[OP-ED by Raquel Carter, owner of Guide Realty, published in The Lexington Herald-Leader on May 2, 2022]
Home. The word warms your heart. It not just houses people but builds memories and provides stability. It is a culmination of the American Dream.
For those in the middle-income range, a home also represents a majority of net wealth, and it is how multi-generational wealth is built. A record high 30 percent of Americans have no wealth other than the value of their home, according to a 2018 study by Deutsch Bank.
Habitat for Humanity research shows that homeowners also are more civically engaged, and their children achieve higher levels of education.
That’s why, almost 15 years ago, my mother and I opened Guide Realty — to help people make their homeownership dreams come true and accrue all of the other benefits that come with it.
But Lexington’s housing market has changed – even before the pandemic hit. Now, there is rarely a house listed for under $200,000 that doesn’t require considerable repair. We talk about the dream of living in Lexington, but for more and more people, that dream is no longer available.
Big price increases are happening in other places, but our city has policies that prevent us from responding better to this crisis.
Across the board, even prior to the recent tightness in the market, affordability had become an issue. The first-time homebuyer – whether it is a college graduate or newly married couple looking for an entry-level home – can’t find a home they can afford.
As a community, we must ask ourselves: Are we comfortable telling a certain segment of the community that they can’t own property here, or do we want to be an inclusive community?
The problem is even more dire for homebuyers of color. Nationally, the black-white homeownership gap is larger today than it was in 1968 when the Fair Housing Act was signed. As a result, there is another roadblock to building wealth. Because of historical discriminatory housing policies, Black families already are starting 70 to 80 years behind in the goal of achieving homeownership.
We must comprehensively look at the barriers, including:
- Lack of housing inventory. Lexington only builds about 550 homes per year, which was similar to the number of homes built during the Great Recession. Meanwhile, Lexington needs almost triple that number just to accommodate 1 percent population growth. What can we do to increase supply of homes for sale in affordable price ranges and for people at all stages of their lives?
- Barriers with large down payments. How many people can afford to put 20 percent down? Typically, only existing homeowners who have built equity through their existing homes, can afford that large expense. The barrier only gets higher as median home prices in Lexington have risen 63 percent in just 10 years, according to the Fayette County PVA.
- Inability to compete with investors, many of whom make cash offers.
- Entrepreneurs who have trouble getting a loan because they are self-employed.
- Student loan obligations, which disproportionately impact African-American professionals and limit the ability to take on substantial new debt.
As a creative, collaborative, and resourceful community, we can solve this problem by working with local leaders and elected officials to develop balanced land use policies that benefit all segments of our community. Together, we can create a Lexington for everyone.
Carter, a board member of Lexington for Everyone, is the principal broker and owner of Guide Realty, Kentucky’s largest African-American owned real estate company. Carter also serves on the Kentucky Real Estate Commission and its Equity, Diversion and Inclusion committee, the LFUCG Board of Adjustments and the Lexington Community Land Trust Real Estate Development Committee. She also has been active in advocacy and representation for affordable housing projects in Equestrian View, Davis Park and Rain Garden in Lexington.