>>> AS WE TRY AND RECOVER HOME
>>> AS WE TRY AND RECOVER HOME OWNERSHIP RATES FROM THE LAST
OWNERSHIP RATES FROM THE LAST RECESSION, LET’S TAKE A LOOK AT
RECESSION, LET’S TAKE A LOOK AT HOW RACE CAN SEVERELY RESTRICT
HOW RACE CAN SEVERELY RESTRICT THE UPWARD ECONOMIC MOBILITY OF
THE UPWARD ECONOMIC MOBILITY OF THE AFRICAN-AMERICANS.
THE AFRICAN-AMERICANS. SINCE AT LEAST THE 1940s, HOME
SINCE AT LEAST THE 1940s, HOME OWNERSHIP IS SEEN AS A
OWNERSHIP IS SEEN AS A CORNERSTONE OF THE AMERICAN
CORNERSTONE OF THE AMERICAN DREAM, A SENSE OF SECURITY AND
DREAM, A SENSE OF SECURITY AND BUILDS WEALTH IN THE FORM OF
BUILDS WEALTH IN THE FORM OF EQUITY IN YOUR HOME.
EQUITY IN YOUR HOME. NOW, THROUGH THE MID 20th
NOW, THROUGH THE MID 20th CENTURY, LOCAL GOVERNMENTS AND
CENTURY, LOCAL GOVERNMENTS AND FINANCIAL INSTITUTIONS USED A
FINANCIAL INSTITUTIONS USED A PRACTICE KNOWN AS RED LINING.
PRACTICE KNOWN AS RED LINING. THEY WOULD LITERALLY DRAW RED
THEY WOULD LITERALLY DRAW RED LINES AROUND BLACK NEIGHBORHOODS
LINES AROUND BLACK NEIGHBORHOODS LEADING TO FEWER MUNICIPAL
LEADING TO FEWER MUNICIPAL SERVICES, LOWER HOME VALUES IN
SERVICES, LOWER HOME VALUES IN THOSE AREAS.
THOSE AREAS. BUT THAT WAS SUPPOSED TO HAVE
BUT THAT WAS SUPPOSED TO HAVE ENDED.
ENDED. A STUDY OF THE BROOKINGS
A STUDY OF THE BROOKINGS INSTITUTION FOUND THAT
INSTITUTION FOUND THAT NEIGHBORHOODS THAT AT LEAST 50%
NEIGHBORHOODS THAT AT LEAST 50% BLACK HAVE AN AVERAGE, AN
BLACK HAVE AN AVERAGE, AN AVERAGE OF 23% LOWER HOME
AVERAGE OF 23% LOWER HOME VALUES.
VALUES. THIS IS SERIOUS.
THIS IS SERIOUS. THE DEVALUATION TO GIVE YOU A
THE DEVALUATION TO GIVE YOU A BIT ABOUT HOW THIS IS DONE,
BIT ABOUT HOW THIS IS DONE, MEASURED AGAINST COMPARABLE
MEASURED AGAINST COMPARABLE NEIGHBORHOODS LOOKING AT PRICE
NEIGHBORHOODS LOOKING AT PRICE DIFFERENCES IN NEIGHBORHOODS OF
DIFFERENCES IN NEIGHBORHOODS OF 50% BLACK POPULATIONS VERSUS
50% BLACK POPULATIONS VERSUS NEIGHBORHOODS THAT HAVE FEWER
NEIGHBORHOODS THAT HAVE FEWER THAN 1% BLACK RESIDENTS.
THAN 1% BLACK RESIDENTS. IT ALSO LOOKS AT STRUCTURAL
IT ALSO LOOKS AT STRUCTURAL CHARACTERISTICS, THE YEAR THE
CHARACTERISTICS, THE YEAR THE HOME WAS BUILT, NUMBER OF ROOMS.
