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

According to a study, residential segregation and anti-black bias combine to devalue properties in majority-black neighborhoods by an average of $48,000 per home.

1 minute read

December 3, 2018, 7:00 AM PST

By Philip Rojc @PhilipRojc

Race and ethnicity 2010: New York City

Eric Fischer / Flickr

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.

Tuesday, November 27, 2018 in Curbed

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