By Matt Arco | NJ Advance Media for NJ.com
The bill would let people who bid on a foreclosed home put 3.5% cash down — opposed to the 20% needed at a sheriff’s sale — as long as they agree to live in the home for seven years. fstop123 | Getty Images
Housing advocates and clergy members are rallying Tuesday to put pressure on Gov. Phil Murphy to sign a bill they say would boost Black homeownership in New Jersey and chip away at the state’s wealth gap between white and Black families.
The bill (A793/S1427) would let people who bid on a foreclosed home in the state put 3.5% cash down — opposed to the 20% needed at a sheriff’s sale — as long as they agree to live in the home for seven years.
“Home ownership is more than the American dream, rather it is a key driver to a family’s wealth,” said the Rev. Charles Boyer, senior pastor of Greater Mount Zion AME Church of Trenton, in a statement, citing the median household wealth of white families is $322,500 in New Jersey compared to only $17,700 for Black families.
The bill’s sponsors, clergy, grassroots housing advocates, and others will be in Orange on Tuesday evening to rally for the bill.
A family’s wealth can be passed down for generations and the disparity between white and Black families is thanks in large part to a family’s most valuable asset: a home.
Black families were intentionally pushed out of the housing market going back to the 1930s, when a program under the New Deal sought to drive up home ownership while intentionally segregating neighborhoods.
At the time, the Federal Housing Administration refused to insure mortgages in Black neighborhoods in a process known as “redlining,” which deemed the neighborhoods “hazardous.” Meanwhile, the FHA subsidized housing in white neighborhoods which allowed white families to purchase homes and pass that wealth down to the next generation.
Making matters worse in New Jersey for Black homeowners was the 2008 housing crash. According to the Housing and Community Development Network of New Jersey, nearly half of home sales in Newark at the time went to institutional investors.
The group cited a Rutgers study that showed it led to “rapidly rising rents, decreased homeownership, higher barriers to affordable housing production goals, renter displacement and less stable communities.”
“Any form of veto or other delay (by Murphy) will exacerbate this problem,” the group said in a statement.
“We cannot claim to be committed to a fairer, more just New Jersey, without addressing what is one of the starkest racial wealth gaps in this nation. Now is the time to act,” Boyer said, referring to Murphy’s often-used “stronger and fairer” phrase.
State Sen. Shirley Turner, D-Mercer, said if the bill was signed into law, it would greatly “help revitalize our urban areas.”
“We’ve seen where outsiders who come from outside the city, outside of the counties, and sometimes outside of the state, they buy these homes once they’re put into foreclosure and they don’t maintain them,” Turner said. “They refuse to fix anything. They just come in and purchase the house, do a little dusting and cleaning and nothing beyond that.”
Turner added: “Then I get calls from my constituents that they don’t have heat or the roof is leaking.”
New Jersey consistently has one of the highest foreclosure rates in the nation.
Murphy’s office declined comment.
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