Today, homes in majority Black neighborhoods are devalued by an average of 23% (worth on average $48,000 less per home, or $156 billion less collectively) relative to comparable homes in neighborhoods with very few or no Black residents.
Home prices in Black- majority neighborhoods don’t reflect their real value, and are much lower than otherwise comparable homes in white neighborhoods. Nor do property values in Black neighborhoods reflect neighborhood social capital which Black residents have built up over time.
Devaluing Black assets deprives Black homeowners of wealth, making them more vulnerable to displacement. It also undermines neighborhood growth and leads decline and disinvestment as banks and investors go elsewhere, local businesses close, and new ones don’t open. Property values fall, and when they reach a certain threshold, outside investors scoop up devalued assets and develop them in a way that maximizes their own returns, driving up real estate prices. That forces established businesses and long-term residents out, ultimately destroying Black communities that took generations to build.
It’s an all-too-familiar cycle in cities throughout the U.S. For example, median home values in Black majority neighborhoods in the Houston area are $54,000 (27.6%) lower than comparable homes in white neighborhoods. Despite its booming housing market, with the net population is growing by 250 people every day, Houston is increasingly losing Black residents, including thousands who have been forced out of important historically Black neighborhoods.
Compared to white neighborhoods, median home values in Black neighborhoods New Orleans are depressed by nearly $46,000, or 20.8%. In the wake of Hurricane Katrina, higher- income-oriented redevelopment reshaped Black neighborhoods, proving so damaging to them it was likened to “ethnic cleansing.” A third of Black residents were displaced. Today, the population in key historically Black neighborhoods is only about half of what it was before Katrina.