4 numbers that explain racial disparities in homeownership – Pasadena Star News
By Brentin Mock | Bloomberg
Buying a home is one of the main ways the average American accumulates wealth to pass it on to their children. But this is something that white families have been able to capitalize on far more than black families.
You can’t understand the racial wealth gap in America without addressing historic federal housing policies that have led to deep disparities in homeownership rates.
Here are four numbers that illustrate the persistence of racial disparity in homeownership in the United States.
The year black homeownership hit its lowest rate since the 1970s.
In the 1960s and 1970s, the federal government enacted policies to ban inflammatory practices like redlining, the government-sanctioned program that routinely labeled entire black neighborhoods as the riskiest investments. This practice meant that very few people in black neighborhoods could buy homes, or even get loans to improve homes that had already been purchased.
But despite federal reforms, over the past decades the disparities between black and white homeownership have not improved.
In fact, in the second quarter of 2019, homeownership among blacks hit the lowest rate since the 1970s, at 40.6%. Meanwhile, whites’ ownership soared in early 2019 to 73.1%. The following year ended with slightly higher rates but a similar disparity: 74.5% for white Americans in the last quarter of 2020, and 44.1% for black Americans.
The average amount that homes in black neighborhoods are dumped compared to white neighborhoods, according to a Brookings analysis.
Home sales values, too, have only grown further apart. A recent study by sociologists Junia Howell and Elizabeth Korver-Glenn found that between 1980 and 2015, the estimated value gap doubled between homes in predominantly white neighborhoods and those in predominantly black or Latino neighborhoods. Another study from the Brookings Institution found that homes in black neighborhoods are 23% undervalued compared to white neighborhoods, or an average of $ 48,000 per home. This is even after controlling for neighborhood, income and education factors. And it cost black families enormous wealth.
156 billion dollars
The cumulative amount of equity that black families have lost in a single year due to the undervaluation of their homes.
This same Brookings Institution study quantified the amount of money lost because of this racial disparity in valuation. In 2017, he found that black families lost a total of $ 156 billion due to this undervaluation. Study author Andre Perry quantified what that money could have paid:
It is said to have funded more than 4.4 million black-owned businesses based on the average amount used by blacks to start a business. They would have paid over 8 million university degrees based on the average amount of public education. He is said to have covered the pipes in Flint, Michigan, 3,000 times. And that would have covered all the damage from Hurricane Katrina. And that’s double the annual economic burden of the opioid crisis. Now it is money that is really depriving people of the possibility of uplifting.
The ratio of American counties where unfair calculations resulted in higher property taxes for many black Americans.
The burden on black Americans is compounded by another disparity that has only just emerged. He lives in our taxes. Bloomberg survey reveals how U.S. property tax assessments have systematically overtaxed the cheapest homes, disproportionately charging black Americans.
In a review of 2,600 US counties, more than nine in ten reflected the same pattern of injustice, “a classic example of institutional racism,” said Christopher Berry, a professor at the University of Chicago who conducted the study. High taxes drive up the cost of homeownership and cause many people to lose their homes.
Nowhere in the country has this been a more serious problem than in the predominantly black city of Detroit, where a quarter of all homes have been foreclosed on for non-payment of taxes, according to Berry. In Episode 4 of Pay Check, Bloomberg reporter Jason Grotto talks with black resident Di Leshea Scott about her tax ordeal. She lost her house to an inflated tax bill and now rents the house she previously owned.