The Segregating Effects of the Housing Bubble

Suzy Khimm reports on a new paper that demonstrates that, contrary to widely held beliefs, the country’s top metropolitan areas became more segregated from 1995 to 2006.

Khimm notes that many theorized that the housing bubble would have had a desegregating effect, as "easy credit may have helped desegregate low-income neighborhoods as minorities became more upwardly mobile."

However, the paper, published by economists Amine Ouazad and Romain Ranciere in VoxEU, "found that while black families tended to move to more integrated neighborhoods, upwardly mobile Hispanics were more likely to self-segregate."

Furthermore, Khimm points out that affluent white families were able to use easy credit as leverage to buy into less integrated areas.

Even more stunning than the unexpected impact was that, "the segregation that resulted from the credit boom overshadowed what court-ordered desegregation plans had achieved from 1971 to 1986."

Full Story: How the housing bubble increased segregation

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