Residential property owned by black Americans has been greatly undervalued, a newly released joint Brookings Institution and Gallup study suggests. Homes in majority-black neighborhoods consistently sell or are appraised for lower prices, by an average of $48,000 per home, researchers found. That amounts to $156 billion in cumulative losses nationwide.
Homes of similar value with similar features are valued at 23 percent less in majority-black neighborhoods compared to those with very few or no black residents, the study found. Researchers note that some of the neighborhoods in the study showed higher crime rates, longer commute times, and less access to high-scoring schools, which explains some of the undervalued estimates. But researchers say these factors only explain about half of the undervaluations in the study.
“We believe anti-black bias is the reason this undervaluation happens, and we hope to better understand the precise beliefs and behaviors that drive this process in future research,” researchers note in the report.
About 10 percent of neighborhoods in U.S. metro areas are majority black, and home to 37 percent of the U.S. black population, according to the study.