HOME WAS BUILT, NUMBER OF ROOMS. AND IT LOOKS AT NEIGHBORHOOD
AND IT LOOKS AT NEIGHBORHOOD AMENITIES, THE PHYSICAL
AMENITIES, THE PHYSICAL LANDSCAPE, THE ECONOMIC STATUS,
LANDSCAPE, THE ECONOMIC STATUS, THE QUALITY OF EDUCATION, DID
THE QUALITY OF EDUCATION, DID TYPES OF STORES AVAILABLE.
TYPES OF STORES AVAILABLE. WHEN ALL OF THOSE ARE EQUALIZED,
WHEN ALL OF THOSE ARE EQUALIZED, WE’RE LOOKING AT -- COMPARING
WE’RE LOOKING AT -- COMPARING APPLES TO APPLES HERE, HOMES IN
APPLES TO APPLES HERE, HOMES IN BLACK NEIGHBORHOODS ARE
BLACK NEIGHBORHOODS ARE UNDERVALUED ON AVERAGE BY
UNDERVALUED ON AVERAGE BY $48,000.
$48,000. THAT IS A LOSS OF $156 BILLION
THAT IS A LOSS OF $156 BILLION IN HOME VALUE FOR MILLIONS OF
IN HOME VALUE FOR MILLIONS OF AMERICANS, MOSTLY
AMERICANS, MOSTLY AFRICAN-AMERICANS AND WHITE
AFRICAN-AMERICANS AND WHITE AMERICANS WHO LIVE IN MAJORITY
AMERICANS WHO LIVE IN MAJORITY BLACK NEIGHBORHOODS.
BLACK NEIGHBORHOODS. BROOKINGS LOOKED AT 113
BROOKINGS LOOKED AT 113 DIFFERENT AREAS THAT HAD AT
DIFFERENT AREAS THAT HAD AT LEAST 1 MAJORITY BLACK
LEAST 1 MAJORITY BLACK NEIGHBORHOOD AND COMPARED HOME
NEIGHBORHOOD AND COMPARED HOME VALUES TO HOME VALUES OUTSIDE OF
VALUES TO HOME VALUES OUTSIDE OF THE MAJORITY BLACK NEIGHBORHOOD.
THE MAJORITY BLACK NEIGHBORHOOD. ALL OF THE PURPLE, THESE ARE ALL
ALL OF THE PURPLE, THESE ARE ALL PURPLE, PURPLE AREAS ARE AREAS
PURPLE, PURPLE AREAS ARE AREAS OF DEVALUATION.
OF DEVALUATION. YOU CAN SEE THEM.
YOU CAN SEE THEM. ALL OVER THE EASTERN PART OF THE
ALL OVER THE EASTERN PART OF THE COUNTRY, WHERE MAJORITY BLACK
COUNTRY, WHERE MAJORITY BLACK NEIGHBORHOODS HAVE LOWER HOME
NEIGHBORHOODS HAVE LOWER HOME VALUES THAN OTHER NEIGHBORHOODS
VALUES THAN OTHER NEIGHBORHOODS THAT ARE OTHERWISE EQUAL.
THAT ARE OTHERWISE EQUAL. THE GREEN, YOU CAN HARDLY SEE
THE GREEN, YOU CAN HARDLY SEE THEM.
THEM. HERE, HERE, HERE.
HERE, HERE, HERE. THERE ARE A FEW AREAS OF
THERE ARE A FEW AREAS OF APPRECIATION WHERE MAJORITY
APPRECIATION WHERE MAJORITY BLACK NEIGHBORHOODS HAVE HIGHER
BLACK NEIGHBORHOODS HAVE HIGHER HOME VALUES THAN NON-MAJORITY
HOME VALUES THAN NON-MAJORITY BLACK NEIGHBORHOODS BUT THE
BLACK NEIGHBORHOODS BUT THE OVERWHELMING MAJORITY OF CASES
OVERWHELMING MAJORITY OF CASES OF WHICH BLACK NEIGHBORHOODS
OF WHICH BLACK NEIGHBORHOODS HAVE LOWER PROPERTY VALUES.
