Several years ago, I met Dan Kornelis, Forsyth County's director of Community and Economic Development. Dan told me about a little-known program in our county that, over two decades, has helped more than 800 residents move from renting to home ownership. The majority of recipients are Black families who were employed, had lower-than-average incomes and were longtime renters. It seemed a remarkable program, yet I had never heard of it in my three decades of living here. I was immediately intrigued by what stories they might tell. Hundreds of notebooks, each one chronicling a recipient’s experience with the county program, lay waiting to be explored and analyzed. It was a researcher’s dream.
The program promotes homeownership among low- to moderate-income residents by subsidizing down payments for qualified homebuyers, mainly first-time ones. Federal funding for the program is administered through government organizations. Participants put about $1,000 each of their own money toward down payments.
As many of us know, home ownership can be one of the principal ways to build wealth for families over time, and to pass this wealth onto future generations — sometimes through helping their children with down payments for their first homes. Yet white families have almost eight times more wealth than Black families, according to a 2019 Brookings study. That’s not surprising, given our history of racial inequities, yet there has been little change in this gap over the past decade.
Given that our county ranks near the bottom in economic mobility, we wanted to know if this program might narrow that wealth gap. We had so many questions that could only be answered through a careful data analysis. What is the return on the county’s investment? Did recipients accumulate wealth? What were qualities of their new neighborhoods? Was the county spending too little money? Too much? What were the foreclosure rates?
My CSEM colleague, research analyst Zach Blizard, oversees the study and works with Bianca Green, the program’s loan officer and geographer Joseph Sloop at MapForsyth. Two CSEM working papers document the wealth accumulation and the impact on quality of life changes for the 508 recipients for which historical data was available.
CSEM’s study, which was free of charge to the county, finds that the program unambiguously builds wealth for homeowners, shores up the county tax base and improves the quality of life for the recipients. Here is just a sampling of our findings:
- The average county assistance was just around $2,000 per recipient.
- Over 15 years of study, fewer than 8% of homes were foreclosed upon, yet the studied group contributed more than $6.2 million in property taxes.
- On average, recipients accumulated more than $34,000 in net equity in less than a decade.
- Blacks and whites had very similar outcomes.
Upon leaving their old neighborhoods, participants purchased homes in new neighborhoods with:
- Crime rates that are 90% lower.
- Far higher rates of homeownership.
- A slightly higher education rate.
- Median household incomes that were about $5,000 higher.
We are gratified by the support of the county in objectively unpacking the data. In numerous interviews with CSEM, participants credit the program with increasing their economic mobility. Instead of throwing money away on rent, Devvon Mack of Rural Hall has said she is now investing it in her home and building equity wealth. “I just feel like I can do anything, buying real estate or investing,” she said. “It’s made me confident in myself.”
It is time we let the world in on the county’s best-kept secret on improving economic mobility. CSEM is producing a documentary film on the program, "The Forgotten Notebooks," which highlights the achievements and is aimed at informing other counties nationwide of the program’s successes. The lessons learned from our county program could potentially transfer to other counties and cities grappling with the same types of economic mobility challenges.
Richardson is the founding director of the Center for the Study of Economic Mobility at Winston-Salem State University.