








. Crucially, 40 pen difference was the lack of home equity between white families. The latest numbers come from 1989. the median value of home equity for all famihe numbers of whom were white was $48,000. For b $37,000. Thus, while a white person can lean on I owning parents or relatives money needed for oi ments to buy a larger house the next time, to finar education, a vacation blacks do not enjoy this Some of this is the result of the historic legacy of s since blacks have been barred in past generations fi valuable homes, there is less money passed frot generations to the new. "Wealth begets wealth : wealth gets stuck,  said Galster.
One of the most important consequences of thes differences between blacks and whites, said Ga number of blacks who would have enough money standard 10 percent down payment on a home and mortgage on a home at today's standard, aboul National figures show that 42 percent of white rent<
158
35. Home Ownership Anchors the Middle Class
afford to purchase a typical starter home in a metro-itan area, while just 26 percent of blacks would be able to te that leap.
 What this means is that middle-class housing in Ameri-is bifurcated into two extremes,  explained Bromley.  If 11 are white, you can trade up into a place in Chevy Chase id.], while a black family is sitting in a home in Shepherd rk in Northwest Washington, D.C., or in Silver Spring, d., where demand isn t as great and the returns are low.  In 1989, Money magazine found that housing segrega-  tended to stifle the black middle class in its ability to iild wealth through the appreciation of home values. The agazine illustrated the deflation in prices in black middle-iss areas by comparing residential areas with the same come patterns. It found that price appreciation in middleass black areas lagged behind those in white areas. For stance, in Washington, D.C. s predominantly black rookland/Catholic University area, housing prices rose 8 trcentfrom 1985 to 1989. That was a 10 per cent drop in alue (adjusting for inflation), the magazine reported. By mparison, in North Highland, which was 98 percent toe, home prices increased nearly 100 percent. In Atlanta, prices in Ben Hill, about 97 percent black, appreciated 6 percent while those in North Highland, 93 percent white, limped by 67 percent.
There are other costs to blacks as well. As a rule, blacks imply have far less wcalih to give to their children. A 1984 census Bureau study found that blacks who earned between 524,000 and $48,000 that year had net worths one-third as urge as whites at the same income level. This means that whites will generally give their children a head start on blacks of the next generation. "That is generally the difference between going to the college of your choice and settling for a state or community college or no college at all,  said Bart Landry, a sociologist at the University of Maryland and author of The New Black Middle Class.
In general, scholars are finding that these patterns of dis-Nnty and limitation of economic opportunity can be laid at the oorstep of racial discrimination by the real estate, banking   insurance industries. By far the most damaging evidence of ^crimination by lenders is in how blacks and whites are mated when they try to obtain home mortgages. According to 1989 ^edera' Reserve Bank of Boston, published in
, even after accounting for differences in income and   wnite neighborhoods received 24 percent more loans ton f|aCk  neS' The study 'ooked at ^,000 mortgage applica-with d fr m m re than 300 lenders and found that people race credentials were rejected purely on the basis of Were $6 percent more likely to be rejected than *2  "l> credentials.
variou'6 W^'tes were generally encouraged to learn about thtoul m rt8age plans  blacks were often discouraged p|e ^^information and lack of clear advice, for exam-The d W t0 C ean up Poor credit records.
 ngind 1SCriminatory behavior was not limited to the lend-and Urb^ Mother study, by the Department of Housing racially rf11 development, found widespread evidence of in 19$$ ^criminatory practices in the real estate industry lion irist 6 report estimated that there were 2 mil-ances of housing discrimination annually against
and liabilities amount and type of wealth in
total net worth
543 164	 	$8)981
white	black
1988 (in 1990 dollars)
i^eres^arning 3t financia|
---------------------- 6.162
735
regular checking
stock and mutualjunds
. ..	2.884
97
equity in business
.	_________________ 3.846
351
equity in motor vehicle
_______________2.434
974
equity in home
18.236
equity in rental property
3.412
704
other real estate
_______________________________1.860
272
U.S. savings bonds
IRA or Keoghs
1.714 M
1,859
source: U.S. Census Bureau
African-Americans and other minorities. Housing was sys-tematically made more available to whites in 4S percent of all transactions in the rental market and in 34 percent of the sales market. Whites also received more favorable credit assistance in 46 percent of sales encounters and were offered more favorable terms in 17 percent of rental transactions.
In the sales market, the question of differential treatment boils down to behavior: how often a broker will call a buyer back; or if a buyer is called back, if the buyer be shown the preferred tree-lined streets and the cul-de-sacs.