HAVE LOWER PROPERTY VALUES. IN FLORIDA SEBASTIAN-VERO BEACH
IN FLORIDA SEBASTIAN-VERO BEACH AREA, HIGHER VALUATION BUT FAR
AREA, HIGHER VALUATION BUT FAR MORE AREAS THAT HAVE
MORE AREAS THAT HAVE DEVALUATION.
DEVALUATION. PERHAPS THE STARKEST AREA IS
PERHAPS THE STARKEST AREA IS LYNCHBURG, VIRGINIA.
LYNCHBURG, VIRGINIA. NEIGHBORHOODS THERE HAVE HOME
NEIGHBORHOODS THERE HAVE HOME VALUES 81% LOWER THAN IN OTHER
VALUES 81% LOWER THAN IN OTHER AREAS.
AREAS. ABSOLUTE HOME VALUE ALMOST
ABSOLUTE HOME VALUE ALMOST TOTALLY WIPES OUT THE VALUE OF
TOTALLY WIPES OUT THE VALUE OF THE HIGHEST APPRECIATION IN THE
THE HIGHEST APPRECIATION IN THE STUDY WHICH IS THE
STUDY WHICH IS THE SEBASTIAN-VERO BEACH AREA.
SEBASTIAN-VERO BEACH AREA. JOINING ME IS THE LEAD AUTHOR ON
JOINING ME IS THE LEAD AUTHOR ON THAT STUDY, ANDRE PERRY OF THE
THAT STUDY, ANDRE PERRY OF THE BROOKINGS INSTITUTION.
BROOKINGS INSTITUTION. YOU HAVE PUT INTO A STUDY
YOU HAVE PUT INTO A STUDY SOMETHING THAT WE HAVE KNOWN OF
SOMETHING THAT WE HAVE KNOWN OF BUT IS SO INFLUENTIAL BECAUSE
BUT IS SO INFLUENTIAL BECAUSE IT’S NOT JUST ABOUT YOUR HOME
IT’S NOT JUST ABOUT YOUR HOME VALUE.
VALUE. IT IS GOING BACK DECADES TO THE
IT IS GOING BACK DECADES TO THE HOME VALUE THAT
HOME VALUE THAT AFRICAN-AMERICANS HAVE TRIED TO
AFRICAN-AMERICANS HAVE TRIED TO ACHIEVE SO THAT THEY CAN PASS ON
ACHIEVE SO THAT THEY CAN PASS ON TO OTHER GENERATIONS SO IT IS --
TO OTHER GENERATIONS SO IT IS -- IT IS HURT GENERATION AFTER
IT IS HURT GENERATION AFTER GENERATION THAT AFRICAN-AMERICAN
GENERATION THAT AFRICAN-AMERICAN NEIGHBORHOODS HAVE BEEN
NEIGHBORHOODS HAVE BEEN UNDERVALUED, IT MEANS THAT
UNDERVALUED, IT MEANS THAT AFRICAN-AMERICANS CAN PASS ON
AFRICAN-AMERICANS CAN PASS ON LESS TO THEIR KIDS.
LESS TO THEIR KIDS. >> ABSOLUTELY.
>> ABSOLUTELY. THE $156 BILLION THAT MY
THE $156 BILLION THAT MY COLLEAGUES JONATHAN ROCKWELL AT
COLLEAGUES JONATHAN ROCKWELL AT GALLUP AND DAVID HARSHBERGER IS
GALLUP AND DAVID HARSHBERGER IS REALLY THE AMOUNT OF MONEY THAT
REALLY THE AMOUNT OF MONEY THAT WE USE TO UPLIFT OUR SOCIAL
WE USE TO UPLIFT OUR SOCIAL STATUS SO IT’S THE MONEY THAT
STATUS SO IT’S THE MONEY THAT SHOULD GO TO STARTING A
SHOULD GO TO STARTING A BUSINESS, GOING TO COLLEGE,
BUSINESS, GOING TO COLLEGE, IMPROVING YOUR HOME OR EVEN
IMPROVING YOUR HOME OR EVEN MOVING TO A BETTER NEIGHBORHOOD.
