Carl Hedman and Sophie House
November 2, 2021
In an earlier analysis of the housing landscape in small and midsize cities (here defined as cities with populations between 50,000 and 500,000), we found wide disparities in Black and white homeownership rates. In 2019, the Black-white homeownership gap was 8.1 percentage points higher in small and midsize cities than in large cities (28.2 percentage points compared to 20.1 percentage points).[1]
In this post, we take a closer look at one factor that contributed to widening racial disparities: declining homeownership rates for Black households. We examine cities where Black homeownership rates declined over the long-term (between 2000 and 2019), and divide these cities into two categories: those where the total number of Black homeowners declined along with the Black homeownership rate; and those where the rate of Black homeownership declined, but the overall number of Black homeowners increased. In each of these contexts, declining Black homeownership rates represent different challenges and trends and, ultimately, compel different policy responses.
Use the tool below to explore the dynamics of Black homeownership change in your community and in small and midsize cities across the country
Figure 1: Percentage point change in the Black homeownership rate in small and midsize cities, 2000-2019
Zoom and mouse-over cities to explore variations across the country.
Source: 2000 sf3 decennial Census and 2015-2019 5-year American Community Survey, NYU Furman Center.
Different demographic groups saw very different homeownership trajectories between 2000 and 2019. On average, across cities of all sizes, homeownership rates increased for Hispanic and Asian households, but declined among white and Black households (see Figure 2). Overall, the change in homeownership rates by race and ethnicity over the period were similar in large and small and midsize cities, with the exception of Hispanic households, who saw a larger (2.4 percentage point) increase in homeownership rates in large cities than in small and midsize cities (0.2 percentage point increase). The declines were more pronounced for Black households, driving increases in Black-white homeownership gaps. Black homeownership rates declined in a majority (73.4%) of small and midsize cities, and 28.5 percent of small and midsize cities saw a 10-percentage-point or higher decline in the Black homeownership rate over this time period.
Figure 2: Percentage Point Change in Homeownership Rates by Race and Ethnicity, 2000–2019
Small and Midsize Cities and Large Cities
Source: 2000 sf3 decennial Census and 2015-2019 5-year American Community Survey, NYU Furman Center.
However, the overall decline can obscure important variations in population, income and homeownership trends across cities. In some cities, the total number of Black homeowners might decrease as homeowners leave the city, transition to renting, or age out of homeownership (as elderly homeowners pass away or move into assisted living). In other cities, the number of Black renters in a city might grow faster than the number of new Black homeowners. Below, we take a closer look at each of these scenarios, exploring the housing market and population trends in both city categories. We then discuss potential strategies for addressing racial homeownership gaps in light of these different local dynamics.
Declining Black homeownership rates in cities losing Black residents
In 28 percent of small and midsize cities, including Tampa, FL, Tacoma, WA, and Lansing, MI, both the Black homeownership rate and the number of Black homeowners declined between 2000 and 2019. While average white (-2.6%) and Hispanic (-1.6%) homeownership rates also declined in these cities, the average loss was greatest for Black households (-7.3%). In general, this category represents slower-growing cities whose populations increased by less than half the average growth rate for small and midsize cities (21.3%), growing, on average, by only 9.1 percent between 2000 and 2019. Although the Black population of these cities was slightly higher than the small and midsize city average (17.3%, compared with 14.3%), this set of cities experienced a 5.6 percent decline in Black residents between 2000 and 2019. The weighted median Black household income in 2019 ($33,835) was nearly $10,000 lower in these cities than the small and midsize city average, and declined significantly over this period (-12.9%). These declines may be attributable to compositional shifts in the characteristics of Black households in these cities–as higher-income Black residents leave and lower-income households remain–as well as declines in the incomes of existing residents.
One city that exemplified these trends is Grand Rapids, Michigan, a midsize city with about 200,000 residents in 2019, of whom 17.9 percent were Black. The city’s declines in homeownership between 2000 and 2019 were not confined to Black households, as evidenced by the white and Asian homeownership rates, which fell by 2.7 percentage points and 12.7 percentage points, respectively. (The Hispanic homeownership rate remained flat.) However, the city experienced a significant decline in not only the Black homeownership rate (-8.9 percentage points) but also the number of Black homeowners (-1,317) over the period, losing 9.8 percent of Black residents even as its overall population increased slightly by 0.3%. The median income for Black households also declined dramatically (by 18 percent). Other small and midsize cities in Michigan experienced homeownership trends similar to Grand Rapids’: Flint, Kalamazoo, Battle Creek, Ann Arbor, and Pontiac all saw a net loss of Black homeowners and a decline in the Black homeownership rate between 2000 and 2019.
