10 minute read
Many of us in the queer community know what we “should” be doing financially. We just don’t have the same access to information (or wealth) that our cis-het counterparts do.
It’s more expensive to be queer than straight, more expensive to be trans than cis. A lifetime of microaggressions, bullying, discrimination, and ongoing legislation to criminalize our existence wears on a person.
We are tired.
We know we need to save for retirement and prioritize savings. But what good is thinking about retirement when your life is disposable to the government that is supposed to take care of you? What good is a diverse mutual fund when you have to choose between higher rent in a safer community or having money for nutritious food? Who cares about a 401(k) match when you keep getting let go from jobs for vague reasons after you tell them you’re transitioning?
Article Outline:
- Financial Wellbeing & Sexual Orientation
- Queer Discrimination in Housing and Mortgage Lending
- History and Impact of Redlining
- The Trouble with Property Taxes
Financial Wellbeing and Sexual Orientation
Our very own Federal Reserve published a report in 2024 studying the relationship between financial wellbeing and sexual orientation (specifically gay, lesbian, and bisexual), using longitudinal data from 2019 to 2022. Longer-term studies like this are helpful in noticing overall patterns among a population.
It’s one thing to know your gay buddy from college has a thriving IRA and another to see the zoomed-out view and realize he is the exception rather than the rule.
The Federal Reserve’s report states that “our headline result is that LGB people in the US experience significantly more financial vulnerability than previously understood … there is consistent evidence that gay men, lesbian women, bisexual men, and bisexual women are all in significantly worse overall financial health than comparable heterosexual people.”
The study explored five potential influences for these correlations.
Partnership Status: LGB people are less likely to be romantically partnered than their heterosexual counterparts–is a lack of shared resources a factor in the reduced financial wellbeing? Nope. The patterns discovered in the data “do not appreciably vary by partnership status, which suggests there is something unique about the LGB population that is related to financial insecurity.”
Support from Parents: Getting financial help from parents is common for young adults establishing a stable foothold in the workforce–are parents disowning or not supporting their queer kids as much as their straight ones? The study found that LGB individuals are not significantly less likely to get financial help from parents, so this hypothesis is out.
Financial Literacy: Could it be that the LGB community has less access to or interest in financial education, due to discrimination? Alas, the study examined this idea and found that LGB people are not less knowledgeable about financial issues than heterosexuals.
Risk Tolerance: Are the queers less likely to take financial risks? Yes, actually. “…gay men and bisexual women are both significantly less likely … to take financial risk.” However, controlling for these differences in behavior didn’t change the overall findings of the study.
Discrimination: Well, if it’s not risk, literacy, parents, or partnership… What is it? This is the area where the Federal Reserve finally finds traction in identifying the drivers of this financial discrepancy.
Here’s what they found:
- Cultural Bias: Larger gaps in financial wellbeing among Southern states; smaller gaps in Northeast and Western states
- Discrimination: LGB people are significantly more likely to report discrimination based on sexual orientation than heterosexual people
- Violent Crime: Bisexuals are significantly more likely to report being a victim of violent crime than their heterosexual counterparts
Queer Discrimination in Housing & Mortgage Lending
The report’s literature review explores even more findings from past years of research, especially around home ownership.
LGB people are significantly less likely to own a home than heterosexuals. LGB people are more likely to live in higher cost of living areas, which is a factor that isn’t easily controlled, but data indicates that there is also the problem of discrimination among mortgage lenders.
The legal ability to marry does correlate with a higher rate of home ownership among same-sex couples, but there is also “an increase in the mortgage denial gap experienced by same-sex applicants relative to their different-sex counterparts.” So, married queer couples are more likely to buy a home than unmarried same-sex couples, but they face discrimination in the process.
History and Impact of Redlining
The invented term ‘rainbowlining’ is a play on the term ‘redlining,’ a fundamentally oppressive practice built into our modern housing market since its inception. To understand the long-term impact discrimination will have on the LGB population, we can look at the ongoing impact of similar discrimination against the Black community.
FDR’s New Deal included the National Housing Act of 1934, a piece of legislation created to make housing more affordable and decrease foreclosures during the Great Depression. Credit to purchase a home became more accessible… for white families.
A closer look at the details reveals racial discrimination codified into law.
The suburban areas considered most desirable and valuable for lenders were outlined on survey maps in green. “Still desirable” property was outlined in blue, “declining” property in yellow, and the riskiest and least desirable property was outlined in red.
Theoretically sound, right? Better terms for mortgages in less risky locations.
Except that the redlined areas were often Black neighborhoods and contained most of the surveyed cities’ Black households. In fact, between 1945-1959, Black Americans received less than 2% of all federally insured mortgages.
This is not a memory of a faraway time in the past. It is America’s living history.