 An agent will rely on code words, telling a white person,  you wouldn t feel comfortable here,  while a black person will be told,  there s nothing in your price range here,    said Bromley.  Frequently, steering behavior consists of showing a black potential homebuyer a house priced at $150,000 after they ve told the realtor to look for a house for no more than $125,000,  Bromley said.  It s about the persistent feeling of being unwelcomed. It s about racism with a smile. 
Often, the only time black home buyers get a chance to smile back is in the courtroom.
Under fair housing laws, any agent who has referred clients to banks or other lending institutions that discriminate automatically become liable themselves. It was this
159
6. AFRICAN AMERICANS
leverage that Donnell Cravens used successfully when he threatened to sue the realtor and the banks in his attempt to buy a home in Bloomfield, Mich.
There are alternatives to the litigation threat for blacks who are seeking to break down the barriers of segregation. One of the best is offered by the Fund For An Open Society. It helped build a national model for resolution of the problems of segregation in Shaker Heights, Ohio, by trying to help address racial balance in both black and white communities. That unique approach allows individuals trying to find homes a low-interest loan as an incentive to integrate racially-segregated areas. Often, whites will be approached with the loan incentive to integrate black neighborhoods that appear to be in danger of losing their attractiveness because the density of black households is too high. Or, alternatively, the fund will approach blacks with the chance to integrate nearly all-white areas. Similar programs have been formed around the country, based on this model.
In the past, the real estate industry has been stuck in their basic way of thinking about human beings as economic objects. While whites have been encouraged to buy housing for its investment value because they are seeing them as  future-oriented people,  blacks have been stigmatized by the industry which sees them as people who want to buy as much shelter as possible for the dollar, regardless of whether it is in an area that is losing its marketability to the majority population. One result is that blacks are forced to rely on mortgages from sources other than private lending institutions falling back on government agencies such as VA and the FHA loans, where closing costs are higher, and additional points are required.  The result is that blacks are pushed by realtors into areas where private mortgages aren t even offered,  Bromley said.  Breaking out of this pattern of inertia is difficult because there are so many higher costs. 
The difficulty is overcoming the inertia of past generations. DeMarco said his program seeks to remedy this condition by involving the banks, real estate interests and home buyers in the process of keeping areas marketable through  integrative efforts.  He explained,  You have to recognize that in this country, the majority simply has the money to determine supply and demand and unless minorities can link up with that system, they are in danger of losing out. 
Massey proposed ending the crisis of inequality in black housing patterns by attacking racial discrimination in private housing markets, which comprise 98 percent of all dwellings in America. Public policies, he said, must interrupt the institutionalized process of neighborhood racial turnover,  which is the ultimate mechanism by which the ghetto is reproduced and maintained.  That process depends on white prejudice and racial discrimination which restrict black access and channels black housing demand  to a few black or racially mixed areas.  The federal government must insert itself into the housing markets with HUD taking a greater role in enforcing Fair Housing Act directives, Massey said.
Whether the Clinton administration is willing to address the issue of housing segregation, meanwhile, is anybody s g^s There are strong indications that it may happen HUD Secretary Henry Cisneros has promised stepped-up 160
Percentage of black who live in segregated neighborhoods in selectei metropolitan areas.
Atlanta		_6liL7%I^B
Baltimore			 Him
Birmingham 		71.7% M
Boston			68;2%3H
Chicago	
! Cleveland 	1	
Dallas - Fort Worth 		
rDetroit  		 .			
Houston		0O%JB|
Kansas City	72.6%  
Los Angeles - Long Beach		 73.1% |
Memphis		
Miami		71.8%~M
New Orleans	68.8% HI
New York
82
77.2%
Philadelphia
St. Louis
77.0%
San Francisco - Oakland
Washington D.C.
source: Population Association c
enforcement activities and the U.S. Justice appears to be increasing its monitoring of dis practices in the real estate and banking industri
But this isn t enough. One source of d whether housing segregation will end any time from the black community itself, which appears faith in the benefits of integrated housing, di spread evidence that it is a powerful vehicle foi economic mainstream. There appears to be a 1 talgia that has settled in in many quarters of t community that support the idea that segregai may not be such a bad thing. Even among Aft cans, who are most hurt financially by segreg appears to be little agreement on how to invest gle against housing segregation with passion; ment.
Recently, Massey was asked to discuss his black Chicago radio station. He spoke of tf blacks have with access to capital, about the industry which blocks blacks from finding out 1 cise their options for a wider range of economi housing choices.  I was saying it was all ah access to greater opportunities, which basically ing the mainstream, which means  Are you willi with white people to get what you want 
