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Rev. Dr. Martin Luther King Jr: tireless champion for economic justice

Charlene Crowell

On Monday, Jan. 17, the nation will pause to honor the life of the late Rev. Dr. Martin Luther King Jr. Many will recall the historic civil rights achievements of King, the only Black American to be honored with a national holiday.

But King also stood as a tireless champion for economic justice. In his last public speech, delivered a day before his 1968 assassination before a Memphis audience, was in support of a lengthy strike for fair wages among its largely Black sanitation workers. That prophetic oration, often referred to as his “Mountaintop” speech, also noted the city’s economic disparities.

When Dr. King moved his family into Chicago’s Lawndale neighborhood, he described it as “an island of poverty in the midst of an ocean of plenty.”

Fast-forward to today, and the cost of rental housing remains a challenge for millions of families. The average fair-market price for a two-bedroom apartment is $1,295 per month. Yet the highest rent affordable to an average full-time worker is $977, according to the National Low Income Housing Coalition (NLIHC). Its recent report, entitled “Out of Reach,” exposes the mismatch between wages people earn and the price of decent rental housing in every state, metropolitan area and county in the U.S. 

More than 7.5 million extremely low-income renters are severely housing-cost-burdened, finds the report, spending more than half of their incomes on housing. On average, someone who works 40 hours per week year-round must earn $24.90 per hour to afford a modest two-bedroom home without becoming housing-cost-burdened. The average renter’s hourly wage is just $18.78 per hour, however, and minimum-wage workers earn even less.

Additionally, ample research documents how consumers seeking to transition from renters to homeowners face even steeper financial barriers to building family wealth. 

In 2019, prospective buyers of a median-priced home of $321,500 needed to save 11 years to accumulate a 5% down payment of $26,000 on that home, the Center for Responsible Lending (CRL) found in its independent recent report. But buyers seeking the least costly loans, conventional mortgages, needed a 20% down payment — $64,300 — plus another $9,663 for closing costs.

“There is a huge disconnect between our collective view of America as the land of opportunity and this data, which show renters face a steep climb in saving for homeownership,” said CRL researcher and report author Christelle Bamona. “This climb is especially steep for Black and Latino Americans, essential workers and people weighed down by student debt.”

The National Association of Real Estate Brokers (NAREB) underscores CRL’s findings. Its 2021 research, the State of Housing in Black America: Emerging from the Covid Pandemic Recession, found that although homeownership generates the largest part of building household wealth, fewer than 45% of Black households own their homes, compared to nearly 75% of whites. Further, Black homeowners captured only $198 million in savings from the Federal Reserve’s lowering of interest rates during COVID. Nationwide, the savings due to this policy change totaled $5.8 billion. 

“Blacks have made little, if any, strides at closing the disparate homeownership gap between those of our White counterparts,” noted NAREB President Lydia Pope in the report’s foreword. “Systemic discriminatory regulations and policies continue to thwart any meaningful effort at closing the homeownership gap.”

For example, mortgage pricing and under-appraisal of home values are examples of how the growth of Black homeownership and, in turn, wealth, is systematically suppressed. Since 2019, the rate of mortgage loan denials to Blacks (16%) has consistently been double that of whites (7%).

While access to mortgage credit remains a central housing issue, housing affordability has worsened for a record 117 months of year-over-year increases, according.to the National Association of Realtors (NAR). The November 2021 median price of existing homes was $353,900, up 13.9% from November 2020 ($310,800).

Today the quest for economic justice continues. Just a few weeks before King’s assassination, his prophetic voice remains as timely as it is timeless:

“Do you know that most of the poor people in our country are working every day? They are making wages so low that they cannot begin to function in the mainstream of the economic life of our nation. These are facts which must be seen. And it is criminal to have people working on a full-time basis and a full-time job getting part-time income.”

Charlene Crowell is a senior fellow with the Center for Responsible Lending. 

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