The $57 billion cost of racial and ethnic inequity in Philadelphia's housing market

[FakeNoose]

Homes in Philly's Black and Latino neighborhoods haven't appreciated at the same rate as homes in white neighborhoods due to factors such as structural racism, according to a first-of-its kind report.



Philly Inquirer link: https://www.inquirer.com/real-estate/housing/racial-inequity-philadelphia-housing-market-real-estate-20231222.html

Philadelphia homeowners in Black and Latino neighborhoods collectively would have $57 billion more in property wealth if their homes appreciated at the same rate as homes in majority-white neighborhoods, according to an analysis of seven decades of property value data published by the nonprofit Economy League of Greater Philadelphia.

Home ownership is how most families in the United States build wealth, especially wealth that is passed down through generations. And a large share of Philadelphians are homeowners. But from 1950 to 2022, property values in neighborhoods where most residents were white grew a lot faster than property values in neighborhoods where most residents were not.

“To say that race hasn’t had a massive impact on housing prices is just to ignore reality,” said Jeff Hornstein, executive director of the Economy League of Greater Philadelphia and coauthor of the report released this month.

If homes in majority-Black neighborhoods appreciated at the same rate as homes in majority-white ones, adjusting for inflation, homeowners in Black neighborhoods would have a total of $24 billion more in housing wealth, according to the analysis, which the Economy League said is the first of its kind in Philadelphia.

- more at link -

Link to Economy League report: https://www.economyleague.org/kypp

The problem of lower property values isn't unique to Philadelphia, it happens in every city that has multi-racial residents and homeowners. Therefore it's happening just about everywhere.

My comment is that the value of any home is based on several factors: the age and condition of the house, the age and condition of the neighborhood, the desirability of the school district, availability of municipal services, proximity to jobs/shopping/entertainment, etc. The selling price (thus the value) of any house is relative to what the potential buyers are willing to pay for it.

Is racism a part of that equation? Well yes it probably is, but racism isn't the ONLY reason that some properties are more desirable than others, and therefore sell for higher prices. It stands to reason that a buyer's willingness to take a risk on one property over another is based on all the economic factors. It's also based on each buyer's ability to initially qualify for a mortgage, make the home purchase, and keep up the steady payments to satisfy the bank's requirements.

I would suggest that a similar percentage of white-owned homes have LOST VALUE in the same timeframe since 1950. However those homes are likely to be rural or ex-urban, and weren't factored into this study.

[MichMan]

1. There is only one individual that determines home appreciation and values; the buyer