WaPo: "How the Housing Crisis Left Us More Racially Segregated"
May 09, 2015, 10:13 AM
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From the Washington Post:

How the housing crisis left us more racially segregated

By Emily Badger May 8 at 8:15 AM

According to new research, migration patterns set in motion by the foreclosure crisis slowed declines in segregation across metropolitan America between blacks and whites by 19 percent, and between whites and Hispanics by 50 percent. It’s well-documented that minorities were hit particularly hard by foreclosures. But this work, published in the American Sociological Review, suggests that those racial disparities were compounded by what happened next: Minorities who lost their homes moved to more distressed neighborhoods, while white homeowners who could leave appear to have been the first to pull out of places hit by foreclosure.

Over time, these parallel trends made many neighborhoods more segregated than they likely would have been if the housing crisis had never happened. The most troubled neighborhoods in particular grew less white and more heavily minority. And these changes in individual neighborhoods added up so that segregation increased during this time across whole metropolitan areas.

“My general worry is that the progress we’ve been making toward racial integration has been partly derailed,” says Cornell’s Matthew Hall, who conducted the research with Kyle Crowder at the University of Washington and Amy Spring at Georgia State.

Racial segregation between blacks and whites in the U.S. has been declining for decades, but very gradually, and in some places less so than others. The recent uptick in segregation that Hall, Crowder and Spring measured is small but still significant. It was also particularly large in Western cities heavily hit by the housing bubble like Las Vegas and Sacramento.

Alternatively, you could say that the Housing Bubble that preceded the Housing Bust artificially increased integration by giving more mortgages to minorities, as President Bush had insisted at his 10/15/2002 White House Conference on Increasing Minority Homeownership. There, Bush demanded 5.5 million additional minority homeowners by 2010, and he told his federal regulators (as well as financial and real estate industry leaders) that the way to get to this higher level of racial equality was to stop being so persnickety about traditional credit standards, such as down payments and documentation.

Unfortunately, it turned out that the old-fashioned ideas about credit risks were more realistic about who could afford to pay back mortgages than Bush’s notion that outdated redlining prejudices were the cause of the racial Housing Gap.

… The study also uncovered another particularly alarming finding: Foreclosure rates during the housing bust were highest in the most integrated neighborhoods. So not only were we becoming more segregated — but the least segregated places were heavily undermined by foreclosure at the same time. The authors aren’t entirely sure why this would be, but the finding speaks to the relative fragility of rare, integrated communities.
My 2008 short story Unreal Estate depicts the rise and fall of the kind of integrated exurban neighborhoods in the Sand States that the Bush Bubble helped create:
“Look at this neighborhood,” Travis says, his dismissive gesture taking in the empty malt liquor bottles on the curb, the wheelless car jacked up on a brown front lawn, and the knots of sullen youths playing hip-hop and reggaeton on boomboxes. “All these speculators buy houses, hit a little bump in the road, need some cash, then start renting them out to lowlifes to get by until they can cash in. Property values drop like a rock. It would be no problem if just one investor did that, but when all these speculator jerks do it, the whole ‘hood is hosed.”