Mortgage reparations for Black homeowners approved in Evanston, Ill.

Black residents in Evanston, Ill., became eligible to apply for housing-related funds in an effort to address “historic wealth and opportunity gaps” following a city council vote on Monday.

The $10 million program will offer low, five-figure sums for down payments and closing costs, to pay down mortgage principal, interest and/or late penalties on real property, or to make home repairs. Black residents who were affected by discriminatory city policies or had family members affected by those measures can apply, according to draft criteria. Roughly 17% of Evanston residents are Black and the average home in the city sells for around $400,000, so the funding is sufficient for minimum down payments available in the 3% range.

This appears to mark the first time mortgage-related assistance has been set aside to rectify a more than 30 percentage-point gap between the homeownership rate of Black and white homeownership and wealth disparities resulting from discriminatory public policies.

“This is the first program to have been called reparations, and an initial step on what is hopefully a staircase,” said Mark Alston, owner of Alston & Associates Mortgage Co. and Skyway Realty, and a member of the National Association of Real Estate Brokers’ board. Alston became an advisor to Evanston officials after one of his speaking engagements in Chicago.

The city is funding the reparations out of the first $10 million it collects through its Municipal Cannabis Retailers’ Occupation Tax, which is equal to 3% of gross sales. Using tax funds to pay for wealth-building homeownership is a model that could be replicable nationwide, said Alston.

Evanston has a history of racial discrimination that is not unique to the city but common in the United States, with zoning policies that were aimed at containing the Black population in certain areas, property deeds with racial exclusions and other forms of redlining, Alston said.

The city first approved reparations more broadly through a resolution approved in the summer of 2019, and decided to implement them through a mix of mortgage and housing assistance because studies have shown that residential real estate helps increase familial incomes over time.

“Money for buying commercial properties or something like that could lie down the road,” said Alston. “I think this is a good first building block.”