Report: 'Segregation Tax' Depresses Home Values in Majority-Black Areas

A Brookings report has found that in majority-black neighborhoods, owner-occupied homes are consistently undervalued, leading to negative ripple effects on community prosperity and the ability of residents to accrue wealth. Cumulative losses amount to $156 billion, a so-called "segregation tax."

Patrick Sisson writes, "The researchers noted that, while some of the majority-black neighborhoods they examined exhibited features associated with lower property values, including higher crime rates, longer commute times, and less access to high-scoring schools and well-rated restaurants, their analysis shows that these factors only explain roughly half of the undervaluation."

Accounting as well for the tendency of housing stock in majority-black neighborhoods to be older, with less average space, the researchers still found disparities in value that they peg to anti-black bias. Beyond its effects on individual homeowners, Sisson writes, systemic devaluation reduces the tax base and overall level of wealth present in communities, negatively impacting local education and infrastructure.