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]
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 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]
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]
Residential segregation can be defined as, "physical separation of the residential locations between two groups.[28] In the United States, large discrepancies in poverty and affluence have become geographically and therefore racially concentrated. Much residential segregation resulted from the discriminatory lending practice of redlining, which delineated certain primarily minority neighborhoods as risky for investment or lending.[36] This, in turn, created neighborhoods with concentrated, radical disinvestment. Most notably, this geographic concentration of affluence vs. poverty can be seen in the comparison between suburban and urban neighborhoods. The suburbs, which boast large tax bases and large investment, have traditionally been inhabited by primarily White populations, while the majority of urban inner city populations have traditionally been composed of racial minorities.[37] Results from the last few censuses suggest that more inner-ring suburbs around cities also are becoming home to racial minorities as their populations grow and put pressure on the small neighborhoods that they are confined to. As of 2017, most residents of the United States live in "radicalized and economically segregated neighborhoods".[38][verify]
It is proposed that many white residents believe that people of color will threaten public goods and housing values and will therefore work to keep white communities homogeneous with more stringent land use regulations. If land use regulation is able to be used to solve collective action problems inherent to the production of public goods, it would be expected that communities with more stringent regulations would be more likely to maintain demographic exclusivity. From research, it is found that communities that were whiter in 1970 have maintained that demographic profile using land use restriction. Evidence demonstrates that white voters are more likely to support restricting development and more stringent land use to keep cities racially homogenous, maintaining “whiter” cities. This reveals how land use regulations produce further residential segregation in America.[39]
Residential segregation was especially demonstrated during the post-WWI period in metro Detroit, as hundreds of thousands of people migrated to Detroit during the Great Migration due to its need for cheap labor in war industries and shipyards. Detroit's geographical location along waterways allowed it to become an industrial powerhouse with booming shipping and automobile industries. During this time, many blacks migrated from the Jim Crow South to look for new opportunities and work in Detroit, but were unfortunately met with deep-rooted racist ideologies and overall inequality even in this northern city. The institutional barriers in place within housing during the postwar period further marginalized African-Americans in Detroit and strengthened pre-existing ideas of racism and white supremacy. Because many white Detroiters viewed blacks as outsiders that ultimately would devalue their investments in housing and drastically alter their current lifestyles, they were reluctant to allow them to move into their neighborhoods.[40] The Federal Housing Authority's redlining practices reinforced these calls for residential segregation as their policies refused the improvement of black neighborhoods, simply by denying mortgage loans or loans to purchase homes to combat crowding in these black neighborhoods.[40] Blacks were shut out of the private real estate market, with many unable to purchase homes and bankers using federal appraisal policies that unfairly ruled black neighborhoods to be dangerous, risky investments, and were thus able to outright refuse loans to African-Americans.[41]
Blacks ended up living in extremely run-down, crowded areas of the city like Black Bottom and Paradise Valley that were radically disinvested and therefore became blighted. These decrypt houses were very poorly maintained and