Property values fall once a neighborhood’s black population passes ten percent

Evidence

Those federal policies that boosted white homeownership at black expense still haunt us today because white Americans, the majority of all homebuyers, are still not interested in buying in racially diverse neighborhoods. Studies show that the average black homeowner lives in a neighborhood that is 51 percent black, while the average white homeowner lives in a neighborhood that is 80 percent white. And when that shifts, research shows, property values start falling when black presence in the neighborhood exceeds 10 percent. The values fall even further as black presence increases. Research shows that black Americans are the most “disfavored” of racial and ethnic groups; similar property devaluation has not been found for Latinx or Asian American homeowners. White American preferences create what I have called an “appreciation gap” that depresses the market value of homes in diverse or all-black neighborhoods, while increasing the value of homes in all-white neighborhoods. — Dorothy A. Brown, The Whiteness of Wealth, 210

Studies show that the average black homeowner lives in a neighborhood that is 51 percent black, while the average white homeowner lives in a neighborhood that is 80 percent white. And when that shifts, research shows, property values start falling when black presence in the neighborhood exceeds 10 percent. The values fall even further as black presence increases. Research shows that black Americans are the most “disfavored” of racial and ethnic groups; similar property devaluation has not been found for Latinx or Asian American homeowners. White American preferences create what I have called an “appreciation gap” that depresses the market value of homes in diverse or all-black neighborhoods, while increasing the value of homes in all-white neighborhoods. — Dorothy A. Brown, The Whiteness of Wealth, 210

38. Brown, “Homeownership in Black and White,” 215n64:“ ‘[H]ousing units lose about 16 percent of their value when neighborhood racial composition increases from less than 10 percent black to between 10 percent and 60 percent black….An even larger reduction in housing value is associated with moving from a neighborhood in which less than 10 percent of residents are black to one where at least 60 percent of the neighborhood is black.’ David R. Harris, ’ “Property Values Drop When Blacks Move In, Because…”: Racial and Socioeconomic Determinants of Neighborhood Desirability,’ 64 Am. Soc. Rev. 461, 471 (1999). ‘Western housing loses no more than 33 percent of its value when located in neighborhoods that are more than 10 percent black. By contrast, reductions in annual costs are as much as 40 percent in the South, 52 percent in the Midwest, and 70 percent in the Northeast for dwellings located in neighborhoods that are more than 10 percent black.’ Id. at 472. The data Harris used are from the Panel Study of Income Dynamics, a longitudinal survey conducted annually and initiated in 1968. Id. at 467. At the time of the study, it included data on 37,500 individuals who resided in one of 4,800 initial sample households (including co-residents or offspring) across the country. Id. He looked at the pricing data paid for homes bought and sold. Harris concludes that ‘[t]hese race effects are highly significant, both statistically and substantively, and are consistent with the observation that “property values drop when black families move in.” ’ Id. at 471. — Dorothy A. Brown, Getting to Reparations, 1340

Categorization

• QUESTION: What is the proposed mechanism behind the 10-percent threshold — is it simply white flight demand, or something measurable in the appraisal process itself?
• XREF: The 10-percent tipping-point finding echoes classic tipping-point and neighborhood transition literature (Schelling, Massey & Denton’s American Apartheid), worth cross-checking for the census year and sample. — connects to: Black homeownership actually raised property values in Mozley Park — Kevin M. Kruse, White Flight: Atlanta and the Making of…, 179; Federal housing policy institutionalized the equation of black occupancy with falling property values — Kevin M. Kruse, White Flight: Atlanta and the Making of…, 144; Black occupancy raised Mozley Park property values despite white predictions — Kevin M. Kruse, White Flight: Atlanta and the Making of…, 179
• DEFINE: Introduces and defines her coined term ‘appreciation gap’—a core concept threaded through the book’s later tax arguments.
• SEED: The 10-percent black-presence threshold at which values fall is a precise, citable number usable in writing about segregation economics.
• SHARE: The Panel Study of Income Dynamics figures (37,500 individuals, 4,800 households since 1968) would interest anyone in empirical sociology or survey methodology.
• corroborated: 4 independent passages support this claim — Dorothy A. Brown, The Whiteness of Wealth: How the Tax…, 210; Dorothy A. Brown, Getting to Reparations: How Building a…, 1340