Addressing the Racial Homeownership Gap through Customer Experience
By Kate Darling, Amber Chaudhry – U.S. Department of Housing and Urban Development
service design life experiences
Federal priorities call for change
In January 2021, President Biden signed Executive Order 13985 on Advancing Racial Equity and Support for Underserved Communities Through the Federal Government. This executive order mandated that all federal agencies assess how their policies and programs promote or prevent equity. Due to the history of racial discrimination rooted in housing policy, the U.S. Department of Housing and Urban Development (HUD) recognized the racial homeownership gap as an area of focus.
From the 1930s through 1968, when the Fair Housing Act was passed, federal policies excluded Black people and other persons of color from homeownership opportunities. These unjust policies enforced and encouraged practices such as redlining and real-estate steering, which contributed to the racial opportunity gap in American society. Despite the Fair Housing Act, the homeownership gap has continued to increase between Black and white Americans.
A CX approach to equity
As part of the response to the executive order, HUD mobilized an action team focused on the racial homeownership gap. This team consisted of senior advisers and staff from the Office of Policy Development and Research and other relevant HUD programs. They recognized that solutions centered around HUD customers and partner organizations would be needed to address the complex issues of homeownership inequities. The action team partnered with HUD’s CX team to implement a customer-informed approach.
Customer experience is rooted in putting customers at the center of decision making so we can make improvements based on their unique needs. To build equitable solutions that are driven by the customer, HUD sought connections among:
- Evidence of inequities
- Systems where inequities exist
- Lived experiences of underserved populations
Throughout the project, the team gained knowledge across these three layers of understanding. To begin the work, the team reviewed existing research and completed workshops that mapped the homeownership system and helped frame the problem space. Ultimately, meaningful insights were uncovered by speaking first-hand with individuals from underserved groups.
Surfacing evidence of inequities
In starting research with good data, we can create a shared, objective understanding of the inequities that exist today.
To surface evidence of homeownership inequities, the team reviewed research studies, collected evidence of racial disparities in homeownership, and outlined various policy decisions that have contributed to injustice. This work drove informed discussions that led to initial assumptions on why the racial homeownership gap exists and how HUD’s programs and policies may be unintentionally contributing to that gap.
Understanding the systems where inequities exist
When tackling complex issues such as the racial homeownership gap, it can be difficult to identify the most critical problems to solve. Often there is no simple solution, so a holistic understanding of the problem space is necessary.
To understand the systems that impact homeownership inequities, the team looked beyond HUD and acknowledged the factors in someone’s life or in society that could affect their lived experience and outlook on homeownership. The CX team led a workshop series with the homeownership action team that included problem-framing and system-mapping activities. These workshops encouraged open discussion and knowledge sharing. They brought together a diverse set of expertise across the Department including various disciplines, such as social work, research, policy, and human-centered design. This format helped build a common understanding of a very complex problem space.
The team identified eight key forces — including the credit system and the banking industry — that impact someone’s ability to buy a home. Deep discussions around these forces helped the team define clear goals and ask meaningful questions to customers. Due to existing HUD research of racial disparities in wealth and homeownership, HUD identified Black and Latino communities as priority customers for this research.
Uncovering experiences, beliefs, and aspirations of underserved populations
The voices of underserved customers often go unheard. Gaining a deep understanding of these customers and their needs will drive interventions focused on eliminating or reducing injustices.
To uncover goals and aspirations of Black and Latino individuals, the CX team facilitated a series of interviews. Over a four-week timeframe, the team spoke directly with 19 Black and Latino individuals across the nation. Culturally and linguistically diverse research teams helped these individuals feel comfortable sharing their experiences about sensitive topics like personal finances and discrimination. When developing insights, the collaborative nature of the team enabled making meaningful connections between the existing data and the lived experiences of the customer.
Underserved voices can drive change at HUD
HUD completed this research in November 2021. Findings from this research resulted in seventeen insights across five key building blocks to achieving homeownership. In addition to the insights, eight customer-driven opportunity spaces emerged which HUD can use to drive change for those who have historically faced discrimination. These findings supported HUD’s response to the executive order. This work also paved the path for HUD to grow CX research capabilities to elevate customers’ voices across the department.