A 21st Century Homestead Act policy primarily serves to create homeownership opportunities for select communities to address the historic legacy of housing and wealth discrimination. Under this policy, a special purpose public trust would be created to purchase abandoned properties in target cities. An initial investment of government capital will be used to buy properties and transfer them to eligible individuals and families, which will allow for both the restoration of large clusters of abandoned properties in those cities as well as the creation of homeowners. Other provisions include a requirement that the improved property be held by the homeowner for 10 years. Communities would also receive investments for employment, infrastructure, and public resources.
Case for Equity
The American tradition of land giveaways was enshrined in law for decades and served to create wealth and opportunities for economic mobility for generations of mostly white American citizens and European immigrants. People of color were largely prevented from benefiting from these policies. The detrimental effect of this exclusion was compounded by decades of government-sanctioned discrimination by housing lenders. Although redlining (the practice of systematically denying home loans in communities of color) was outlawed with the passage of The Fair Housing Act of 1968, there have been several recent lawsuits wherein banks were found to have engaged in the same discriminatory practice (Housing and Urban Development 2015 and Silver-Greenberg & Corkery 2015). This practice, along with the lack of access by people of color to the nation’s decades-long practice of land giveaways, has created a huge barrier to wealth creation, well-being, and upward mobility. The impacts of these practices compounded from generation to generation and have created communities that have been systematically locked out of investment and economic development. Correcting this ongoing policy failure would lead to a massive generation of wealth through homeownership, home equity creation, and neighborhood stabilization.
Return on Investment
Return on Investment for this policy is rated as HIGH given its potential impact on individual family wealth and community benefits across a range of factors.
The research base is rated as being MEDIUM. The limitation of research that speaks to the specific policy application is a key limitation in the research. However, the related literature(s) are of noteworthy value in assessing this policy.
State & Local Ease of Implementation
This policy is rated as having a MODERATE level of implementation difficulty. The ability for implementation at a local level lowers the difficulty, however political barriers and the need for new mechanisms increase its difficulty.