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A Racial Divide Persists in Housing

DAILY REAL ESTATE NEWS | TUESDAY, MAY 03, 2016

A housing disparity exists across pockets around the country, studies show.

Home values in predominantly African American neighborhoods have been the slowest to recover from the recession. In a new analysis conducted by the Washington Post, researchers looked at 300 of the largest U.S. metro areas. Homes in four out of 10 ZIP codes where blacks represent the largest population group are worth less now than they were in 2004. That’s nearly double the rate when compared to predominantly white ZIP codes nationwide.

Read more: A Dream Too Far

In the Atlanta metro area, for example, nearly nine in 10 mostly populated black ZIP codes still have home values that are below values from 12 years ago. Home values in South DeKalb remain 25 percent below what they were in 2004.

“The region reflects the complex ways that housing and race have long been intertwined in America,” The Washington Post reports. “Across the country, blacks are less likely to own homes; those who did were more likely during the housing bust to slip underwater; and as a result, a larger share of black wealth has been destroyed in the years since then.”

But the disparities not only exist where blacks have higher poverty levels but were also found in areas where black families are earning six-figure incomes, the analysis showed. Even after controlling for poverty rates and the age and type of housing, the research shows areas with larger black populations were more likely to suffer a steep decline in home values and experience little recovery.

“The explanation isn’t simply about race itself — a house isn’t worth less because a black family owns it — but also about all the inequities that have been correlated with race over time,” The Washington Post story continues. “Black home owners and predominantly black communities who had been barred from earlier generations of lending — victims of discrimination and government policy — were particularly likely to be targeted for predatory loans during the bubble.”

African American families earning around $230,000 a year were more likely during the housing bubble to be given a subprime loan than white families earning about $32,000, according to research by sociologist Jacob Fa­ber. According to Faber, subprime lenders saw them as a profitable group to target.

Source: “‘This Can’t Happen by Accident,’” The Washington Post (May 2, 2016)