Black Neighborhoods have been suffering silently massive deterioration and it been happening for a while now. When Hurricane Harvey struck Texas about 15,000 properties were destroyed and the neighborhoods that suffered the most damage were a section of Southwest Houston. 49% of the residents in this neighborhood were nonwhite. That is not an isolated case, when Hurricane Katrina hit parts of Louisiana in 2005, the worst damage was more felt in the regions where we had most African Americans neighborhoods. According to government records, of the seven ZIP codes that were heavily devastated by Hurricane Katrina, four of them had populations that were at least 75% black. When natural disasters hit, they affect the minority communities harder and the pattern from the Hurricanes coincides with the massive wildfires happening on the west coast. Due to climate change and a long history of fire suppression, minority communities are taking huge blows every time these uneventful cases happen.
Researchers at the University of Washington and The Nature Conservancy developed what is called a “vulnerability Index” which assesses wildfire risk in communities across the country. The result, as published in the Journal PlOS ONE shows that racial and ethnic minorities face a grander vulnerability to wildfires compared to the primary white communities. To be more specific about these dire statistics, Native Americans are six times more likely than any other group to live in areas that are prone to wildfires.
With each blow from these natural disasters, minority neighborhoods continue to suffer and lose value.
In the year 1950, Cleveland had about 900,000 residents but in the year 2000, the number had declined to below 500,000, and back then the city showed relative strength including a large supply of stable, primarily black middle-class neighborhoods, the massive decline in populations. Today, Cleveland presents a completely different picture. Over the past two decades, most black neighborhoods have fallen into poverty.
To paint a picture of how serious the situation is, in 2005, there were about 307 families that bought homes in Cleveland’s 16 predominantly Black middle-class neighborhoods. In 2018 the number had fallen three-fourths. More than half of the 73 home purchases happening that year happened in just one neighborhood. There were no home purchases in five out of 16 neighborhoods! Not even ONE.
These neighborhoods were the former glory and haven for Black African Americans and the lack of homebuyers in these neighborhoods continuously creates a crisis of non-replacement. That is not all, when we have a massive outflow of people from these neighborhoods such that there are no significant purchases happening in a year, this creates and leads to a vicious cycle that leads to these neighborhoods declining even further. “The more poverty increases, the more the remaining middle-class homeowners are going to leave, and fewer middle-class buyers are going to be coming in,” says Alan Mallach, a senior fellow at the Center for Community Progress.
Surprisingly, Cleveland is not the only city experiencing these massive declines and non-activity in Black neighborhoods. Mallach has studied the fortunes of the Black middle-class neighborhoods in six large cities including Baltimore, Chicago, Detroit, Milwaukee and Philadelphia, and Cleveland, and what he found is utterly disturbing.
In his study, Mallac examines over 300 neighborhoods that in the years 2000 were receiving what we’d call a healthy median income. He found that most of these neighborhoods by 2018 had already fallen into poverty. In a handful of these neighborhoods, fortunes had increased considering the fact that gentrification was barely a factor. In most neighborhoods, the homeownership rate was significantly down, while the vacancy rate and poverty rates increased.
While it is a fact that there is a great deal of attention paid to the real struggles of the Black Americans less focus is being put on the health of the places or neighborhoods they live. What you need to understand is that neighborhoods are more than just a collection of homes and people. They represent both the fixed assets such as homes, businesses, schools and so much more including the less tangible assets such as civic and cultural engagement.
To that effect, the so-called middle-class neighborhoods – areas that are not very vibrant to attract private investment but also not extremely impoverished enough to receive direct government intervention are starting to get more and more attention today. The neighborhoods where people grow determine their trajectory throughout their entire lives. This has shown to be true, and research from a 2017 study shows that of the 7 million families found that neighborhoods where children grow up determined to a large extent their future earnings, college attendance rates, and fertility and marriage patterns.
“Black middle neighborhoods matter because 70 percent of Black people live in Black neighborhoods,” says Nedra Sims Fears, executive director of the Greater Chatham Initiative, a nonprofit that invests in several Black neighborhoods in Chicago’s South Side.
She goes ahead to note that in her neighborhoods most homes will sell for $200 per square foot less compared to the $300 per square foot in white neighborhoods. Why are we here?
Discrimination is still a thing in 2021 and it has been happening in real estate including in lending and appraising and this has been well documented. Nationally, Black neighborhoods have been undervalued by $156 billion according to data by the Brookings Institution. There are so many reasons why black neighborhoods are declining in value including the lack of response to natural disasters. Racism also plays a huge role in aiding the destruction of black neighborhoods. In his study, Mallach notes that structural racism has been a part of the American legacy.
Falling Back Further!
