Unlocking Economic Mobility: How Housing Can Transform Black Families' Futures

Housing is more than just a roof over our heads—it’s a cornerstone of economic mobility, opportunity, and community strength. McKinsey’s latest report, "Investing in Housing: Unlocking Economic Mobility for Black Families and All Americans," sheds light on the urgent housing crisis in the U.S. and the transformative potential of addressing it. Here’s what you need to know.

The Housing Crisis at a Glance

The United States is facing a severe housing shortage, with 8.2 million housing units short in 2023. Without decisive action, this gap is projected to grow to 9.6 million units by 2035. This crisis disproportionately affects Black families, with 60% of Black renters and 30% of Black homeowners being cost-burdened, meaning they spend more than 30% of their income on housing.

Why Housing Matters for Black Families

Housing is a gateway to economic opportunity, determining access to jobs, schools, healthcare, and other critical resources. However, Black families face significant barriers:

• 2.4x more likely to live in healthcare deserts.
• 1 in 5 Black residents live in high-poverty neighborhoods.
• The Black-White homeownership gap has widened to 29%, driven by legacies of discrimination and systemic barriers.

The Wealth Gap and Homeownership

Homeownership remains a key driver of wealth accumulation, yet Black families are significantly less likely to own homes compared to their White counterparts. This disparity contributes to the racial wealth gap, as home equity is the largest financial asset for most middle-income families.

Economic Opportunity: Closing the Gap

Addressing the housing crisis could unlock significant economic benefits:

• $2 trillion added to the U.S. economy by 2035.
• 1.7 million new jobs created, including 55,000 for Black workers.
• 6 million cost-burdened households could benefit from reduced housing costs.

Case Study: Atlanta, Chicago, and Washington, DC

McKinsey’s report highlights three cities with significant housing challenges and opportunities:

• Atlanta: 193,000-unit gap, requiring $63 billion in investment.
• Chicago: 189,000-unit gap, requiring $54 billion in investment.
• Washington, DC: 70,000-unit gap, requiring $22 billion in investment.

Bold Solutions for a Promising Future

The report outlines five key themes to address the housing crisis:

1. Unlock Land Through Creative Incentives

Rezoning for higher-density housing near transit, incentivizing residents with direct financial benefits, and leveraging public-private partnerships can accelerate development.

2. Unleash Private Capital

Streamlining Low-Income Housing Tax Credit (LIHTC) applications, lifting caps on tax-exempt bonds, and expanding CRA-compliant loan portfolios can unlock more funding for affordable housing.

3. Scale Off-Site Home Construction

Modular construction is 20-50% faster and 20% cheaper than traditional methods. Standardizing state and local codes and fostering public-private partnerships can drive adoption.

4. Reinvest in Public Housing

With a $115 billion backlog in public housing repairs, expanding RAD conversions and scaling shared-equity models like community land trusts can preserve affordable units.

5. Revamp Housing Choice Vouchers

Only 1 in 4 eligible families receive vouchers. Pilot programs show that direct rental assistance and improved landlord collaboration can increase lease-up rates.

Supporting Black-Owned Businesses: A Critical Step

At Cashblack, we believe that economic mobility starts with housing, but it doesn’t end there. Supporting Black-owned businesses is a critical step in closing the racial wealth gap and building thriving, equitable communities.