In general, cities in this category struggled to retain homeowners across racial groups, but the declines were greatest for Black households. The losses were not limited to housing—average Black household incomes and overall populations also declined significantly—suggesting that these trends were linked to broader economic factors that have limited employment opportunities for Black residents in these cities.
Figure 3: Percentage point change in the Black homeownership rate in small and midsize cities in Michigan, 2000-2019
Zoom and mouse-over cities to explore variations across the country.
Source: 2000 sf3 decennial Census and 2015-2019 5-year American Community Survey, NYU Furman Center.
Declining Black homeownership rates in cities gaining Black homeowners
In contrast, nearly half of small and midsize cities (46%) experienced a net increase in the number of Black homeowners, despite seeing declines in Black homeownership rates. Cities in this category include Cary, NC, Plano, TX, and Reno, NV. Generally, these were rapidly-growing cities that saw large growth in Black populations. They grew 32.8 percent on average between 2000 and 2019, with Black populations growing significantly (by 53.5%) over the same period. Despite the decline in the Black homeownership rate over the two-decade period, these cities had higher Black homeownership rates than the small and midsize city average in 2019. [2] They also have a more affordable stock of housing. The weighted median owner-occupied home value in these cities was lower ($279,073), and although they declined slightly during the study period, the weighted median Black household income was higher ($47,265) in 2019 than the small and midsize city average. A slightly higher proportion of these cities were suburban (45.0%) than the small and midsize city total (42.7%).
Together, these trends suggest these cities are growing and attracting Black residents, including higher-income Black households. A larger proportion of Black residents rent, rather than own, their housing in these cities, but the total number of Black homeowners has grown over time, and homeownership appears more accessible to a range of residents.
For example, in Mansfield, Texas—a suburban city of about 70,000 situated between Dallas and Fort Worth, with a population that is 18.5 percent Black—the Black homeownership rate declined by 16.9 percentage points between 2000 and 2019—nearly twice the national average. Mansfield, however, added 2,324 Black homeowners over the same period, and its Black homeownership rate (67.3%) is nearly double the 2019 national average, and over forty percentage points higher than in Dallas (26.3%). Median Black household incomes in the city are relatively high ($97,394 in 2019) and have increased by 6.6 percent over the last two decades.
In Mansfield, homeownership rates across racial and ethnic groups fell from 86.6 percent to 75.6 percent between 2000 and 2019. This change was driven largely by a boom in new construction of rental housing in the city (74.3% of homes constructed since 2000 were for rent). This is not, in itself, cause for concern: providing a range of housing types that include both rental and ownership opportunities across income levels can support economic vitality and racial equity. However, racial disparities in homeownership clearly persist despite net gains in the number of Black homeowners, and higher-income Black residents.
Mansfield’s experience is similar to that of many rapidly-growing small and midsize suburban cities in Texas. For example, Pflugerville (outside of Austin), Mesquite and Frisco (outside of Dallas), and Pearland and Missouri City (outside of Houston) each gained more than a thousand Black homeowners while experiencing double-digit decline in their Black homeownership rates. In cities like these, declining Black homeownership rates signal not economic decline but the need for policies that promote equitable growth, ensuring equal access to homeownership across racial and ethnic groups. The average Black-white homeownership gap is slightly higher among these cities (27.9 percentage points) than in cities that lost Black homeowners (26.9 percentage points), driven primarily by higher white homeownership rates.
Figure 4: Percentage point change in the Black homeownership rate in small and midsize cities in Texas, 2000-2019
Zoom and mouse-over cities to explore variations across the country.
Source: 2000 sf3 decennial Census and 2015-2019 5-year American Community Survey, NYU Furman Center.