MOVING TO A BETTER NEIGHBORHOOD. >> RIGHT.
>> RIGHT. >> THAT’S WHAT WE USE THE EQUITY
>> THAT’S WHAT WE USE THE EQUITY FOR.
FOR. BUT ESSENTIALLY, RACISM IS
BUT ESSENTIALLY, RACISM IS ROBBING PEOPLE, BLACK PEOPLE, OF
ROBBING PEOPLE, BLACK PEOPLE, OF THAT ABILITY TO UPLIFT
THAT ABILITY TO UPLIFT THEMSELVES.
THEMSELVES. >> PAIRED WITH YOUR REPORT IS
>> PAIRED WITH YOUR REPORT IS SOME INTERESTING NUMBERS FROM
SOME INTERESTING NUMBERS FROM THE NATIONAL BUREAU OF ECONOMIC
THE NATIONAL BUREAU OF ECONOMIC RESEARCH THAT 54% OF THE WEALTH
RESEARCH THAT 54% OF THE WEALTH OWNED BY BLACK FAMILIES IS IN
OWNED BY BLACK FAMILIES IS IN HOME OWNERSHIP SO IT’S A MASSIVE
HOME OWNERSHIP SO IT’S A MASSIVE SOURCE OF WHAT WEALTH THERE IS
SOURCE OF WHAT WEALTH THERE IS IN BLACK HOUSEHOLDS.
IN BLACK HOUSEHOLDS. SO THIS IS SO CRITICALLY
SO THIS IS SO CRITICALLY IMPORTANT BECAUSE IT’S NOT THAT
IMPORTANT BECAUSE IT’S NOT THAT HOME OWNERSHIP IS JUST ONE PIECE
HOME OWNERSHIP IS JUST ONE PIECE OF THE WEALTH OF
OF THE WEALTH OF AFRICAN-AMERICANS.
AFRICAN-AMERICANS. IT IS THE MAJORITY OF IT.
IT IS THE MAJORITY OF IT. >> YEAH.
>> YEAH. AND WE GOT TO REMEMBER THAT
AND WE GOT TO REMEMBER THAT BLACK FOLK BELIEVE IN THE
BLACK FOLK BELIEVE IN THE AMERICAN DREAM AND WE STRIVE FOR
AMERICAN DREAM AND WE STRIVE FOR THE AMERICAN DREAM.
THE AMERICAN DREAM. ALSO IN THE REPORT WE FOUND THAT
ALSO IN THE REPORT WE FOUND THAT BLACK COMMUNITIES, MAJORITY
BLACK COMMUNITIES, MAJORITY BLACK COMMUNITIES, HOLD ABOUT
BLACK COMMUNITIES, HOLD ABOUT $600 BILLION WORTH OF HOUSING
$600 BILLION WORTH OF HOUSING ASSETS.
ASSETS. THERE IS POWER AND STRENGTH IN
THERE IS POWER AND STRENGTH IN BLACK COMMUNITIES.
BLACK COMMUNITIES. WE ARE DOING WHAT WE ARE
WE ARE DOING WHAT WE ARE EXPECTED TO DO.
EXPECTED TO DO. BUT THE DEVALUATION IS TAKING
BUT THE DEVALUATION IS TAKING AWAY MORE OPPORTUNITIES TO
AWAY MORE OPPORTUNITIES TO ADVANCE OURSELVES.
