East Liberty Development, Inc. is focused on increasing minority homeownership opportunities in East Liberty’s Enright Court.
Gerald McClendon never thought he would become a homeowner. An East End resident all his life, he was always a renter—first at one of East Liberty’s high rises and then after at the Penn Mall Apartments for 18 years. It was a conversation with East Liberty Development Inc.’s executive director, Maelene Myers, in 2018 that made him realize homeownership actually wasn’t too far of a stretch.
“She told me, ‘You know Gerald, once you get things together, I think Enright Court would be a great option for you. There are nice townhomes there, not too big, probably within your budget. You’re qualified for different funding. That would be a great fit for you,’” Gerald said.
Building generational wealth in East Liberty has been on the agenda of East Liberty Development Inc. (ELDI), East Liberty’s community development corporation, ever since they began fostering the neighborhood’s revitalization in the late seventies and early eighties.
Once a vibrant commercial hub that boasted eight theaters and a thriving regional business district, 1960s urban renewal redevelopment transformed East Liberty’s commercial core into a suburban-style pedestrian mall, causing the relocation of many residents and driving traffic and businesses away from the neighborhood. By the 1980s, East Liberty had a few faithful businesses from its glory days and a committed population of residents who helped anchor the community, but the neighborhood had also become known for its crime and sea of vacant buildings.
Building equity and generational wealth in East Liberty
ELDI was tasked with steering new investment and opportunity to the neighborhood. During the late 1990s, the organization held hundreds of community meetings with long-time local residents to hear their struggles and hopes for the neighborhood. Neighbors described their vision of a self-sustaining, mixed-income community that would return East Liberty to its former vibrancy.
ELDI articulated that vision in East Liberty’s 1999 community plan—A Vision for East Liberty—in which they designed a commercial redevelopment strategy as well as a strategy for stabilizing the neighborhood’s housing stock.
The organization saw first signs of success when commercial development took hold with Home Depot in 2000 and Whole Foods in 2002. While they were working on attracting new businesses to East Liberty’s core, ELDI was also purchasing more than 200 distressed occupied and vacant residential properties throughout the neighborhood, many of which were crime “hotspots.” By intentionally targeting and managing these hotspot properties, crime in the neighborhood dropped by 50% between 2008 and 2012, according to a study conducted by the analytics firm Numeritics. This sparked investment in the neighborhood’s residential housing, which in 2000 was nearly 20% vacant.
Since then, East Liberty has seen a surge of new development that hasn’t let up. But even amidst all this new development, ELDI has worked to preserve affordability. The organization reports that 34% of East Liberty’s residential real estate is permanently affordable housing. From Fairfield Apartments on the corner of Broad Street and Centre Avenue to East Liberty Place on North Beatty Street, ELDI points to the attractive affordable housing that is embedded into the fabric of East Liberty.
With the affordable rental market secured, the organization is focusing their efforts on homeownership—to both ensure that long-time residents are protected from any future changes while also bringing new opportunities for wealth building.
“We want to make sure that those who were around for the hard times are able to stay for the good times as well,” Myers said.
Within this focus on homeownership, ELDI has committed to increasing minority homeownership opportunities in particular. They say that increasing the number of Black and minority homeowners is an essential step to addressing an even larger issue across Pittsburgh and the United States: the Black-white wealth gap.
Defining the Black-white wealth gap in the United States
The Black-white wealth gap is a widely documented reality in the United States. A 2016 Brookings Institute report shows that the net worth for a typical white family is $171,000, nearly ten times greater than that of the average Black family at $17,150. While there are many factors that contribute to this divide, one main driver is homeownership.
In the article “The Roots of the Widening Racial Wealth Gap: Explaining the Black-White Economic Divide”, Thomas Shapiro, Tatjana Meschede, and Sam Osorodemonstrate demonstrate the role homeownership plays in the wealth divide.
Citing census and Joint Center for Housing Studies data, they write, “Homes are the largest investment that most American families make and by far the biggest item in their wealth portfolio. Homeownership is an even greater part of wealth composition for black families, amounting to 53 percent of wealth for blacks and 39 percent for whites.”
Today, homeownership rates among African Americans have declined to below what they were in 1970, just two years after the landmark Fair Housing Act was passed which prohibited housing discrimination.
In 2004, at the peak of the housing boom, nearly 50% of African Americans owned a home. But from 2000 to 2019, census data shows that that gain was more than erased as Black homeownership dropped to 40.6%. At the same time, the homeownership rate among white Americans rose from 71 to 73.1%.
In addition to low homeownership rates among African Americans, research shows that assets in Black neighborhoods are also frequently undervalued.
When Andre M. Perry, author of Know Your Price: Valuing Black Lives and Property in America’s Black Cities, conducted research for The Brookings Institute with his colleagues Jonathan Rothwell and David Harshbarger on the Devaluation of Assets in Black Neighborhoods, he found that homes in Black neighborhoods in America are undervalued by 23%, about $48,000 per home. Altogether that accounts for $156 billion in lost equity for Black families.
“It tells us that there’s racism baked into the housing market,” Perry said in an interview for NPR.
A tale of two Pittsburghs
Looking at the Pittsburgh region, Black homeownership rates are even lower. According to 2018 data from the American Community Survey, only 32% of Black families are able to say they own their home in the Pittsburgh metropolitan area. On top of that, many of those homes have a much lower sale or appraisal value when compared to Pittsburgh averages.