Policy Implications
Understanding the differences between these two scenarios of declining Black homeownership rates can inform evidence-based policy responses to addressing barriers to Black homeownership growth and, ultimately, the broader racial wealth gap. For example, cities losing Black homeowners as part of a broader economic decline might consider policy responses that can help to keep families in their current homes.Foreclosure Prevention Programs became a leading initiative in the aftermath of the Great Recession. These programs assist homeowners who are at risk of losing their homes by providing some combination of counseling, legal services, property tax relief, and emergency financial assistance. In response to the COVID-19 pandemic, the City of Pittsburgh’s Urban Redevelopment Authority launched a Legal Assistance Program to help homeowners prevent foreclosure through access to legal services, funded by the city’s Housing Opportunity Fund (HOF). The HOF also funds the Housing Stabilization Program, which provides short-term mortgage assistance of up to $6,000 to prevent foreclosure. Cities can also leverage federal grants and local funds to provide homeowners with rehabilitation and home repair assistance. Well-designed programs have the potential to mitigate the displacement of low-income households, predominantly those of color, who cannot afford unexpected home repair costs.
Other initiatives pair financial assistance with policies that maintain housing affordability over time, such as deed-restricted homeownership initiatives or community land trusts. These programs may be particularly effective in communities that have experienced loss in Black homeownership and currently have lower housing costs and lower household incomes, but are concerned about future affordability challenges. HOME Rochester, a private-public partnership with the City of Rochester, rehabilitates vacant homes and sells them to low and moderate-income households at an affordable price; homebuyers agree to live in the homes for 15 years to ensure neighborhood stability. More than 775 homes have been rehabilitated through the program, and 51% of participating homebuyers were Black.
Fast-growing cities, by contrast, need housing policy strategies that support equitable growth. Programs that provide financial assistance with down payments and closing costs for eligible households can help to reduce one of the largest barriers to homeownership and thus to narrow the racial wealth gap and promote ownership among first-generation buyers. Education and counseling programs can also guide new homebuyers through the purchasing process. Tulsa, Oklahoma, for example, uses HUD funds to provide potential homeowners with an eight-hour educational program as well as one-to-one credit and budget counseling. Each of these measures can help to make homeownership accessible to a broader range of households in growing cities.
Conclusion
Our analysis suggests that Black homeownership rates are declining for different reasons and in different contexts. Some small and midsize cities are losing Black homeowners as their overall Black populations decline, and seeing sluggish growth compared to their peers. Many of these cities experienced a substantial decline in the median income for Black households, while housing costs remained steady over the period.
Other small and midsize cities are experiencing dramatic population growth and are gaining Black homeowners, albeit at a slower rate than Black renter households. In these cities, Black households’ incomes tend to be higher and housing costs lower. Nevertheless, Black-white gaps in homeownership persist, and the data suggest that these cities are not making progress towards eliminating racial disparities in access to homeownership. Notably, it appears that suburban cities are more likely to experience this kind of growth, while principal cities tend to be losing Black homeowners over time.
It is important to note that in about a quarter (23%) of small and midsize cities, the net number of Black homeowners and Black homeownership rate did increase between 2000 and 2019. These cities, which included Rochester, MN, Kissimmee, FL, and New Britain, CT, made progress in addressing racial homeownership gaps, but their average Black-white homeownership gap remained larger (28.9 percentage points) and the Black homeownership rate lower (36.2%) than the average for small and midsize cities in 2019.
Overall, better understanding of the dynamics that drive trends in homeownership rates and racial homeownership gaps locally can equip policymakers to develop solutions that match their communities’ needs and trajectories.
We thank Mariela Mannion for her excellent research assistance.
Footnotes
- In 2019 homeownership rates were highest for white households (64.2%) in small and midsize cities, followed by Asian (58.5%), Hispanic (44.7%), and Black (36.0%) households. We draw on the 2000 decennial census and 5-year American Community Survey (ACS) data from 2015-2019 (which we refer to as 2019 for ease of presentation) to compare indicators for U.S. cities in all 50 states and D.C. The analysis does not include cities in Puerto Rico or other U.S. Territories. Based on cities’ 2019 ACS populations, small and midsize cities are defined as places with 50,000 to 499,999 residents, and large cities as places with 500,00 or more residents. We exclude cities established after the 2000 Census and those that merged with their county jurisdiction (e.g., Louisville, KY) over the period. Our final sample includes 782 small and midsize cities.
- The analysis of homeownership rates by race and ethnicity is restricted to non-Hispanic white, Black, Asian, and Hispanic (any race) households to address estimation concerns related to limited sample size across small and midsize cities for other racial and ethnic groups.
2 Responses