Housing segregation in the United States
In the United States, housing segregation is the practice of denying African Americans and other minority groups equal access to housing through the process of misinformation, denial of realty and financing services, and racial steering.[1][2][3] Housing policy in the United States has influenced housing segregation trends throughout history.[4][5] Key legislation include the National Housing Act of 1934, the G.I. Bill, and the Fair Housing Act.[4][6][7][8] Factors such as socioeconomic status, spatial assimilation, and immigration contribute to perpetuating housing segregation.[5][7][9][10] The effects of housing segregation include relocation, unequal living standards, and poverty.[6][11][12][13][14][15][16] However, there have been initiatives to combat housing segregation, such as the Section 8 housing program.[10][17]
Not to be confused with broader separation of neighborhoods, known as Residential segregation in the United States.
Racial residential segregation doubled from 1880 to 1940.[18] Southern urban areas were the most segregated.[18] Segregation was highly correlated with lynchings of African-Americans.[19] Segregation lowered homeownership rates for both blacks and whites[20] and boosted crime rates.[21] Areas with housing segregation had worse health outcomes for both whites and blacks.[22] Residential segregation accounts for a substantial share of the black-white gap in birth weight.[23] Segregation reduced upward economic mobility.[24]
White communities are more likely to have strict land use regulations (and whites are more likely to support those regulations).[25][26] Strict land use regulations are an important driver of housing segregation along racial lines in the United States.[25]
Home ownership[edit]
Home ownership is a crucial means by which families can accumulate wealth.[27] Over a period of time, homeowners accumulate home equity in their homes. In turn, this equity can contribute substantially to the wealth of homeowners. In summary, homeownership allows for the accumulation of home equity, a means of storing wealth, and provides families with insurance against poverty.[28] Ibarra and Rodriguez state that home equity is 61% of the net worth of Hispanic homeowners, 38.5% of the net worth of White homeowners, and 63% of the net worth of African-American homeowners.[29] Conley remarks that differences in rates of home ownership and housing value accrual may lead to lower net worth in the parental generation, which disadvantages the next.[30] There are large disparities in homeownership rates by race. In 2017, the homeownership rate was 72.5% for non-Hispanic Whites, 46.1% for Hispanics, and 42.0% for Blacks.[31]
The value of property has stifled during the history of the United States. Initially, when African Americans were still enslaved, they were forbidden from owning land and those that could were white Americans. As times passed, so did the access to property, allowing African Americans to purchase property within their financial needs. A prime example of how banks and organizations manipulate home ownership, is by offering predatory loans. These loans target lower income individuals, who are normally turned away from the Banks, and given lump sums on a ridiculous interest fee. These fees only provide two outcomes for individuals, either they default on their payments and lose their property or live the rest of their lives in debt.[32] This ranges to everyday items, such as automobiles and homes which are restricted to the individuals that need it the most.[33]
Home equity[edit]
There is a discrepancy in relation to race in terms of housing value. On average, the economic value of Black-owned units is 35% less than similar White-owned units. Thus, on average, Black-owned units sell for 35% less than similar White-owned units.[34] Krivo and Kaufman state that while median home value of White Americans is at least $20,000 more than that of African Americans and Hispanics, these differences are not a result of group differences in length of residences because Asians have the most equity on their homes but have lived in them for the shortest average period. African American and Hispanic mortgage holders are 1.5 to 2.5 times more likely to pay 9% or more on interest. Krivo and Kaufman calculate that the African-American/White gap in mortgage interest rates is 0.39%, which translates to a difference of $5,749 on the median home loan payment of a 30-year mortgage of a $53,882 home. The Hispanic/White gap (0.17%) translates to Hispanics paying $3,441 more on a 30-year mortgage on the median valued Hispanic home loan of $80,000. The authors conclude that the extra money could have been reinvested into wealth accumulation.[35]
Krivo and Kaufman also postulate that the types of mortgage loans minorities obtain contributes to the differences in home equity. FHA and VA loans make up one-third or more of primary loans for African Americans and Hispanics, while only 18% for White Americans and 16% for Asians. These loans require lower down payments and cost more than conventional mortgages, which contributes to a slower accumulation of equity. Asians and Hispanics have lower net equity on houses partly because they are youngest on average, but age has only a small effect on the Black-White gap in home equity. Previously owning a home can allow the homeowner to use money from selling the previous home to invest and increase the equity of later housing. Only 30% of African Americans in comparison to 60% of White Americas had previously owned a home. African-Americans, Asians, and Hispanics gain lower home equity returns in comparison to White Americans with increases in income and education.[35]
