SEATTLE, April 25, 2018 /PRNewswire/ -- The effects
of redlining are still visible in today's housing market, 50 years
after the practice was outlawed.
Homes in areas that were "redlined" – or deemed "hazardous" for
mortgage lending by the federal Home Owners' Loan Corp. – remain
undervalued when compared with other nearby homes, according to a
new Zillow® analysis of Mapping Inequality.
The median value of a home in redlined areas is $276,199, nearly $50,000 less than the $324,489 median value of homes in the surrounding
areas. The gap demonstrates how the practice – outlawed in 1968 –
has had a lasting impact on neighborhoods and the ability of the
people who live there.
The practice of redlining emerged as the U.S. recovered from the
Great Depression. Areas around the country were labeled to assess
credit risks for mortgage lenders. The worst designation was
"hazardous," which frequently coincided with the racial makeup of
the area's residents. These areas were literally colored in red on
maps, hence the term "redlining." People living in these places –
overwhelmingly people of color – were essentially locked out
of the mortgage lending market, and therefore unable to buy a
home.
Homeownership is often regarded as a significant factor in
building wealth. By denying people in whole neighborhoods equal
access to homeownership, the practice of redlining put residents of
those areas at a distinct economic disadvantage that can still be
seen today.
Through most of the housing recovery from the Great Recession a
decade ago, homes in redlined areas made incremental gains on the
rest of the housing stock, gaining 69.1 percent in value compared
with 53.5 percent for homes in non-redlined areas since
March 2012. Yet the gap still
persists – homes in redlined areas are now worth 85 percent of the
value of the surrounding homes.
"The lasting impact of redlining is a striking example of how
the kind of discrimination – financial and racial – codified nearly
a century ago continues to affect homeowners and whole communities
today," said Zillow Chief Economist Dr. Svenja Gudell. "Redlining and other forms of
systemic discrimination, from Jim
Crow laws to racial covenants, contributed to a serious
divide in homeownership rates between whites and other groups that
has had devastating consequences for both the financial wealth and
social health of non-white Americans. With the renewed popularity
of inner cities in particular in recent years, some formerly
redlined areas are experiencing a renaissance of sorts, but even in
these areas "success" is relative. Gentrification and eminent
domain, for example, have both re-shaped cities and often displaced
long-time residents, many of them people of color. Progress toward
closing these gaps and righting history's wrongs has been slow, and
clearly there's a lot of work left to be done."
In Atlanta and Tampa, homes in redlined areas are still worth
less than half the value of the rest of the homes in the area.
Homes in areas once marked as "hazardous" are worth $193,866 in Atlanta, compared with $428,813 for the rest of the region. In
Tampa, those values are
$219,991 and $482,141, respectively.
There are some places where homes in formerly redlined areas are
now more valuable than the rest of the homes in that area. In
Boston, for example, the typical
home value in a historically redlined area is $847,992, about $95,000 higher than nearby homes.
Region
Name
|
Median Value
in Non-Redlined Areas, December 2017
|
Median Value
in Redlined Areas, December 2017
|
United
States
|
$ 324,489
|
$ 276,199
|
Atlanta,
GA
|
$ 428,813
|
$ 193,866
|
Baltimore,
MD
|
$ 175,040
|
$ 97,933
|
Boston, MA
|
$ 752,778
|
$ 847,992
|
Charlotte,
NC
|
$ 460,229
|
$ 334,733
|
Chicago,
IL
|
$ 543,015
|
$ 322,562
|
Cleveland,
OH
|
$ 112,137
|
$ 95,535
|
Columbus,
OH
|
$ 129,941
|
$ 119,793
|
Dallas, TX
|
$ 536,894
|
$ 271,216
|
Denver, CO
|
$ 509,545
|
$ 542,709
|
Detroit,
MI
|
$ 115,669
|
$ 62,824
|
Greater Kansas City,
MO
|
$ 150,936
|
$ 104,305
|
Indianapolis,
IN
|
$ 173,487
|
$ 101,674
|
Los Angeles,
CA
|
$
1,290,038
|
$ 738,070
|
Manhattan,
NY
|
$
1,860,758
|
$
1,778,488
|
Miami, FL
|
$ 499,410
|
$ 256,468
|
Minneapolis,
MN
|
$ 193,924
|
$ 208,075
|
Philadelphia,
PA
|
$ 332,448
|
$ 285,539
|
Pittsburgh,
PA
|
$ 161,642
|
$ 109,600
|
Portland,
OR
|
$ 534,493
|
$ 560,103
|
Sacramento,
CA
|
$ 407,174
|
$ 342,014
|
San Diego,
CA
|
$ 923,973
|
$ 555,993
|
San Francisco,
CA
|
$
1,707,559
|
$
1,293,197
|
San Jose,
CA
|
$
1,054,661
|
$ 752,765
|
Seattle,
WA
|
$ 852,686
|
$ 826,283
|
St. Louis,
MO
|
$ 153,729
|
$ 148,877
|
Tampa, FL
|
$ 482,141
|
$ 219,991
|
Zillow
Zillow is the leading real estate and rental marketplace
dedicated to empowering consumers with data, inspiration and
knowledge around the place they call home, and connecting them with
the best local professionals who can help. In addition, Zillow
operates an industry-leading economics and analytics bureau led by
Zillow's Chief Economist Dr. Svenja
Gudell. Dr. Gudell and her team of economists and data
analysts produce extensive housing data and research covering more
than 450 markets at Zillow Real Estate Research. Zillow also
sponsors the quarterly Zillow Home Price Expectations Survey, which
asks more than 100 leading economists, real estate experts and
investment and market strategists to predict the path of the Zillow
Home Value Index over the next five years. Launched in 2006, Zillow
is owned and operated by Zillow Group, Inc. (NASDAQ:Z and ZG), and
headquartered in Seattle.
Zillow is a registered trademark of Zillow, Inc.
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SOURCE Zillow