For anyone who follows Durham politics, most of the contents of a new report on impediments to fair housing in Durham County will be unsurprising: Housing is expensive, it’s getting more expensive, and there isn’t enough of it. 

But on page fourteen of the report—which the county is required to complete on a regular basis in order to be eligible for federal Community Development Block Grant dollars—is a detail that doesn’t always make it into conversations about the Bull City’s housing landscape: African Americans apply for home loans less often and are awarded less money than white borrowers.

According to the report—compiled by the civil and environmental engineering firm Withers and Ravenal as the county seeks $750,000 in grants for neighborhood revitalization—white people, who make up about half of the county’s population, applied for 49 percent of mortgages from 2014–17, and received 61 percent of the approved funds. African Americans, on the other hand, make up about 37 percent of the population; they submitted a quarter of loan applications and got just 20 percent of approved funding. 

The report looks at Home Mortgage Disclosure Act data for the first mortgage on one-to-four-unit homes, including manufactured homes. Emily Edmonds, the consultant who worked on the report, says that, according to HMDA data, Latino residents in Durham County are seeking and receiving mortgages on par with their 13 percent share of the population, though she cautions that HMDA data is sometimes incomplete.

These lending disparities aren’t unique to the Durham, says Kelly Tornow, North Carolina policy director for the Center for Responsible Lending. 

“It’s unfortunately not a surprising report, because it really reflects the national trends that we see when we analyze the Home Mortgage Disclosure Act data,” Tornow says. “It increasingly shows that consumers of color and low-wealth families still lack access to the mortgage market.”

This can have an effect not only on prospective homeowners but also renters. If people can’t buy homes, they rent, adding to demand for an already limited housing supply and driving up prices, Tornow says. According to the report, the median gross rent in Durham County rose from $797 in 2010 to $925 in 2016, and nearly half of the county’s 25,614 renter households were cost-burdened, meaning they spent more than 30 percent of their income on housing costs.

To address these disparities, the report recommends additional outreach to both lenders and potential borrowers, as well as the use of publicly backed mortgage programs offered by federal agencies.

The report doesn’t get into why Durham applicants were denied for loans. However, at the state and national level, borrowers of color are less likely to be approved for mortgages regardless of factors like income and credit score. 

According to the state’s analysis of impediments to fair housing, which was completed in 2015, an applicant’s credit history and debt-to-income ratio were frequent reasons for being denied home loans from 2004 through 2013, “so it is no surprise that denial rates tended to fall as the income of the applicant rose,” the analysis reads. “However, disparities in loan denial rates by sex, race, and ethnicity tended to persist even when income was taken into account.” 

Tornow says these patterns are partly due to the way banks responded to the 2008 mortgage crisis.

“Although very important consumer protections were put in place as a result of the mortgage crisis, unfortunately, there’s also been a restriction of access to credit for borrowers of color,” she says. “Rather than the market really opening up access to credit, allowing more borrowers to access the market, we’re seeing a really high-credit-score requirement and a debt-to-income-ratio requirement that’s actually higher than pre-crisis levels. That really locks people out of the market, and that’s particularly detrimental because it exacerbates the racial wealth gap that we see.”

The stage was set for these disparities long before that, however, through policies like redlining, in which banks refused to give loans in non-white neighborhoods, effectively labeling them undesirable and destroying their property values. Though redlining became illegal a half-century ago, the practice is still a primary contributor to the country’s persistent wealth gap: White Americans have nearly ten times the wealth of African Americans and eight times the wealth of Hispanic Americans. 

“We know homeownership is really the number-one way people can build family wealth and pass that wealth on to the next generation,” Tornow says. “So if you lack wealth and, as a result, can’t get a mortgage, and as a result of not being able to get a mortgage, can’t build wealth—you can see how this cycle continues to perpetuate, particularly for borrowers of color.”