ADVANCE OURSELVES. THE NARRATIVE HAS BEEN THAT
THE NARRATIVE HAS BEEN THAT BLACK FOLK ARE THE PROBLEM FOR
BLACK FOLK ARE THE PROBLEM FOR DECLINING NEIGHBORHOODS, THAT
DECLINING NEIGHBORHOODS, THAT BLACK WOMEN’S MARITAL STATUS,
BLACK WOMEN’S MARITAL STATUS, THAT BLACK BOYS WHO WON’T PULL
THAT BLACK BOYS WHO WON’T PULL UP THEIR PANTS ARE THE REASONS
UP THEIR PANTS ARE THE REASONS WHY BLACK COMMUNITIES ARE NOT
WHY BLACK COMMUNITIES ARE NOT MOVING UP.
MOVING UP. BUT OUR RESEARCH CLEARLY FINDS
BUT OUR RESEARCH CLEARLY FINDS THAT THE DEVALUATION, THE
THAT THE DEVALUATION, THE PERCEPTION OF A NEGATIVE VALUE
PERCEPTION OF A NEGATIVE VALUE IS ROBBING BLACK RESIDENTS THE
IS ROBBING BLACK RESIDENTS THE OPPORTUNITIES FOR GROWTH.
OPPORTUNITIES FOR GROWTH. >> IT IS A VICIOUS CYCLE.
>> IT IS A VICIOUS CYCLE. I SPENT A LOT OF MY TIME IN
I SPENT A LOT OF MY TIME IN PHILADELPHIA AND YOUR STUDY
PHILADELPHIA AND YOUR STUDY FOUND THAT PHILADELPHIA, CLOSE
FOUND THAT PHILADELPHIA, CLOSE TO THE AVERAGE OF HOME
TO THE AVERAGE OF HOME DEVALUATION HAD A LOWER NUMBER
DEVALUATION HAD A LOWER NUMBER OF LIBRARIES IN SOME OF THOSE
OF LIBRARIES IN SOME OF THOSE AREAS, GAME THIS OUT.
AREAS, GAME THIS OUT. IF THE VALUE OF THE HOME IS
IF THE VALUE OF THE HOME IS LOWER IT THEN CREATES A CIRCLE
LOWER IT THEN CREATES A CIRCLE OF INSTITUTIONS DON’T GET SLED
OF INSTITUTIONS DON’T GET SLED IN
IN -- GET SETTLED IN THERE.
-- GET SETTLED IN THERE. >> YOU DEVALUE A NEIGHBORHOOD,
>> YOU DEVALUE A NEIGHBORHOOD, THERE’S
THERE’S THERE’S DIVESTMENT.
THERE’S DIVESTMENT. SCHOOL QUALITY GOES DOWN BECAUSE
SCHOOL QUALITY GOES DOWN BECAUSE THERE’S NOT A LOT OF REVENUE IN
THERE’S NOT A LOT OF REVENUE IN THE NEIGHBORHOOD.
THE NEIGHBORHOOD. IT’S A VICIOUS CYCLE.
IT’S A VICIOUS CYCLE. AGAIN, IT’S NOT BLACK FOLKS’
AGAIN, IT’S NOT BLACK FOLKS’ FAULT.
FAULT. THESE ARE GREAT ASSETS.
THESE ARE GREAT ASSETS. THEY SHOULD BE WORTH MORE.
THEY SHOULD BE WORTH MORE. 23% MORE AND THAT MONEY SHOULD
23% MORE AND THAT MONEY SHOULD BE USED FOR THOSE COMMUNITY
BE USED FOR THOSE COMMUNITY BENEFITS.
BENEFITS. >> I WANT TO SHOW YOU MORE
>> I WANT TO SHOW YOU MORE RESEARCH FROM THE NATIONAL
RESEARCH FROM THE NATIONAL BUREAU OF ECONOMIC RESEARCH
BUREAU OF ECONOMIC RESEARCH HOLDING WEALTH
HOLDING WEALTH HOLDING WEALTH OF BLACK VERSUS
HOLDING WEALTH OF BLACK VERSUS WHITE AMERICANS AND AROUND THE
WHITE AMERICANS AND AROUND THE GREAT RECESSION WEALTH FALTERS
GREAT RECESSION WEALTH FALTERS IN BOTH CASES.
