The state of housing inequality in Colorado in 2021

Clear disparities in the ability to build wealth through property still exist

For many Black families, the American dream of homeownership in a community with good schools and economic opportunities remains more dream than reality.

The COVID-19 pandemic has further widened the already-cavernous wealth gap between Black and white communities and exacerbated inequalities that are the reality for Black families across the U.S.

New research shows that the long history of housing discrimination in the United States, though somewhat mitigated by the Fair Housing act of 1968, has had a devastating ripple effect that continues to plague Black families, preventing access to affordable housing, fair bank loans, and the ability to build wealth through home ownership.

Consider the following:

  • The average Black family has less than one-tenth the household wealth of white families: approximately $12,780 in household wealth for Black households compared to $139,300 for white.
  • The average median listing price in predominantly Black metro areas is $167,508, compared to $355,000 in neighborhoods where the percentage of Black residents is under 1%.
  • Houses in Black neighborhoods are valued at less than half as much as houses in neighborhoods where less than 1% of the residents are Black. In some metros, houses in non-Black neighborhoods are valued over 600% more than Black neighborhoods.
  • Black families pay $500 million more per year in interest on home loans than white families with similar credit scores.

Colorado’s chasm between the haves and have-nots

It’s true that Colorado’s property values are booming. Denver ranked as the fifth-best market for real estate investment, a boon for property investors looking to buy, sell or reinvest their capital gains.

But disparities between white and Black ability to build wealth through property still exist.

Colorado’s Black families are 62% less likely to own a home than white families. In the Denver market, the gap in home ownership is almost 32%, disproportionately larger now than it was 50 years ago.

The median home price in 2020 in Denver zip codes where the Black population is less than 1% was $650,856. In zip codes where the Black population is greater than 20%, the median price dropped sharply to $390,900.

Similarly, average home values in Denver neighborhoods with a greater than 20% Black population were $373,568 compared to $448,337 for zip codes with less than 1% Black population.

In the renter’s market, Colorado ranks 9th in the U.S. for the gap between income and housing costs. A minimum wage worker must work 71 hours a week to afford a fair-market one-bedroom apartment in Colorado.

Affordable housing is out of reach for many, even as they look outside of metro areas such as Denver and Boulder to areas like Aurora for more reasonably priced housing to rent or buy.

Black families face barriers to building wealth

Traditionally, homeownership is a major factor in wealth building, but in the last fifteen years, Black homeownership has declined more sharply than for any other racial group in the U.S.

Without intergenerational wealth, Black families are statistically more likely to carry heavy student loan debt and potentially have to defer it, have greater instances of bankruptcy, and are more vulnerable to subtle discriminatory practices when applying for a fixed mortgage.

Some gains have been made, however, as Black middle-class millennials are changing the landscape. One analysis shows that 5% of homebuyers in the first three quarters of 2020 were Black, which equates to a 3% rise since 2019.

Strategies like banking stimulus checks in savings, reducing personal spending and taking advantage of record-low mortgage rates have allowed Black millennials access to homeownership that may previously have been out of reach. Although a step in the right direction, this 5% is still too low.

The benefits of closing the wealth gap

The burden of wealth inequality affects the overall economy, not just Black communities.

Solutions for closing the gap are complex, varied and anything but quick fixes, but consider the following when it comes to addressing homeowner disparity:

  • Equalizing homeownership rates alone would decrease the racial wealth gap by more than $40,000.
  • Revitalizing Black neighborhoods can lead to a healthier economy: Every 10% increase in total housing market wealth translates to $147 billion in additional consumer spending.
  • Building just 100 new low-income housing units could immediately create 80 jobs, plus an additional 72 jobs supported by ripple effects and new residents.

Revitalizing neighborhoods benefits not only local residents but also strengthens the local, regional and the national economy overall. Homeownership has a stabilizing effect, attracting more businesses, jobs, and brighter economic outcomes to the surrounding area.

Dream Builders 4 Equity, a 501(c)3, is using its cornerstone Real Estate Program to provide youth aged 16 to 24 in the St. Louis area with employment, training and mentorship. Working alongside minority contractors, they rehab vacant homes to be sold to first-time home buyers.

Their youth-centered model allows participants to develop skills for upwardly-mobile, living-wage careers, in addition to mentorship by successful role models who look like them.

Dream Builders 4 Equity’s five-year plan includes rehabbing 25 vacant homes for first-time home buyers, infusing more than $5.6 million into the community through minority contractor revenue and labor wages, and creating 250 living wages jobs. The model is highly adaptable and scalable for virtually any U.S. metro area — including Denver and other Colorado cities.

Closing the American wealth gap requires addressing its root causes at every level, including the long-standing systemic inequities of racism and discrimination. It will not happen overnight, or with a single solution, but wealth generation through homeownership is one tool that must be available to all Americans if the gap is to close permanently.

Kristen is the PR editor at Clever, a real estate data firm. In her free time, she enjoys reading, traveling, and cheering on the Denver Broncos and Missouri Tigers. Connect with Kristen on LinkedIn, or reach out to her at

Categories: Industry Trends, Real Estate