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Home ownership is at the heart of the American dream. Michael Smith, his wife, Janet, and their daughter, Ashley, were living that dream. They scrimped and saved for a down payment while he worked full-time moving packages for DHL, and Janet, for Chase. Finally, they bought a modest home with a small yard in a safe Chicago neighborhood.

Then the crash of 2008 hit and the bottom fell out.In the space of a few months, DHL eliminated 14,900 jobs–including Michael’s.After sixteen years on the job, he was offered unpredictable, no-benefits, part-time work. Janet was out of work too, and now they didn’t make enough to cover even basic expenses.

That was bad enough, but a lousy, complex mortgage made the situation even worse. Michael told me that, in hindsight, he realized he’d been scammed when his bank had talked him into refinancing his old mortgage. The subsequent foreclosure turned their lives upside down. They lost their home and moved into a rental nearby. Their $17,000 downpayment disappeared. Their credit rating was trashed. Their financial lives were destroyed.

The failure of government regulators to stop mortgage lenders from cheating millions of families like Michael’s is disgraceful. But it isn’t the only government failure—far from it. In 1935, the federal government officially adopted a policy of redlining, a practice that effectively denied home mortgages to families of color, shutting them out of the opportunity to build wealth.

Even after redlining was banned in the 1960s, African-American families couldn’t catch a break. As they bought homes and began to build some equity, sleazy mortgage lenders moved in, targeting communities of color with the worst of the worst mortgages and stripping these families of the wealth they were beginning to build. By the early 2000s, major U.S. banks built up their profits by marketing mortgages that they knew posed huge risks of costing families their homes. And then, when the crash hit, those same lenders pursued the harshest foreclosure practices in those same communities. The result has been devastating: Today, white families have a median net worth of about $171,000, while black families’ net worth is about one-tenth as much—about$17,600.

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It’s time for the federal government to start righting some of the wrongs that the federal government itself caused. Last week, I introduced the American Housing and Economic Mobility Act. My bill is designed to reduce housing costs across the country for both renters and buyers, urban and rural, and one feature focused on grants to first-time homebuyers (or those who have not owned a home in three or more years) living in formerly redlined or officially segregated areas. The bill also proposes investing $2 billion in assistance to families that are still suffering from the financial crisis, and it would help bring more private capital into low- and middle- income communities by strengthening the CommunityReinvestment Act. Together, these provisions would be a meaningful step toward reversing the after effects of decades of discriminatory federal government policy.

It’s important that we do what’s right, and opportunity should not be a limited commodity. America’s housing policy should promote access and lower costs for millions of people. According to an independent economic analysis, my bill will build three million new homes in all parts of the country, and more supply means lower costs for buyers and renters. The bill will also help end needless zoning laws that prevent more affordable housing from being built in good communities—the ones closer to good jobs and good schools. At its peak, the bill would create 1.5 million jobs, and it will down rents by 10 percent—or about $100 per month on average. That’s money families—all families—can spend on health care, child care, or put into savings for a down payment on a home or for retirement.

It’s an ambitious bill, but it won’t add a dime to the deficit or raise taxes on a single middle-class family. The bill covers the cost of new investments by asking 10,000 of America’s richest families to pay more taxes on their estates – the same set of extremely wealthy families that were subject to this tax under the George W. Bush administration. These are some of the same families who quickly recovered from the recession, or even prospered, while the rest of America kept right on struggling. By asking them to pay their fair share, we can build bring down rents for millions of working families and open new doors to home ownership.

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Access to decent housing is a problem for working families everywhere in America. Rural homeowners, for example, have struggled to recover from the 2008 crash and decades of federal under-investment in rural housing has produced too many crumbling and dangerous homes. But Washington ignores all of these problems. Instead of tackling the growing housing crisis in America, Congress continues to shovel money out the door by giving special tax breaks to the wealthy and well-connected.

We can do better. The American Housing and EconomicMobility Act addresses the lingering effects of housing discrimination, the growing housing crisis, and the policies that have held back so many Americans. This bill will help millions of people lower their housing costs and help millions more on the path to making the promise of the American dream become a reality.


Elizabeth Warren is the senior senator from Massachusetts, elected in 2012. She was the driving force behind the creation of the Consumer Financial Protection Bureau, and served as chair of the Congressional Oversight Panel for the Troubled Asset Relief Program (TARP). A law professor for more than 30 years, most recently at Harvard Law School, Sen. Warren is the author of 11 books, including This Fight is Our Fight, A Fighting Chance, and The Two-Income Trap. She lives with her husband Bruce Mann in Cambridge, Mass., and has two children and three grandchildren.