To enhance local affordability. To foster inclusive communities.

4.3 Addressing Disparities

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The Importance of Addressing Racial Disparities in Developing a Local Housing Strategy

In assessing housing challenges and developing solutions, it is important for localities to address disparities in housing opportunity by race and ethnicity. These include, among others, racial segregation, racial and ethnic disparities in access to quality schools and open space, disparate exposure to crime and environmental contaminants, and disparities in families’ ability to afford to rent or qualify to purchase a home. In many cases, intentional federal, state, and local policy played a major role in creating and perpetuating these racial and ethnic disparities. Reducing them will therefore require similar explicit and affirmative efforts. It is also crucial to focus broadly on disparities between multiple populations. While much of the academic literature and historic segregation focuses on Black/white or Latino/white disparities, Native American and Asian populations also experience poor housing outcomes, and often represent sizable populations within local jurisdictions.

Effectively addressing racial and ethnic disparities in housing and related opportunities requires robust community engagement with individuals and groups who have experienced harm. Review Section 2.2 of this course for guidance on how to conduct community engagement that elevates marginalized voices and helps achieve buy-in for your local housing strategy.

How We Got Here

The causes of segregation and racial disparities in housing are multifaceted, but government policies at the federal, state, and local level have contributed. During the Great Migration (1916 – 1970), both private practices and public policies severely constrained the housing options of Black families, steering them into a few clearly defined Black neighborhoods. Courts enforced racially restrictive covenants – which bound property owners in white neighborhoods not to sell or rent to a non-white household – and these covenants spread rapidly as a strategy to keep Black people out of white neighborhoods. In 1948, the Supreme Court declared racial covenants legally unenforceable. However, established racial demarcations continued to hold power long after the decision.

The federal government was complicit in this process, reinforcing segregation through maps that the Home Owners Loan Corporation created in the 1930s, and which arrayed neighborhoods by risk determined by housing age and density as well as racial composition through a practice known as “redlining.” Neighborhoods with significant Black populations were literally highlighted in red and deemed less credit-worthy or ineligible for a long-term, fixed-rate mortgage. The Federal Housing Administration continued to use neighborhood racial composition in drafting its underwriting guidelines until 1949, when President Truman directed it to stop pursuing racially discriminatory policies.

Consequences of Segregation

Segregation in U.S. cities has often resulted in large disparities in the resources and services available in the neighborhoods in which different groups live. Researchers consistently find that children from low-income families who are given the chance to grow up in lower-poverty neighborhoods are more likely to go to college and enjoy significantly higher earnings as an adult. There is also strong evidence that racial segregation widens racial disparities in individual outcomes because it tends to create a world in which children of different races grow up in neighborhoods with unequal resources. Segregation widens white-Black and white-Latinx disparities in educational attainment, employment, income, and even birth weight.

Some research also suggests that racial and economic segregation slow overall economic growth by cutting off opportunities for interaction and reducing economic mobility. In other words, segregation may harm entire regions on top of those directly affected. Addressing racial and economic segregation and the disparities they have created will not only help to make localities more inclusive, but it may also help fuel their growth. Moreover, the Fair Housing Act requires local governments to affirmatively further the Act’s goals of promoting fair housing and equal opportunity. To learn more about the Fair Housing Act, read this brief, Enforcement of Fair Housing Laws.

Disparate access to homeownership, particularly in neighborhoods likely to experience home price appreciation, has contributed to disparities in wealth accumulation that severely restrict the ability of many Black and Latinx households to become homeowners or to purchase homes in neighborhoods with quality schools and other amenities associated with future economic success. This perpetuates a cycle of disadvantage.

How to Mitigate Neighborhood Disparities

Localities can adopt local housing policies, combined with other non-housing policies, to help mitigate neighborhood disparities and ensure that as many people as possible can live in neighborhoods that deliver a rich set of opportunities for advancement:

  1. Track disparities in conditions. Localities can examine the residential patterns in their region to understand disparities in access to resources and track how they change over time. Our Housing Needs Assessment Tool includes a number of measures broken down by race and ethnicity to help policymakers understand current disparities and trends over time.
  2. Invest in neighborhoods to ensure that they provide sound services and deliver a rich set of opportunities for residents. Local officials may want to explore new strategies to invest in building opportunities in all communities for all residents.
  3. Invest in efforts to maintain diversity in the face of gentrification. To prevent the displacement of long-time residents, local officials can adopt policies that help to preserve the availability of lower-cost housing over the long term, even as nearby property values increase. Localities can also establish new eviction policies and provide legal assistance and other support to residents at risk of losing their homes.
  4. Support efforts to help families reach resource-rich neighborhoods. In addition to investing in community development, local governments should also consider taking steps to increase opportunities for families of diverse economic and racial backgrounds to access resource-rich neighborhoods.
  5. Expand homeownership opportunities for low- and moderate-income households. Local jurisdictions may want to provide assistance that helps low- and moderate-income households become homeowners and enables existing owners to stay in their own homes. Differing homeownership rates are one of the key drivers of racial disparities in wealth, so localities may want to devote special attention to bridging racial gaps in homeownership.

For more information on the importance of considering and addressing disparities, read this brief, Addressing Segregation by Race, Income, and Ethnicity.

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