4 numbers that explain racial disparities in homeownership – Redlands Daily Facts

By Brentin Mock | Bloomberg

Buying a home is one of the main ways the average American accumulates wealth to pass 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 fighting 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 America.

2019

The year black homeownership hit its lowest rate since the 1970s.

In the 1960s and 1970s, the federal government adopted policies to ban inflammatory practices like redlining, the government-sanctioned program that routinely ranked 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, black homeownership reached the lowest rate since the 1970s, at 40.6%. Meanwhile, white homeownership 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% among black Americans.

$ 48,000

The average amount that homes in black neighborhoods are dumped compared to white neighborhoods, according to a Brookings analysis.

Home selling values, too, have only widened further and further. A recent study by sociologists Junia Howell and Elizabeth Korver-Glenn found that between 1980 and 2015, the appraised value gap doubled between homes in predominantly white neighborhoods and those that are predominantly black or Latin American. 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 taking into account neighborhood, income and education factors. And it cost black families a lot.

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 due to this racial disparity in valuation. In 2017 alone, he revealed 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 blacks use 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, Mich., 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’s money that really robs people of the opportunity to get back on their feet.

9/10

The ratio of American counties where unfair calculations resulted in higher property taxes for many black Americans.

The burden on black Americans is another disparity that has just emerged. He lives in our taxes. Bloomberg survey reveals how property tax assessments in the United States have consistently overcharged the cheapest homes, disproportionately weighing black Americans.

In a review of 2,600 US counties, more than nine in 10 reflected the same pattern of inequity, “a classic example of institutional racism,” said Christopher Berry, a professor at the University of Chicago who conducted the study. High taxes increase 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 Paycheck Episode 4, Bloomberg reporter Jason Grotto talks with black resident Di Leshea Scott about his tax ordeal. She lost her house to an inflated tax bill and now rents the house she previously owned.

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