Homes In Black Neighborhoods Are Undervalued By $48K Each. That’s Around $156B Overall

Homes In Black Neighborhoods Are Undervalued By $48K Each. That’s Around $156B Overall

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Homeownership is still something the eludes many Black Americans, due to longterm redlining policies, among other factors. And when Blacks do own homes, it seems they are extremely undervalued.

Black home ownership is down to record lows — down to similar numbers in the 1970s. The new study’s findings make things even more grim for Black who want to own or who are home owners.

In fact, according to a new report from the Brookings Institution and Gallup, homes in African-American neighborhoods are undervalued by $48,000 per home, on average, compared with comparable homes in other neighborhoods. This discrepancy translates to a cumulative loss of a whopping $156 billion in potential wealth accumulation. 

The report, The Devaluation of Assets in Black Neighborhoods: The Case of Residential Property, “found that in U.S. metropolitan areas, homes in neighborhoods that are at least 50 percent African American are valued at roughly half the price of those in neighborhoods with few or no Black residents, with a strong correlation between a higher percentage of African Americans and lower median market value,” Philanthropy News Digest reported.

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According to the study, metro areas with lower home values in African-American neighborhoods, such as Bridgeport-Stamford-Norwalk, Connecticut; Charleston-North Charleston, South Carolina; and Youngstown-Warren-Boardman, Ohio, are more segregated.

There are many reasons behind these figures.

“For much of the 20th century, the devaluing of Black lives led to segregation and racist federal housing policy through redlining that shut out chances for Black people to purchase homes and build wealth, making it more difficult to start and invest in businesses and afford college tuition,” The Brookings Institution reported.

The report found that neighborhoods that are majority Black have $609 billion in owner-occupied housing assets and are home more than 3 million businesses. And in the average U.S. metropolitan area where the population is 50 percent Black, homes are valued at roughly half the price as homes in neighborhoods with no Black residents.

“Homes of similar quality in neighborhoods with similar amenities are worth 23 percent less ($48,000 per home on average, amounting to $156 billion in cumulative losses) in majority Black neighborhoods, compared to those with very few or no Black residents,” the report states.