NJISJ Releases “Erasing NJ’s Red Lines” Report, Tying Generational Housing Discrimination to Racial Wealth Gap

Last week, the New Jersey Institute for Social Justice released Erasing New Jersey’s Red Lines: Reducing the Racial Wealth Gap Through Homeownership and Investment in Communities of Color. The new report shines a light on how generations of structural racism in housing have led to the gaping racial wealth gap in the Garden State, and offers bold proposals to address the problem.

“As this report is being released, New Jersey – along with the rest of the country and the world – is fighting a devastating public health crisis,” said Ryan P. Haygood, President & CEO of the Institute. “As we are experiencing in this pandemic, the cracks of racial injustice in society’s foundation are causing earthquakes in Black and other communities of color. One of those cracks is the staggering racial wealth gap that is largely driven by the generations of housing discrimination laid out in our report, and which can be addressed by our proposed solutions.”

“Our report tells the story of the racialized system in New Jersey that for generations intentionally failed to provide resources to the state’s Black communities – while simultaneously affording its white communities numerous incentives, subsidies and other support to build wealth,” said Andrea McChristian, Law & Policy Director for the Institute. “This system, created by design, has helped cause the dramatic racial disparities in homeownership and home values and the resulting staggering racial wealth gap that exist in New Jersey today. Now we need to design systems to repair the damage.”

With chapters titled Where Are We Now?, How Did We Get Here?, and Where Do We Go From Here?, Erasing New Jersey’s Red Lines takes its readers through the story of how New Jersey, one of the wealthiest states in the country, ended up through discriminatory housing policy with a wealth gap that has white families with a median net worth of $352,000 – and Black and Latina/Latino families, respectively, with median net worth of $6,100 and $7,300.

“The structural racism in housing policy in New Jersey led to our gaping racial wealth gap,” said Jayne Johnson, Sr. Counsel at the Institute. “Black people – through slavery, racially restrictive covenants, exclusion from the GI Bill, redlining and predatory lending practices – have been systematically denied the same opportunities for wealth building through homeownership afforded to white households. These barriers are not a thing of the past and must be addressed through policy change.”

The Institute’s new report proposes six bold policy proposals to reform housing in the state, providing a roadmap for how New Jersey can create a new system of community investment that will help eliminate the racial wealth gap and expand homeownership and housing security in redlined neighborhoods. 

The policies, detailed further in the report, include developing a lockbox fund to deeply invest in redlined communities; enacting legislation to create a reparations talk force (S322/A711); evaluating current homeownership programs with a racial equity lens; creating a statewide Land Bank Commission; supporting the expansion of Community Land Trusts in redlined communities; and the opening by the Attorney General of statewide investigations into housing discrimination and predatory lending.

“By implementing these targeted policies, New Jersey can finally begin to erase New Jersey’s red lines and build a system that allows all to prosper,” added Johnson.

“While some are urging a ‘return to normal,’ our report argues that New Jersey must create a new normal for Black and other people of color,” added Laura Sullivan, Director of the Institute’s Economic Justice Program. “A new normal in which the historical and modern-day red lines are erased. A new normal in which deep, reparative investments are made that build wealth in Black and other communities of color. A new normal that prevents cracks from becoming future earthquakes in communities of color. A new normal in which the incredible prosperity of the Garden State is shared.”

An Executive Summary of the report can be found here.