Causes[edit]
Neighborhood disinvestment[edit]
Neighborhood disinvestment is a systematic withdrawal of capital and neglect of public services by the city. Public services may include schools; building, street, and park maintenance; garbage collection and transportation. Absentee landlordism and mortgage redlining also characterize disinvestment. As redlining prevents households from owning, they have no choice but to rent from landlords that neglect property and charge high rent.[47] These factors allow the devalorization cycle to occur in a neighborhood, eventually leading to the reclamation and transformation of the neighborhood, uprooting the poor residents who have no equity to use for relocation.[47]
A deeper look into disinvestment in the community can be termed devalorization. This is when neighborhood decline is analyzed by emphasizing the profit taking of realtors, bankers, and speculators which systematically reduces the worth or value of housing.[47] The devalorization of a neighborhood begins to occur when the city decides to begin disinvesting in it, and the disproportionate influx of minorities shift the neighborhood from mostly live-in owners to absentee landlords. These landlords buy up the houses during white flight from the neighborhood and rent them to the minorities moving in for a high price. In Albina, this process was shown through intensive white flight from the neighborhood, and large redevelopment projects that destroyed the heart of the African American community for the remodeling of a veteran's hospital. This project relocated many African Americans into an even smaller area, creating an overcrowded, volatile environment. Most of the community that survived did not own their homes, and the absentee landlords neglected to make repairs on their properties. The relocation of so many African Americans from southern Albina because of the hospital project caused more white flight on the northern side of Albina, creating more opportunities for landlords use the tactic of blockbusting, or using the fear of racial turnover and property value decline to convince homeowners to sell at below-market prices, allowing the landlords to then inflate the cost of the property and extort the new African American home buyers.[47]
The relegation of African Americans to certain contained neighborhoods continues today. The cycle of neighborhood disinvestment followed by gentrification and dislocation of the minority has made it difficult for African Americans to establish themselves, build equity, and try to break out into suburban neighborhoods. If they have the means to relocate, the neighborhoods they relocate to are most likely populated by European American people who support open housing laws in theory, but become uncomfortable and relocate if they are faced with a rising Black population in their own neighborhood. This white flight creates an overwhelmingly African American neighborhood, and then disinvestment begins anew. All of these subtle discriminatory practices leave the metropolitan African American population with few options, forcing them to remain in disinvested neighborhoods with rising crime, gang activity, and dilapidated housing.[6]
Real-estate discrimination[edit]
There is an existence of a dual housing market that results in unequal housing opportunities for different populations of people. The basis of the dual housing market model is that similar housing opportunities are available to different racial groups at different prices. There are many explanations for the existence of a dual housing market.[1][2][3] One theory explains the dual housing market through racial steering. This occurs when real estate brokers steer their clients to specific geographic locations of available housing based on race.[1] Although racial discrimination in housing market processes is outlawed by several court decisions and legislation, there is evidence that it still occurs.[1][2][3] For example, an HUD Housing Market Practice survey found that African Americans felt discriminated against in the renting and/or buying process of housing.[1] Institutional factors, such as realtor agencies withholding housing information or financial institutions denying mortgages, further perpetuate the effects of the dual housing market model.[3]
Another explanation of the existence of a dual housing market is the availability of housing units, either for sale or for rent, for minority groups. Oftentimes, price discriminations results from price fluctuations of property based on the existing demographic of residence in a neighborhood. Racial preference affects the available geographic spaces open to certain minority groups.[2] For example, African Americans are disproportionately found in a small distribution of suburban communities.[3]
Socioeconomic status[edit]
One theory of the cause of residential segregation is the difference in income between minority groups and their white counterparts. The basis of this theory stems from purchasing power: the higher the income, the more likely minority groups are to move to better neighborhoods which in turn results in more integrated neighborhoods.[1][5][7][9] In other words, there seems to be an inverse relationship between a minority group's socioeconomic status and the minority group's level of residential segregation.[50] Many argue that residential segregation occurs because minority groups, particularly immigrants, do not have the wealth or income to purchase homes in more affluent and predominantly white neighborhoods.[1] Although there is a definite relationship between socioeconomic status and residential segregation, the effect of this relationship is different among minority groups.[5][7][9]
