Opinion: Black Poverty Is Rooted In Real-Estate Exploitation
Why does it seem many Black communities are stuck in cycles of poverty? According to a new study, the reason lies in how the dream of homeownership was converted into a poverty trap.
Is this the reason why, more than a century and a half after slavery ended, the typical Black family remains so much poorer than the typical white family? Mark Whitehouse asked this question in an opinion piece for Bloomberg.
A study on housing in Chicago showed that generation after generation, the U.S. system of real-estate finance has benefitted whites at the expense of Black people.
Listen to GHOGH with Jamarlin Martin | Episode 08: Marlon Nichols Jamarlin talks with Marlon Nichols, co-founder of Cross Culture Ventures, about the culturally-themed fund he started with Troy Carter.
And when Black people were able to buy homes, they were relegated to certain areas through a practice known as redlining. Then there was the practice of predatory mortgage lending.
“Black families were overcharged somewhere between $3.2 billion and $4 billion (in 2019 dollars). The real estate agents and investors who profited were almost exclusively white, so this represents a direct transfer of wealth from one race to another. Worse, the contracts’ exorbitant terms, along with the lack of equity to borrow against, left Black families without the means to invest in their properties, contributing to the physical decline of their neighborhoods,” Whitehouse wrote.
All these practices combine to Black communities remaining poorer.
“So if you ever find yourself in a predominantly Back neighborhood, wondering why everyone seems so poor, know this: It’s