Fannie Mae takes action to address serious diversity issue in this industry
The housing industry has a diversity problem. Data from the US Census Bureau, the Joint Center for Housing Studies at Harvard, and the Brookings Institute indicate an extremely white industry, even as the country diversifies. 71.6% of all professionals in the housing sector are white, while they represent only 60.1% of the population. Over the past two decades, the housing sector’s workforce has grown by 66%, while the representation of Hispanics or Latin Americans and Blacks has only increased by 5% and 1.98% respectively. These numbers are even more striking in the high-end of the industry – the number of Hispanic CEOs in the housing sector increasing only 4.15% and the representation of black CEOs increasing only 0.34%. . If the current rate of change continues, it will be 114 years before the diversity of the housing industry reflects the diversity of our population as a whole.
Fannie Mae is trying to change that. Through an initiative called Future Housing Leaders (FHL), launched in 2018, Fannie is using her position to diversify the housing industry. The FHL program connects college students to paid summer internships and early career opportunities in the housing industry, with an emphasis on opportunities for historically under-represented groups.
Kenneth Imo (pictured), vice president of the office of minority and women’s inclusion at Fannie Mae, spoke to MPA about how the program will accelerate the pace of change and why the entire mortgage industry should rally.
âWith Future Housing Leaders, we are providing a service to the industry by going to schools, colleges and universities, especially historically black colleges and universities and Hispanic service institutes, and doing all we can to. meet these students early to raise their awareness of a career in the housing industry, âsaid Imo. âThanks to Fannie Mae’s reach and position in the housing industry, we reached out to our service, banking and mortgage partners, explained this initiative to them and told them we would provide them with a list of talented candidates that they can use to support their diversity, equity and inclusion efforts. “
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Imo explained that the FHL program is designed to give young people early exposure to the housing industry. Coming from marginalized communities can mean children aren’t exposed to kitchen table conversations about homeownership, personal finances, and mortgages that other more privileged children might be experiencing. They might not know how much money a person can make as a real estate agent or loan officer, and even if they do, they might not know where to start in this area. The FHL program aims to fill this gap.
Closing the diversity gap in the housing industry will also go a long way in addressing the legacy of systemic racism in home ownership. Unconscious bias studies have shown that real estate and housing professionals might steer a black or Latino buyer to a more monolithic neighborhood and not show them homes they can afford in traditionally white neighborhoods. Concerns have also been raised about appraisals, with appraisers considering lower priced homes if their owners are people of color. Bringing a more diverse outlook into the industry, Imo said, will help remove these unconscious biases before they become entangled in the underlying systems of the housing industry.
Having a more diverse workforce in a real estate agency or mortgage brokerage, Imo said, can lead to brief moments of discomfort or conflict when different perspectives come up, but it also translates to greater creativity, collaboration and better customer service. Through the FHL program, Fannie also tries to foster greater diversity in the leadership of mortgage companies. This, in turn, should translate into more extensive experience and knowledge at the top of our industry.
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Imo believes that the work of improving diversity in the housing sector and in home ownership is a monumental task and cannot be done by one single company or single initiative. He believes, however, that the FHL program will help accelerate the pace of change in this industry and improve it in the process. He believes advancing this change is something all credit professionals can support.
âThe past 14 months have shown that without intentional efforts to tackle systemic inequalities, we are not going to be doing much more than incremental progress,â Imo said. âThere’s a quote from Dr King that says ‘we shouldn’t fall victim to the tranquilizer drug of gradualism.’ And the FHL prevents us from falling into the trap of gradualism. It’s a push mechanism and something that companies that partner with us can use to make meaningful progress. “