Closing the Wealth Gap
Accruing wealth through home ownership only works if you can afford to buy a house and maintain it. In this episode of Out to Lunch, ways to make NOLA home ownership more affordable.
There are simple facts about the economy that we all know. One of them is, the way most people in the United States accrue wealth is through the appreciation of the value of their home.
The fatal flaw with this foundational economic principle is easily demonstrated here in New Orleans: over 50% of New Orleanians rent. Not because they’ve made some maverick financial decision about home ownership, but simply because they can’t afford to buy a house.
The other economic principle that we all know is this: there’s a growing wealth gap in the country. And in our city.
The reason we know these simple facts about the economy is because we hear these types of conversations, often. What we don’t hear very much of, are solutions to the problems of housing and wealth inequality. But there are people working on these issues. People who are making a difference in closing the wealth gap in the US, and here in New Orleans.
Nicole Barnes is Executive Director of the Jericho Road Episcopal Housing Initiative. Jericho Road works to provide affordable housing, in two ways. They develop and build affordable houses. And, they work with people who would normally be unable to afford to buy a house. They put together loans and financing that can get a person into their own home for a down-payment of $1,500. Yes, $1,500.
Jericho Road is making a fairly significant impression on local housing. In under 20 years they’ve invested almost $40m in the local real estate market. They’ve re-habbed over 270 houses, built and sold over 100 houses, and co-developed over 260 rental units.
William Stoudt is Executive Director of Rebuilding Together New Orleans.
You might think that we invented the concept of “rebuilding” here in New Orleans after Hurricane Katrina nearly wiped out the city in 2005. But, in fact, an organization called Rebuilding Together was formed in Midland Texas in 1973. The New Orleans branch was founded in 1988.
Rebuilding Together works with low income and elderly home owners to provide critical health and safety home repairs so that elderly and low-income people can afford to maintain their homes, and stay living in them. Since their inception, Rebuilding Together has revitalized over 1,700 homes in New Orleans.
Most of us accept that a certain house on our street is a wreck and maybe we assume the person who lives there just doesn’t care. The truth, apparently, can be quite different. People who are elderly or disabled often don’t have enough income to keep up with home maintenance. Rebuilding Together is focused not just on the upkeep of these types of homes, but also on remodeling or repairing houses so that elderly people can continue living in their homes while they age.
The uneven distribution of wealth in our country, and in our city, is a gap all of us would like to see closed. Nobody wants wealthy people to become less wealthy. But we all agree that it would be a good thing if less-wealthy people had more access to resources. The most fundamental way more of us can have greater wealth, and hand it on to the next generation, is through widespread home ownership.
It’s fairly well accepted that we can be a nation of homeowners without upending the economy or unleashing an economic revolution. We just need to stop talking about the widening wealth gap and instead find ways to start closing it.
It can be done. It’s not easy. It requires vision for a community, dedication to an economic and financial plan, and hard work. There are people actively working on this issue, like Nicole Barnes and William Stoudt. In future shows we'll talk to other people working on closing the wealth gap in the US and in New Orleans.
This show was recorded over lunch at NOLA Pizza in the NOLA Brewing Taproom. You can see photos from the show by Jill Lafleur at our website. And here's more lunchtime conversation about affordable housing programs in New Orleans.