have been systematically denied this opportunity, Rothstein told The Post and Courier.
“African American incomes are about 60 percent of White incomes, on average,” he said. “African American wealth is 5 percent of White wealth. ... The difference between the 5 percent wealth ratio and 60 percent income ratio is attributed in large part, if not entirely, to federal housing policy.”
Most families gain what wealth they have from equity in their homes, and this protects them during economic hardship caused by short-term unemployment because of layoffs, illness or injury. It subsidizes retirement income and allows for transfers of wealth to younger generations.
“Without wealth, you’re pushed farther, and sometimes permanently, down the income scale,” Rothstein said.
Housing policies might be the biggest culprit, but labor and income policies also have contributed to suppressing African American wealth and making it difficult for Black people to participate fully in the market economy, Rothstein said.
“The National Labor Relations Act (of 1935) permitted the federal government to certify unions that excluded African Americans from membership,” he said. This effectively prohibited Black workers from obtaining many blue-collar jobs. “If you put those things together, it explains the unconstitutional origins of both the income and wealth gap.”
Denaux said economic problems are exacerbated by public policies that, for example, construct low-income housing primarily in low-income neighborhoods, helping to concentrate and entrench poverty. In these neighborhoods, the schools typically don’t perform well, social services such as day care are limited, and good-paying jobs are scarce.
When someone ends up in jail, it’s probably because he had no significant access to a support network, Denaux said. Behind bars, little is available in the way of education and job training. So a recently incarcerated person who is reintroduced to the streets is statistically more likely to end up homeless, she noted.
“It’s a natural manifestation of what we’ve done to African Americans in this country,” Denaux said.
Individual organizations such as One80 Place can only do so much.
“We, as an organization, don’t have any control over the pipeline,” she said. “We can participate in the conversations, and try not to perpetuate the problem. ... There are factors we can control and factors we can’t.”
Potential solutions are many, according to analysts and policymakers. They include raising the minimum wage, strengthening worker rights, desegregating and improving public schools and public housing, regulating financial institutions, revising municipal zoning rules, introducing tax credits and other incentives that benefit homebuyers and reward developers who prioritize integration, and more.
“What’s missing is a new civil rights movement that makes it uncomfortable to maintain these segregated patterns,” Rothstein said. “Most African Americans are not poor; they’re working class, lower-middle class, teachers and nurses and construction workers. We have no housing programs for them.”
Campbell, who gave birth to her daughter while still a high school student, went on to earn a master’s degree in social work, and to raise her two children to be smart about money. Her daughter earned her own master’s degree in social work from the University of South Carolina; her son is an entrepreneur developing a clothing line.
If she plays her cards right, Campbell will be able to leave them some inheritance. But only because of years of struggle.
Growing up on heirs’ property, her family lost their home because of tax disputes. Her mother, like many working people, rents an apartment. Which means she is not accruing equity.
“Mom always worked two jobs,” Campbell said. “I have two jobs. My daughter has two jobs.”
She said establishing a good credit score is key. But that requires borrowing and indebtedness, which many African Americans strive to avoid.
To pay for college, she took out student loans, then began to fight her way out of the debt hole she had dug.
Photos: Lowcountry Food Bank Distribution at Mt. Moriah Baptist Church,
United Healthcare, members of Mt. Moriah Baptist Church, Charleston Southern football team and others from the community pass out food for a Lowcountry Food Bank Distribution outside of the church on Friday, August 28, 2020 in North Charleston.
To buy her house, she began with help from the Neighborhood Assistance Corporation of America, which prepares homebuyers and facilitates the transaction.
You don’t have to worry about your credit score and there’s no required downpayment, she said. Buyers determine the monthly mortgage payment they can afford. If it’s higher than their current rent, they have to set money aside to demonstrate they are able to afford the home loan.
Any debt older than two years must be paid off, Campbell said.
So that’s what she did. But she wanted the option of upward mobility. She wanted to be able to refinance, to move into a nicer area, to change her circumstances. The NACA arrangement limited her geographically, so she opted to secure a USDA Rural Development Loan, which provides more flexibility, she said.
Making her rounds as a case manager and social worker, she encounters lots of people stuck on the treadmill. They are not thinking about equity and inheritance. They are just trying to survive another day.
“I see it in my everyday life when dealing with my clients,” she said. “It’s a real eye-opener.”