“One only has to look to decades of housing discrimination and discriminatory public policies to understand how it got so bad,” said Ted Melnyk, ELDI’s director of operations.
The City of Pittsburgh’s ForgingPGH report recognizes how those policies have affected Pittsburgh particularly, with some communities benefiting from the City’s recent and much-documented recovery more than others.
The report highlights that in 2010, Pittsburgh ranked as the 17th most racially segregated city of the 50 U.S. cities with the largest population of Black residents.
It goes on to attribute that ranking in large part to the practice of redlining—described in the report as “a method used by mortgage lenders in the mid 20th century to determine where to grant loans, based largely on race.”
This practice effectively blocked non-white Pittsburghers from buying homes in certain neighborhoods, a move which, in combination with other forms of structural racism, has had far-reaching effects that go beyond homeownership.
The City of Pittsburgh’s recently released Gender Equity Commission Report found that Pittsburgh’s racial inequalities led to poorer health, employment, housing, and education outcomes for Black Pittsburghers in comparison to their white counterparts.
“These outcomes are no mistake,” said Melnyk. “They are the legacy of government policies, programs, and practices that were designed to segregate and oppress communities of color.”
Closing the gap through homeownership in East Liberty’s Enright Court
As ELDI turns its focus to building minority homeownership opportunities in East Liberty, the organization is striving to close Pittsburgh’s Black-white wealth gap one home at a time. One example of this is their work to turn renting residents into homeowners in the community of Enright Court.
Constructed in the seventies, Enright Court is a residential enclave of townhomes and two and four bedroom houses that sits just a few blocks east of East Liberty’s commercial core. By 2016, the community had fallen into disrepair due to absentee owners and the lack of a homeowner’s association. In an effort to reverse this trend, ELDI began actively purchasing homes and working with residents to form a “Neighborhood Improvement District” to keep the common areas of the community in good shape.
As they fix up the community, they are also helping Enright Court rental tenants transition into homeownership. The non-profit Catapult Greater Pittsburgh is ELDI’s partner in this project, providing counseling and supportive programs to help prepare the tenants for homeownership.
“We have a plan to make a big difference in a small part of our neighborhood, which sits in the midst of a neighborhood experiencing a really big turnaround,” said Myers.
With funding from the Urban Redevelopment Authority of Pittsburgh, Rebuilding Together Pittsburgh, and other sources, ELDI is rehabbing approximately 16 units in Enright Court for homeowners at 60% or below of Pittsburgh’s Area Median Income.
From renting to homeownership: residents who worked with ELDI to become first-time homeowners
Enright Court in 2019.
Elaine Fleming, a long time East Liberty and Enright Court resident, has been the beneficiary of some of this new investment. Learning about the work ELDI was doing in the community in 2019, she expressed her desire of moving into a four-bedroom home in Enright Court. As a single mother of three kids, the house would give her the extra space her family needed.
That’s when Mary Hester, a real estate agent and affordable homeownership specialist working with ELDI and Catapult, stepped in.
“She took down all of my information and encouraged me to get involved with Circles [Catapult was known as Circles Greater Pittsburgh at that time],” Fleming explained.
Things started moving quickly for Fleming after that. Closing on her home in Enright Court in May of 2020, the whole process took less than a year in total. Fleming says she felt supported by ELDI and Circles throughout the process—the organizations helped her fix her credit, offered free homeownership courses, and guided her through the home loan and rehab process.
“Mary was always there to coach me through it,” she said. “I really had to put my faith in strangers, but they all led me the right way, and I really appreciate that.”
Gerald McClendon was also pleased with how everything came together. He started working with Circles to fix his credit around November of 2018 and got a prequalification for his mortgage with Citizens Bank in January of 2019.
“Once I got serious about it, things really took off and started happening fast,” he said.
According to ELDI staff, both of these families are already realizing equity growth and increased wealth as Enright Court continues to improve. Home values in Enright Court are now commonly in the $130,000 to $150,000 range, more than double what they were five years ago.
“People get nervous when home prices increase, but that’s the secret to growing wealth for many working people in the U.S.,” Skip Schwab, deputy director of ELDI explained. “If you owed $50,000 on your house in 2015, but it only appraised for $50,100, you only had equity or wealth of $100. But if you owe $50,000 and your home is now worth $100,000, that’s $50,000 to put towards your next home, borrow against, or pass on to your heirs.”
Closing the gap in Pittsburgh: the work ahead
While these individual success stories and initiatives are steps in the right direction, ELDI is the first to admit that building Black wealth and equity in Pittsburgh is a task that requires more than the initiative of one non-profit alone.
The City has faced criticism for the lack of affordable housing in Pittsburgh and its handling of developments like Penn Plaza—an apartment complex in East Liberty owned by LG Realty which caused controversy when it evicted more than 200 mostly low-income residents to redevelop the property.
Add to that mix COVID-19 inequities and recent Black Lives Matters protests in East Liberty, and it appears that the issues of race and housing are gaining some overdue attention.
In 2020, the Pittsburgh City Council passed two bills designed to eradicate racial disparities in the city. The first bill outlined the creation of a “Racial Equity Commission” which would advise city officials on how to reduce institutional racism. The second detailed a 10 point plan to eliminate racial disparities, including transforming African American communities of concentrated poverty into healthy, mixed-income communities.
For now, Schwab says that ELDI is committed to doing what they can to close the disparities in their corner of Pittsburgh as well as sharing their expertise with other neighborhoods where they can.
“We are hopeful to continue to grow affordable housing in the East End and beyond.”