More than 143,000 households of color would need to become homeowners to close Washington’s racial homeownership gap, a chasm that persists because of a shortage of housing, skyrocketing home prices and discriminatory practices, a state report released this week found. 

About 31% of Black households in Washington own their homes, compared to about 68% of white households, according to census data included in the report. Ownership rates also lag for Hispanic, American Indian and Alaskan Native and Asian households, though Black Washingtonians face the largest gap.

The homeownership rate for all Black, Indigenous and people of color households in the state is 49%, according to the report released by a state work group and the Washington state Department of Commerce.

To begin addressing those gaps, the state Legislature commissioned the report and recommendations last year. In response to the findings, the Department of Commerce said this week it would seek an infusion of cash to build more affordable homes and boost homebuyer-assistance programs in the coming years.

“Funding is what will make a significant difference,” said Corina Grigoras, assistant director of the department’s housing division.

The effort comes as the homeownership gap between white and Black Washingtonians gets worse. The gap climbed by more than 5 percentage points between 2000 and 2019, according to the report. The gap in homeownership rates is largest in some of the state’s most rural counties, such as Okanogan, Whitman and Mason


The gaps do not disappear with higher incomes alone. While the disparities are more severe among people with lower incomes, the gaps persist among people making more than the state’s median income, according to the report, which uses 2019 census data.

The push to boost homeownership comes as a large share of the state’s affordable housing funds are directed to subsidized rental housing.

“We need to have more investment in the homeownership side of things if you want to really close the racial wealth divide in Washington state,” said Darryl Smith, executive director of the nonprofit lender and developer HomeSight and a member of the group that developed the report. “This is a call to action and we hope people take it up.” The group included representatives from nonprofit housing groups and real estate associations.

Roots of disparity

The report details past and present roots of the disparity, including racist housing and lending practices, gaps in generational wealth and discrimination in mortgage and appraisal practices. The state’s housing shortage is worsening those problems by driving up the cost of homeownership.

Skyrocketing home prices in the Seattle area have required higher down payments and increased the need for down payment assistance, Smith said. But even with assistance programs, the slim number of affordable homes leaves many people unable to buy.

Even with more homes for sale, Black buyers still face factors like carrying more student loan debt, being less likely to have family inheritance to help with a down payment and being more likely to use government-backed loans that can be less competitive in a seller’s market, the report noted.


To address the gaps, the report suggests increased funding to build and develop affordable housing, more funds for down payment and home-repair assistance, and expanded help for homebuyers to repair their credit. Recommendations also included creating incentives for home sellers to accept offers from buyers who use down-payment-assistance programs and targeting assistance programs to people with ties to historically redlined areas.

In response, the Washington state Department of Commerce said it will ask the state legislature for $60 million to boost homeownership. 

Most of those funds, $50 million, would go toward building affordable housing for ownership and increasing assistance for down payments and closing costs. Another $5 million would help nonprofits grow their “capacity and resources,” and $5 million would fund counseling for people whose credit scores or debt are preventing them from buying a home.

The department hopes to direct at least half of the $50 million to organizations targeting Black, Indigenous and Latino homebuyers, but that may prove difficult.

Federal fair housing rules generally bar race-based programs. It’s not yet clear how the funding may be targeted, Girgoras said. The report notes that its recommendations are “not race-based but attempt to be race-conscious.”

The Seattle-based Nehemiah Initiative is one group that could tap into greater funding. The nonprofit aims to develop affordable homes for purchase on property currently owned by local Black-led churches. But finding funding even for the early stages of developing the projects has proved difficult, said president and CEO Donald King.


New money from the state “could be a significant piece of the funding for the housing that we’re planning right now,” King said.

“It’s a start,” King said. “There’s certainly more needed, but I think with this start, there can be some demonstrations on what it can do.”