CityLab: How A Neighborhood’s Race Determines Home Values
Also today: The West’s wildfires collide with its housing crisis, and how “Lawtech” can help renters facing eviction.
Home appraisals in predominantly Black and Latino neighborhoods are veering even farther from those in majority-white neighborhoods.
Photographer: Robert Knopes/Universal Images Group via Getty Images
The price is not right: Despite the passage of fair housing laws in the U.S. during the 1960s and ’70s, homes in predominantly Black neighborhoods have generally been appraised at lower values than those in majority-white communities. A new study now finds that the difference in average home appraisals between the two kinds of neighborhoods has doubled since 1980, jumping from $86,000 to $164,000 in 2015.
But the widening race gap can’t be blamed solely on historic racist housing practices like redlining, writes Brentin Mock. The study’s authors also found fault with a standard appraisal practice known as “sales comparison approach,” in which a home’s value is calculated based on the prices of other similar homes that were recently sold from the same neighborhood. The problem with this method is it compares houses to other Black-owned homes that have been undervalued due to the legacy of segregation, essentially grandfathering in discriminatory home pricing that existed before fair housing legislation. Today on CityLab: A Neighborhood’s Race Affects Home Values More Now Than in 1980