Racial Segregation in Housing Markets and the Erosion of Black Wealth
Housing is the most important asset for the vast majority of American households and a key driver of racial disparities in wealth. In this talk, Randall Walsh, a professor of economics at the University of Pittsburgh, will discuss how residential segregation by race eroded black household wealth in U.S. cities. Using a novel sample of matched addresses from prewar American cities, Walsh and his research team found that rental prices and occupancy soared by about 40 percent in blocks that transitioned from all white to majority black. However, home values fell on average by 10 percent over the first decade of racial transition and by a staggering 50 percent in major African American destinations such as Chicago, Philadelphia and Detroit. These findings suggest that, because of the segregated housing market, black families faced dual barriers to wealth accumulation: they paid more in rent for similar housing while the homes they were able to purchase rapidly declined in value.