The effects of redlining continue to impact Black home buyers and generational wealth of Black families. While white suburban families were able to mortgage a home and pass it down to their children, it was more difficult to get a loan for Black families in the first place–and when they did, mortgage rates tended to be higher as a result of the perceived risk to the lender.
Homebuyer.com provides a breakdown of national mortgage data:
- Market Share: Black buyers received 7.65% of mortgages approved in 2024 (compared to 66.2% purchased by white buyers)
- Mortgage Approval Rates: 74.52% of mortgage applications were approved for Black applicants in 2024 (compared to 87.69% for white applicants and 90.14% for Asian applicants)
- Mortgage Origination Fees: Black home buyers had the highest average origination fees for mortgages in 2024 (0.769% compared to 0.599% for white buyers)
The entire housing market continues to disenfranchise Black people by design.
The Trouble with (Property) Taxes
In 2023, nonpartisan economic research group Brookings reported on the racial disparity in property taxes, a topic that used to have a federal fact sheet that has since been deleted from the White House website for some unknowable and mysterious reason.
At the time Brookings released their report, nearly three quarters (72.7%) of white Americans owned their home, compared to only 44% for Black Americans.
The IRS tax code offers tax breaks to home buyers whose families have wealth to share–you can give up to $19,000 without having to report the gift on a gift tax return, and the recipient doesn’t have to pay taxes on the gift or report it as income. (This limit changes year to year; $19,000 is the limit for 2026).
This $19,000 loophole is very helpful when buying a home–if your family has the wealth to spare, which most Black families don’t. Brookings reports that the median Black household wealth is just $14,100, compared to $187,300 for white households (that’s a difference of about 13x).
Bullshit, right?
We’re not even close to done.
Property taxes are ostensibly a good thing. They funnel a share of local wealth into communal funds for the betterment of the local community. The promise of public education and filled-in potholes often makes the tax bill an easier pill to swallow.
However, Black homeowners are over-taxed on their property at a significant rate. Researchers from Indiana University and UC Berkeley found that Black households pay 10-13% more in property tax than comparable homes owned by a white household.
Brookings’ report also explores discrepancies in home appraisals as well. “…real estate appraisers often undervalue Black-owned homes by 21% to 23%, which lowers the price a home is likely to be sold for.”
And if your rage is not incandescent enough, “data shows that homes lose approximately 16% of their value once the neighborhood’s population of Black residents reaches 10%.”
Similar to the way a brand new car loses a huge chunk of value as soon as you drive it off the lot, a home’s value loses a huge chunk as soon as a Black person takes ownership of it.
To summarize:
- Black buyers are less likely to be approved for a mortgage
- Black buyers are subject to higher interest rates and fees on approved mortgages
- Black buyers are less likely to receive financial gifts from family to help purchase a home
- Black homeowners pay 10-13% higher property taxes
- Black-owned homes are valued 21-23% lower than comparable white-owned homes
Is it a surprise that Black families hold less wealth, once you see the math? It simply costs more to buy a house if you’re Black.
Bringing It Back to Queer Folks
Thanks for the history lesson, but this is supposed to be an article about queer financial tips, right?
Right! And what I hope you take away is that the discussion of any one oppressed population is interconnected with every other marginalized group.
The discussion about redlining and anti-Black bias in the housing market is innately linked to the discussion about anti-LGB bias in the housing market.
Understanding redlining is key when discussing any discrimination in housing. It’s the model for built-in systemic bias. Because we understand redlining, it’s easy to imagine a few generations into the future to know that the gap in LGB homeownership will continue to widen just like it has widened across racial divides.
We already know what happens when a demographic is excluded from building generational wealth. Black people know. Disabled people know. Working class people know. Immigrants know. Neurodivergent people know.
Which is how we got on this whole topic in the first place, knowing we’re “supposed” to do money / retirement / home ownership a certain way, but never being able to reach it no matter how many of the rules we follow.
Because the rules aren’t for us… they’re for the preservation and growth of white, straight, Christian, able-bodied wealth.
Sources:
Avenancio-Leon, Carlos and Howard, Troup (2020). “The Assessment Gap: Racial Inequalities in Property Taxation.” Indiana University, June 2020.
Carpenter, Christopher S., Kabir Dasgupta, Zofsha Merchant, and Alexander Plum (2024). “Sexual Orientation and Financial Well-Being in the United States,” Finance and Economics Discussion Series 2024-048. Washington: Board of Governors of the Federal Reserve System, https://doi.org/10.17016/FEDS.2024.048.
Geldand, Mark (1975). A nation of cities: the Federal government and urban America, 1933-1965. Oxford University Press, New York.
Hanifa, Raheem (2021). “High-Income Black Homeowners Receive Higher Interest Rates than Low-Income White Homeowners.” Harvard University Joint Center for Housing Studies, February 16, 2021.
National Fair Housing Alliance (2025). “The State of Equitable Homeownership 2025 Report.”