Sunday, May 8, 2016

The Race Tax Part I: Real Estate Property Values

Circa 2002.

I sat and watched TV in my small, one-bedroom apartment. Specifically the local PBS channel because I had no cable subscription. Fresh out of college, with student loan bills due, cable was a luxury that I had few resources to afford. There I sat and a documentary is airing. At that moment, I didn't know the show's title, but the subject matter coupled with the haunting piano soundtrack commanded my attention. I would later learn that I was in fact watching episode The House We Live In of the documentary Race - The Power of an Illusion. If you haven't seen it, I would recommend you watch the free excerpt here.

Until that day, like many I suppose, I only understood that "something" wasn't quite right.

I couldn't fully articulate it, but just knew that being classified as "white" truly meant something wholly different than being classified as "non-white". And then the documentary nailed it:
NARRATOR: ...underwriters warned that the presence of even one or two non-white families could undermine real estate values in the new suburbs. These government guidelines were widely adopted by private industry. Race had long played a role in local real estate practices. Starting in the 1930's, government officials institutionalized a national appraisal system, where race was as much a factor in real estate assessment as the condition of the property. Using this scheme, federal investigators evaluated 239 cities across the country for financial risk.
OLIVER: So that those communities that were all white, suburban and far away from minority areas, uh, they received the highest rating. And that was the color green. Those communities that were all minority or in the process of changing, they got the lowest rating and the color red. They were "redlined." As a consequence, most of the mortgages went to suburbanizing America, and it suburbanized it racially. 
Me: And in that instance, many lingering illusions that I had were shattered.

The episode continues:

JACOBSON: The racial logic adopts the principle that an integrated neighborhood is a bad risk, is a financial risk. That an integrated neighborhood is likely to be an unstable neighborhood. Uh, unstable socially, but therefore also unstable economically. 

NARRATOR: When the white residents of Eight Mile Road in Detroit were told they were too close to a Black neighborhood to qualify for a positive FHA rating, they built this six foot wall between themselves and their Black neighbors. Once the wall went up, mortgages on the white properties were approved. Between 1934 and 1962, the federal government underwrote 120 billion dollars in new housing. Less than 2% went to non-whites
 And more:

NARRATOR: In 1966, the Frisbys moved from Queens to suburban Roosevelt, only a few miles from Levittown. Like the Frisbys, many non-white families would discover the economic value of race in the real estate market. They watched as their homes and neighborhoods in suburbia declined precisely because they had moved into them.
FRISBY: When I moved into a neighborhood, I thought it would stay intact the way it was. On the street that I moved on when I moved there, it was predominantly white. Within two years, it was predominantly Black. 
 NARRATOR: It was called "block-busting." Real estate agents preyed on the racial fears of white homeowners to get them to sell their homes quickly, for less than market value. The homes were resold to non-whites at inflated prices.
And alas:

NARRATOR: It wasn't African Americans moving in that caused housing values to go down.... it was whites leaving.  

Full Episode Transcript here. be continued.

 Eric Spann (Copyright 2016)

No comments:

Post a Comment