IN BOTH CASES. IT FALTERS BY A LOT MORE BECAUSE
IT FALTERS BY A LOT MORE BECAUSE WHITE AMERICANS HAD MORE WEALTH
WHITE AMERICANS HAD MORE WEALTH TO LOSE AND THEN IT COMES UP.
TO LOSE AND THEN IT COMES UP. WHEREAS BLACK WEALTH, AGAIN, IF
WHEREAS BLACK WEALTH, AGAIN, IF IT’S DEPENDENT ON PROPERTY, IT
IT’S DEPENDENT ON PROPERTY, IT DIDN’T DROP AS MUCH.
DIDN’T DROP AS MUCH. DIDN’T COME UP BY AS MUCH
DIDN’T COME UP BY AS MUCH EITHER.
EITHER. >> YEAH, YOU KNOW, THIS IS THE
>> YEAH, YOU KNOW, THIS IS THE PROBLEM.
PROBLEM. WEALTH GIVES YOU THE ABILITY TO
WEALTH GIVES YOU THE ABILITY TO WITHSTAND THE SHOCKS THAT
WITHSTAND THE SHOCKS THAT INEVITABLY WILL COME.
INEVITABLY WILL COME. YOU LOSE A JOB.
YOU LOSE A JOB. YOU GET SICK.
YOU GET SICK. YOUR SON OR DAUGHTER GETS
YOUR SON OR DAUGHTER GETS MARRIED.
MARRIED. YOU TYPICALLY LEVERAGE YOUR
YOU TYPICALLY LEVERAGE YOUR EQUITY TO FILL THOSE GAPS.
EQUITY TO FILL THOSE GAPS. THE INABILITY FOR BLACKS TO GAIN
THE INABILITY FOR BLACKS TO GAIN WEALTH HURTS OUR ABILITY TO DEAL
WEALTH HURTS OUR ABILITY TO DEAL WITH THE SHOCKS THAT WILL COME.
WITH THE SHOCKS THAT WILL COME. AND SO, WHAT I HAVE BEEN
AND SO, WHAT I HAVE BEEN ADVOCATING FOR IS FOR US TO
ADVOCATING FOR IS FOR US TO CLEARLY HAVE POLICIES THAT HELP
CLEARLY HAVE POLICIES THAT HELP US DEAL WITH THE RACISM THAT’S
US DEAL WITH THE RACISM THAT’S BAKED INTO REAL ESTATE AGENTS,
BAKED INTO REAL ESTATE AGENTS, APPRAISALS AND LENDING
APPRAISALS AND LENDING PRACTICES.
PRACTICES. BUT I’M ALSO SAYING TO THE BLACK
BUT I’M ALSO SAYING TO THE BLACK COMMUNITY, HEY, THIS REPORT THAT
COMMUNITY, HEY, THIS REPORT THAT YOU CAN GET AT BROOKINGS.EDU YOU
YOU CAN GET AT BROOKINGS.EDU YOU CAN SEE YOUR PRICE AND -- WHAT
CAN SEE YOUR PRICE AND -- WHAT YOUR HOME SHOULD BE WORTH AND
YOUR HOME SHOULD BE WORTH AND YOU CAN DEMAND VALUE BY
YOU CAN DEMAND VALUE BY ANIMATING THE ACTIVITY IN YOUR
ANIMATING THE ACTIVITY IN YOUR COMMUNITY.
COMMUNITY. SAY, HEY, WE ARE WORTH MORE.
SAY, HEY, WE ARE WORTH MORE. WE DESERVE MORE.
WE DESERVE MORE. WE CAN INVEST MORE IN OUR BLACK
