Black homeownership’s catch-22:
Low property values limit wealth in communities of color, but raising them risks gentrification
A growing push to help Black households build generational wealth starts with home equity, which is infamously lower in communities of color. But the undervaluation of these homes also makes them more affordable for Black families, most of whom are renters.
The average home in majority-Black neighborhoods is worth $46,000 less than a comparable one in majority-white neighborhoods, controlling for such factors as local amenities and schools, according to a Redfin analysis of more than 7 million homes listed and sold from 2013 to this February. A 2018 Brookings Institution study found the discrepancy added up to $156 billion in lost value for Black homeowners.
While some suggest that cities invest heavily in Black neighborhoods to drive home values up, there are two sides to that coin.
“In the short term, devaluation might seem to make homeownership more accessible and affordable,” said Danielle Samalin, CEO of Framework Homeownership, a social enterprise that educates new homebuyers. “But the long-term benefits of home price appreciation and increase in equity don’t come with it.”
Read more on home values in Black neighborhoods in The Real Deal.