A Tax on Blackness

Racism is still rampant in real estate.

2015/5/14-In 1934, Homer Hoyt wrote a dissertationā€”ā€œOne Hundred Years of Land Values in Chicago: The Relationship of the Growth of Chicago to the Rise of Its Land Values, 1830ā€“1933ā€ā€”that ranked various races and nationalities by order of ā€œdesirability.ā€ Most desired were the old American stock of Anglo-Saxons and Northern Europeansā€”English, Germans, Scots, Irish, and Scandinaviansā€”followed by Northern Italians, Czechoslovakians, Polish, Lithuanians, Greeks, ā€œRussian Jews of the lower class,ā€ South Italians, and at the bottom of the list, ā€œNegroes and Mexicans.ā€

Hoyt, as chief economist of the Federal Housing Authority, wanted to improve the accuracy of real-estate appraisals so that an affiliated agencyā€”the Home Ownerā€™ Loan Corporation, established by the Home Ownersā€™ Refinancing Act of 1933ā€”could standardize the process for making mortgage loans, avoid undue risks, and bail out homeowners who lost their homes in the economic crash. Working with Hoyt at the FHA, the HOLC would map cities and divide neighborhoods into various risk categories that were based on his ethnic hierarchy and coded accordingly. A ā€œgreenā€ neighborhood was white, affluent, Anglo-Saxon, and appropriately Protestant. A ā€œblueā€ one had less desirable whitesā€”Jews, Irish, and Italiansā€”but was stable and upwardly mobile. A ā€œyellowā€ one had undesirable, often working-class whites, and a ā€œredā€ one was predominantly black or Mexican, regardless of wealth or class. And in these ā€œredlinedā€ areas, loans were either expensive or nonexistent, forcing families to rely on speculators and private sales by unscrupulous homeowners.

For whites, there was some flexibility. Journalist Antero Pietila gives a short biography of Hoyt inĀ Not in My Neighborhood: How Bigotry Shaped a Great American City.Ā As he notes, ā€œHoyt allowed that many whites on the lower rungs could become less objectionable once they ā€˜conform to the American standard of living.ā€™ ā€ By contrast, blacks and Mexicans had no chance of overcoming ā€˜the opinion or prejudiceā€™ of the real estate market, even though such bigotry ā€˜may have no reasonable basis.ā€™ That was just the way real estate operated, he wrote. ā€If the entrance of a colored family into a white neighborhood causes a general exodus of white people, such dislikes are reflected in property values.ā€Ā (Emphasis added.)

On Tuesday,Ā New YorkĀ magazineĀ shined lightĀ on ā€œthe grim, racist methods of one Brooklyn landlord,ā€ a developer who does most of his business in gentrifying neighborhoods like Bushwick, Bedford-Stuyvesant, and Crown Heights. As a landlord, he explains, he works hard to get black people out of his buildings. ā€œEveryone wants them to leave, not because we donā€™t like them, itā€™s just theyā€™re messing upā€”they bring everything down. Not all of them.ā€ He continues: ā€œIf thereā€™s a black tenant in the houseā€”in every building we have, I put in white tenants. They want to know if black people are going to be living there. So sometimes we have 10 apartments and everything is white, and then all of the sudden one tenant comes in with one black roommate, and they donā€™t like it. They see black people and get all riled up, they call me: ā€˜Weā€™re not paying that much money to have black people live in the building.ā€™ ā€

This is obviously racist, but itā€™s also unsurprising. As the Hoyt story shows, this discrimination is in the DNA of American real estate. For most of the last century, lenders and brokersā€”including national realtor organizationsā€”used race as a proxy for neighborhood value. ā€œAppraisal manuals,ā€ writes Pietila, ā€œcontinued to repeat Hoytā€™s hierarchy until the 1960s ā€¦ implying that the groups lowest on the ladder were detrimental to housing values.ā€ These manuals also pushed realtors and homeowners to use private agreementsā€”called covenantsā€”that forbade sale to ā€œundesirableā€ neighbors.

Housing discrimination is illegal, and most Americans expressĀ egalitarian beliefs on race. But while unused and largely forgotten, Hoytā€™s hierarchy retains its symbolic force in housing markets, albeit in diminished and simplified form. Indeed, real-estate racism helps illustrate the extent to which culture is built by institutionsĀ andĀ individuals, in interactions that reflect on each other. These institutions, private and public, didnā€™tcauseĀ racism in housing markets, but they gave it official sanction, whichā€”over timeā€”influenced how individuals understood the value of their homes and neighborhoods. A white neighborhood was a good one; a black neighborhood, a bad one.

We see this in public opinion. Twenty-eight percent of whites support an individual homeownerā€™s right to discriminate on the basis of race when selling a home, note researchers in their analysis of the General Social Survey, a long-running study that measures Americansā€™ attitudes on a wide range of topics. Likewise, when asked in 2008, 20 percent of whites said their ideal neighborhood was all white, 25 percent said it had no blacks, and 33 percent said it had neither Hispanics nor Asians. And only 25 percent of white respondents said they would live in a neighborhood where one-half of their neighbors were black.

We see it in the actions of landlords and real-estate agents. Compared to whites,according toĀ a 2013 study from the Urban Institute and Department of Housing and Urban Development, black renters learned about 11 percent fewer rental units and black homebuyers were shown roughly 20 percent fewer homes; Asian renters learned about 7 percent fewer properties, while Asian homebuyers also learned about 20 percent fewer homes; and Latino renters learned about 12 percent fewer units. (There was no difference in the treatment of Latino homebuyers.)Ā As NPR points out in its analysis, this wasnā€™t a regional problem: Researchers ran their experiment in 28 different metropolitan regions, with similar results.

Finally, we see it in the financial penalty that accrues to middle-class blacks who live in predominantly black, middle-class neighborhoods. Hereā€™s how theĀ Washington Postdescribes the phenomenon,Ā writing about the largely black Prince Georgeā€™s County, Maryland. ā€œMost whites live in largely white neighborhoods, where homes often prove to be a better investment because people of all races want to live there. Predominantly black communities tend to attract a narrower group of mainly black buyers, dampening demand and prices, they say.ā€ For wealthy blacks who bought into Prince Georgeā€™s County for the comfort they felt in a mostly black community, that ā€œmeant their home brought them less wealth than if they had purchased elsewhere.ā€

Put differently, they suffered a kind of tax that reflects the stigma associated with blackness, independent of wealth or status. It doesnā€™t matter how rich the inhabitants are. If a neighborhood is black, other groups donā€™t want to live there, hurting the value. And on the other end, while we tend to associate gentrification with poor minority neighborhoods, the reality is a little different.Ā According to a Harvard study on Chicago neighborhoods, full gentrification only happened in low-income neighborhoods with substantial white populations, 35 percent. If there’s an equally substantial black population, around 40 percent, the process either slowed, or stopped altogether.

Donā€™t fool yourself into thinking the Brooklyn landlord is a New York problem. He is just a dramatic example of a dynamic that happens in neighborhoods across the country, in subtle, often imperceptible ways. Realtors discourage black and brown buyers; lenders charge higher rates to them; and towns use exclusionary zoning to block subsidized housing and multifamily dwellings, excluding huge groups of low-income people (and not just minorities).

Despite the laws we pass and the values we say we have, discrimination is part and parcel of how Americans do housing. Itā€™s how it was 100 years ago, and itā€™s how it is now.

 

Source: Slate

Jamelle BouieĀ 

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