In terms of location, poverty-stricken communities tend to reside in the inner cities while affluent communities tend to reside in the suburbs.[9] In addition, better neighborhoods contain better educational services and easier access to various occupations. This spatial and economic segregation further perpetuates residential segregation.[7] Across all minority groups, there is a residential gap based on income. Residential segregation between the rich and the poor, occurring at different rates, takes place across the board.[7]
African Americans and Latinos, compared to their white counterpart, experience a greater difference in income, education, and occupation levels. On the other hand, Asians experience a lesser difference in terms of income, education, and occupation levels when compared to their white counterpart.[5] These factors, education and occupation, influence income and purchasing power of an individual. For African Americans, Asians, and Latinos, higher income resulted in less segregation from their white counterpart whereas lower income resulted in greater segregation from their white counterpart. However, that an increase in socioeconomic status resulted in a greater decrease in segregation for Latinos and Asians and a lesser decrease in segregation for African Americans suggests that socioeconomic status alone cannot explain residential segregation.[5][7]
Spatial assimilation and immigration[edit]
Recent reforms and policies on Immigration to the United States have caused an influx of immigrants from Latin America and Asia.[7][9] The spatial assimilation theory states that immigrants are more likely to experience residential segregation because of a variety of factors such as social networks, family, income, and cultural preference. Upon moving to a new country, immigrants are more likely to relocate to an area where they have feel comfortable and accepted. In addition, their income may only allow them to occupy spaces that are more ethnically diverse.[5] The three generation model is a theory that attempts to explain assimilation across generations. It states that over time, as the children of immigrants become more acculturated, they begin to disperse geographically and assimilate themselves in suburban neighborhoods. Therefore, there is a correlation between residential segregation and the intergenerational process of assimilation.[10]
The acculturation of immigrant children also relates to the socioeconomic status of the parent or parents. As the children become more acculturated to the customs of the host country, they become more comfortable with the cultural norms and improve their speaking abilities. A higher socioeconomic status allows them to disperse from the ethnically concentrated community and move into neighborhoods with better services and quality housing. This process across several generations eventually results in the continued desegregation of more affluent, predominantly white, suburban neighborhoods.[5]
Among all minority groups, foreign-born immigrants experience greater segregation from whites than native-born groups. However, assimilation varies among minority groups. Overall, Latino-white segregation is higher than Asian-white segregation. Black-white segregation is the highest when comparing all minority groups. New immigrants tend to experience higher levels of segregation than immigrants that have lived in the host country for a while.[5]
Effects[edit]
Relocation[edit]
Once their old neighborhood has been gentrified, many of the residents are forced to relocate, if they have not already done so. When hunting for a new residence, African Americans will more than likely encounter discrimination on some level. Audits performed by the US Department of Housing and Urban Development and a later Housing Development Study suggest that if realtors have a chance to discriminate, they usually do.[6] These studies analyzed the number of cases where whites were given more information about available units or financing options or shown extra units in proportion to African Americans. The results showed that whites were systematically favored for both rental and sales units throughout metropolitan areas in the United States. Racial steering was also taken into account during these audits, and it was shown through the results that African Americans were shown homes in areas that had more minorities, lower home values, or lower median incomes that the homes that were shown to European Americans, even if their economic position was the same. It was shown that about one in every three encounters, African Americans were systematically steered to these non-European American neighborhoods.[6]
This segregation is not self-imposed. That is, African Americans do not prefer to live in neighborhoods that are overwhelmingly Black.[6] Survey evidence from a Detroit Area Survey from 1976 shows that African Americans strongly favor the desegregation of the United States, with the overall ideal neighborhood being 50% black and 50% white. Whites, on the other hand, favor neighborhood composition that is dominated by whites. In the same survey, about one-quarter of the whites surveyed said they would feel uncomfortable if their neighborhood exceeded 8% Black. Once the neighborhood reached 21% Black, almost half of the whites surveyed said they would feel uncomfortable.[6]