SAN DIEGO (CN) — A nonprofit group claims in a federal lawsuit filed Tuesday that a San Diego program that helps people of color buy a house in one of the country’s most expensive real estate markets is discriminatory and violates the 14th Amendment, because it’s based on the applicants' racial identity.
The San Diego Housing Commission launched its first-time homebuyer program for people of color last year. It offers either a $20,000 grant toward the down payment of a home and its closing cost, or $20,000 in a deferred loan towards the down payment of a house and an additional $20,000 grant for the home’s closing costs for BIPOC buyers making between 80% and 150% of the area’s median income.
The program was started with a grant from Wells Fargo’s Wealth Opportunities Realized Through Homeownership program, which is trying to “help create an estimated 40,000 new homeowners of color across eight markets by the end of 2025,” according to the company’s website.
In their complaint, a nonprofit called Californians for Equal Rights Foundation says they have members who want to apply for the program, but one or more of them identifies as white, so they don’t qualify for it. This constitutes racial discrimination by the city, the group claims.
“The 14th Amendment’s Equal Protection Clause requires the government to treat its citizens as individuals, not as members of a racial group. The program’s race-based measures violate that constitutional command,” the plaintiffs say in the complaint.
The group is asking the U.S. District Court for the Southern District of California to permanently block San Diego from enforcing the housing program.
”City of San Diego, a public agency, should not expend precious taxpayer funds on handing out government preferences based on race, which is both unconstitutional and immoral. Rather than playing racial favoritism, the city should help first-time homebuyers based on needs,” wrote Wenyuan Wu, the executive director of Californians for Equal Rights Foundation, in an email.
In a press release, Wu added that the city government should give assistance to homebuyers on the basis of merit, not racial identity.
The city does, in fact, already have a program that assists first-time homebuyers of any ethnicity, though the assistance differs from the program. Through the city's original program, which is still operating, low-income buyers looking to purchase their first home can qualify for a low-interest, deferred payment loan of up to 22% of the purchase price for down payment assistance and up to $10,000 in closing costs assistance.
On their website, the foundation describes itself as focusing on equal rights and merit.
“We are in a cultural war,” the group's website states. “The woke culture is destroying America and its future generations!”
Right-wing activist Christopher Rufo, a trustee at the New College of Florida, which helped create the controversy about critical race theory, is listed as a “distinguished adviser” on the foundation’s website.
A 2022 study from the Urban Institute, which evaluated the feasibility of the city’s program to increase opportunities for middle-income Black homebuyers, notes that 29.1% of Black San Diegans owned a home, compared to 54.8% of white San Diegans, and 67.5% of Black residents were paying more than 30% of their incomes to rent a place.
“The lack of homeownership opportunities for Black homeowners is also related to the history of systemic discrimination, including the former practice known as redlining. San Diego was one of approximately 150 cities to have the Home Owners’ Loan Corporation ‘Residential Security’ rankings, which discouraged capital flows into neighborhoods of color and effectively barred people of color from homeownership. This segregation continues today, though there have been improvements,” the authors of the study wrote.
San Diego's Office of the City Attorney declined to comment.
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