Program Aims To Boost Homeownership For Black Canadians

Written by Posted On Tuesday, 16 August 2022 00:00

A program launched earlier this year aims to create 200 new Black homeowners in the Greater Toronto Area by 2027.

The BlackNorth Initiative (BNI) Homeownership Bridge Program “is an affordable housing solution that responds to an economic and racial inclusion problem,” say its administrators. It is launching in the GTA but the program is designed to be scaled and replicated in other centres across Canada.

Recently Statistics Canada reported that households led by a Black person were the least likely to be homeowners. In Canada’s 10 provinces in 2021, 37 per cent of Black households were owners, down from 42 per cent in 2018 and the lowest of all households led by racialized groups. It continues a trend that has been going on for more than a decade. A Canada Mortgage and Housing Corp. report says between 2011 and 2016, the overall home ownership rate fell by 2.74 per cent, with the largest drops coming from the Black, Filipino, Arab, West Asian and Korean groups.

The 2021 Statistics Canada data says households led by a Chinese person had the highest ownership rate at 81 per cent, up from 80 per cent in 2018. “Among households led by persons not designated as racialized, 69 per cent owned their dwelling in 2021,” says Statistics Canada.

In Toronto, BNI says that 75 per cent of residents who identify as white have a higher than average income and are homeowners, while 69 per cent of residents who identify as racialized have lower incomes and rent their homes.

BNI says, “Homeownership has enabled generations of Canadians to build equity to start businesses, support children’s post-secondary education, provide for retirement and transfer wealth to children, however, the Black community has been left out.”

BNI’s Wes Hall and Dahabo Ahmed-Omer wrote in a recent column in the National Post: “A history of systemic racism has excluded the Black community from buying homes in Canada. As late as the 1950s in Ontario, homeowners were still using restrictive covenants that stated property could not be transferred to someone who was Black.” 

Families accepted into the BNI Homeownership Bridge Program do not have to come up with a down payment. They get a first mortgage provided by a conventional lender at market interest rates. The second “silent” mortgage is provided by the program and is the difference between the purchase price of the home and the first mortgage. Payments for the second mortgage do not begin until the first mortgage is paid in full.

It's a shared equity agreement, which means the owners and BNI share in the appreciation of the home. “The appreciation families earn is fixed at two per cent annually,” says BNI. “When families make their mortgage payments, which are geared to their incomes, they are enabled to build wealth.”

Black families with at least one dependent under the age of 16, making a gross household income of between $65,000 and $90,000, may be eligible. They must be Canadian citizens or permanent residents and first-time homebuyers who are currently renting. They must have full-time employment and have worked in Canada for more than three years.

Applicants must agree to complete a homeowner education program and commit to doing 500 community volunteer hours. 

BNI’s partners are Dream Legacy Foundation, which is responsible for outreach to the community, intake of the applications and engaging with participating families, and Habitat for Humanity GTA, which collaborates with developers to acquire homes for the program. Funding for the program comes from government and private donations.

Seamus Benwell, project manager for the CMHC report, says some racial groups in lower- income brackets still have higher ownership rates than those with higher incomes in other racial groups. “For instance, middle-income Black have lower ownership rates than low-income Japanese, Southeast Asian, South Asian and Chinese populations,” says Benwell.

He says further research is needed to fully understand the results of the study. “At a high level, some potential factors that could contribute to the differential outcomes are potential implicit biases in the housing finance system; historic discriminatory practices; spillover from broader economic inequalities; and/or current direct forms of discrimination…

“Ultimately, it is likely a combination of these factors that results in the housing outcome disparities we see,” says Benwell.

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Jim Adair

Jim Adair has been writing about Canadian real estate, home building and renovation issues for more than 40 years. He is the former editor of Canada’s leading trade magazine for real estate professionals, as well as several home building, décor and renovation titles. You can contact him at jimremonline@rogers.com

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