Equity

 Back when I was in the world of non-profit affordable housing, I came to a realization that the most important thing we were providing our home buyers was not the shelter of a roof and walls, but access to equity.   The ability to access the accumulated value of the house for other purposes.   

One other thing struck me that is related.  At one point, our leadership decided that those of us tasked with actually building the houses, also needed to double as propagandists.  We were given a series of modules designed to impart information that would hopefully inspire our volunteers to even higher levels of commitment to the cause.    Despite that, there was a module that discussed the topic of secure tenure and it's effects on the poor.   Because of my involvement with some blancs trying to buy property in Haiti, the aftermath of the Haitian earthquake, and a conversation about why vast areas of the NW zone were vacant,  this topic interested me.   

Yesterday as I was doing some reading, I came across a phenomenal stat.   The estimated equity in the real estate that is held, but not owned, worldwide is in excess of 9 billion dollars.   That's right, we have people who have lived on a piece of property for years, built a home, tilled the soil, and potentially started a business, but do not own the property.   There are three reasons for this that I've encountered in my experience, although there are probably more.  1.  The government owns the land and refuses to sell it.  2.  The land was purchased or gifted to an absentee owner who has no interest in selling it, even though the land isn't necessarily productive.  3.  Government corruption in the process of buying and gaining title to real estate.

What struck me was that we have people sitting on 9 billion dollars of "equity" worldwide, but who can't access that equity.   If it was possible to grant those people clear title to the property the live on, one wonders what level of economic activity could be unleashed.   The most obvious example can be stated in both a positive and negative fashion.   1. Negative.  Why would anyone invest their limited resources in improving or using land that they don't own?  2. Positive.  If these people were given title to this land, what would they do to increase it's value and productivity or would they use the equity for education to start a business, or for better farm equipment/seed?   

I'm not a mathematician, but it seems like the simple act of confirming people in the secure title to the land they already live and work on, could be a significant path to additional reductions in global poverty.  

This also ties into a lot of conversations that we've been having around the lack of generational wealth in the black community in our cities.   I took a CE course last year on the topic, and am even more convinced that the FDR policy of redlining to prevent minority home ownership is one of the significant causes of the lack of wealth in the black community.  I'd suggest that it's possible that if you look at certain parts of the country, that this policy to deprive black families of this means to accumulate generational wealth and equity could be (arguably) the most significant contributor to the current economic situation in the black community today.  

On the global stage, we can certainly advocate for the confirmation of clear title (and the legal systems to protect it) for those who don't have it.   It seems like a worthwhile goal and one that can benefit millions of people.   Here in the US, it's a much tougher solution and I'm not sure how I'd approach it on a macro scale.    On a micro scale, there are some things I'm doing to help black families purchase homes, but I'm sure there's more.  I'm just not sure what that looks like.