In his study, Mallach examined the cities where there were predominantly black neighborhoods and where the median incomes fell between 65 and 125 percent of the national median income. In all the six cities, the median household income declined in Black neighborhoods in double-digit percentage constantly between 2000 and 2018 and in some by as much as 41 percent like Cleveland and Detroit.
There were also predominantly white neighborhoods that also experienced these declines but also in such areas, Black neighborhoods declined more. Where white neighborhoods flourished, Black neighborhoods did not share the same prosperity. “While the severity of the decline varied from city to city, every city’s African American neighborhoods showed a decline in every indicator greater than the national rate of change over the same period,” Mallach notes.
To say the least, these neighborhoods have been buffeted by major macroeconomic trends since the 2000s. While major natural disaster has also played a role in this downward trajectory for the black neighborhoods, deindustrialization has also been a major factor, robbing the black neighborhoods of once-secure career paths. Statistically, black men continue to suffer the highest rates of unemployment of any racial gender grouping. “When those middle-class manufacturing jobs went, that broke the back of the Black middle neighborhood,” says Fears. “Now Black women are the mainstay. They’re paid 62 percent of what Black men make.”
Black Flight
Many black people have home preferences in different kinds of places. A majority of them are opting to leave the cities, opting for the suburbs. Between 1990 and 2010, the share of Black people within the metros living in the suburbs rose from 37 percent to 51 percent. In the past decade, suburbs have grown more diverse creating the ‘Black Flight.’
Today’s data show that more black people are moving to the south. During the first half of the 20th century, the Great Migration saw Black people moving to the North but now, the trend is reversing, with more African Americans being drawn to the South. Cities such as Dallas, Atlanta, and Charlotte are seeing massive increases in the Black population, while northern cities have been hemorrhaging.
This massive shift of people of Black people has left Black Neighborhoods in the North with fewer potential buyers. White people cannot even look at the predominantly black neighborhoods, let alone move into these places. On the other hand, Black people are more considerate and will move into not just black neighborhoods, but also mixed-race neighborhoods but more so the white neighborhoods. This means that even when there are increases in demand for housing from white people, Black neighborhoods do not see any tangible benefits, especially after the fact that white people make up the largest share of the market.
What does all this mean? Well, black homeowners cannot sell and when they do, they sell at a relatively low price. Most will settle for a lowball offer from an absentee investor. In most cases, in some neighborhoods, they cannot even find a buyer at all which means, most properties are sitting vacant after people move out, which drags down the value of properties in these neighborhoods.
What Can Be Done?
“Researchers on our team did an analysis of how African American-owned businesses fared in the pandemic,” says David Erickson, senior vice president of the Federal Reserve Bank of New York. “They found that in areas of concentration where there are many Black-owned businesses, there was more financial stress on those businesses, and they were less likely, on average, to receive benefits from the relief efforts.”
In many cities, the county and state governments are offering help to businesses seeking a Paycheck Protection Program (PPP) or other federal assistance over the past year. While the economy is strong, many policymakers are more concerned about how the middle-to-low income neighborhoods will fare once the foreclosure and eviction moratoria expire.
“When those turn off, what we’re probably going to see is significant foreclosure activity – probably in the same areas you’re defining as middle neighborhoods, where homeownership is weak,” says Denise Scott, executive vice president at the Local Initiatives Support Corporation.
For many years, the local and federal policymakers have been concerned about housing but never the entire spectrum that includes neighborhoods. But, that may start to change.
Introducing the Restoring Communities Left Behind Act which is currently in congress. The bill seeks to create a new competitive grant program that will support the community-based partnership addressing housing and community redevelopment. There is also a second bill that is known as the Neighborhood Homes Investment Act that seeks to create a tax credit to make developers whole where there is a gap between their costs and the value of the home. The ideas proposed in the two bills have been included in the broader proposal from the President and both have bipartisan support in Congress.
It is also worth noting that there are other numerous success stories happening all around the country. For instance in Baltimore, there is a nonprofit organization called ReBUILD Metro that has leveraged $100 million to rehab 500 homes. This has driven down the vacancy rates in two formerly blighted neighborhoods by an upward of 75%. In addition, DeSales Community Development Corp., a St. Louis nonprofit has helped to stabilize a neighborhood called Fox Park through investments in hundreds of low-income housing units. Today, it is a desirable market with so many people coming into the neighborhood to buy.
“No private developer in their right mind was going to go into that block,” says Thomas Pickel, DeSales’ executive director, referring to the group’s first rehab project. “If anybody was going to get that investment pipeline flowing again, we were going to have to do it and figure out how to do it.”
There is no single solution that will be fitting to all struggling neighborhoods, but the seemingly simple steps can make a lifetime difference making neighborhoods healthier for residents and more appealing to newcomers.
