In December 2018, the Brookings Institute released a report that examined and documented the devaluation of homes in majority Black neighborhoods. The report found that, “Across all majority black
neighborhoods, owner-occupied homes are undervalued by $48,000 per home on average, amounting to $156 billion in cumulative losses.”
As was pointed out, by Andre Perry (lead author of the report) at the Brookings Institute’s “Homeownership while Black” forum, the $156 billion in losses could have gone towards funding for:
4.4 million Black-owned businesses
8.1 million 4-year college degrees at public colleges and universities
It would replace the pipes in Flint, MI 3,000 times
It would fund 97% of Hurricane Katrina costs
That’s a lot of money!
Consequently, the unfair and discriminatory devaluation of Black homes harms Black residents substantially. It increases the racial wealth gap, thereby preventing access to upward mobility.
In case you were wondering why it’s hard for many Black communities to build wealth, start with reading this report.
Here are some highlights from the report:
There is strong evidence that bias has tangible effects on real estate markets, both historically and today. During the 20th century, both explicit government institutions and decentralized political actions created and sustained racially segregated housing conditions in the United States. (page 5)
This has created what has been dubbed a “segregation tax,” resulting in lower property valuations for blacks compared to whites per dollar of income. (page 5)
Contemporary work from social scientists has aimed to sort out whether these lower valuations are caused by differences in socio-economic status, neighborhood qualities, or discrimination. The results tend to show compelling evidence for discrimination. In one study, Valerie Lewis, Michael Emerson, and Stephen Klineberg collected detailed survey data on neighborhood racial preferences in Houston, Texas. They asked people to imagine that they were looking for a new house, found one within their price range and close to their job; they then say to respondents, “checking the neighborhood . . .” and then present different scenarios based on racial composition, school quality, crime, and property value changes
for the hypothetical neighborhood.” (page 5)
Black Americans are highly urbanized. 90 percent live in metropolitan areas, compared to 86 percent of all U.S. residents. And decades after the Civil Rights movement, blacks remain highly segregated. Though blacks comprise just 12 percent of the U.S. population, 70 percent live in neighborhoods that are over 20 percent black, and 41 percent live in majority black neighborhoods.
These majority black neighborhoods may be overlooked as sites for economic development, but they contain important assets, in terms of people, public infrastructure, and wealth. (page 10)
The devaluation of black neighborhoods is widespread across the country. There are 119 metropolitan areas with at least one majority black census tract and one census tract that is less than 1 percent black. In 117 of these 119 metro areas, homes in majority black neighborhoods are valued lower than homes in neighborhoods where blacks are less than 1 percent of the population. Gainesville, Fla. and Sebring, Fla. are the only exceptions.
Download the full report here.
Jessica Ann Mitchell Aiwuyor is a publisher and multicultural communications specialist. To reach J.A.M., email her at JAMAiwuyor@gmail.com.