This is particularly evident in Wards 7 and 8, where homeownership among Black residents has been declining at an alarming rate. This is owing largely to the proliferation of development projects targeting a younger, wealthier ‘Creative Class’ of millennials, ages 18-34. Certainly such initiatives have the effect of driving up housing values to a point where many would-be homebuyers are priced out of the market, but what about homes that have been Black-owned for decades? Grandma’s house. Where is the generational wealth that could and should have been built from the time before gentrification took hold?
Estimates suggest that as much as two-thirds of a typical American household’s wealth comes from homeownership.
Although generational wealth – assets passed by one generation of a family to another – encompasses stocks, bonds, and other assets, as well as businesses; estimates suggest that as much as two-thirds of a typical American household’s wealth comes from homeownership.2 For various reasons, however, these properties, which could form the cornerstone of a wealthy legacy, often do not remain in the family past the original purchaser. Inherited properties are routinely liquidated in favor of short term cash over long term land holdings. Joint heirs may disagree on whether to keep or sell the home. There may be no one in the family who is able to take responsibility for the upkeep and property taxes. Younger heirs often prefer larger, more contemporary homes. And when they change hands, estate properties are frequently purchased by investors who renovate and resell them for much higher prices than many young, Black buyers are comfortably able to afford.
Here are some proven strategies that may help to build and retain wealth for yourself and for future generations, even in an age of changing neighborhood demographics.
Passing the wealth baton to the next generation and allowing them to build on your efforts can take many forms:gifting the down payment for a primary home or investment property; enabling them to graduate from college debt-free, providing seed money for a business venture, proper estate planning to preserve assets that will become their inheritance; and mostly importantly teaching your children about personal finance and generational wealth so that they can carry the baton for the next leg of the race, no matter who’s in the house next door.
1National Community Reinvestment Coalition. “SHIFTING NEIGHBORHOODS: Gentrification and cultural displacement in American cities”
2 Economic Policy Institute. “The racial wealth gap: How African-Americans have been shortchanged out of the materials to build wealth.”
Ms. Lisa Miller Scott is a Broker/Owner with Elevation Realty, LLC in Lanham, Maryland.