So where does this huge difference come from? As one might expect, the dramatic split in net worth of black and white families in the United States is largely based on the differences in how valuable a family's home is estimated to be (assuming a family owns their home).
The benefits of owning a home—and more so a valuable one—are many. First of all, by owning a home, a family pays less in income tax (see this guide to the benefits of home ownership from Forbes magazine). Secondly, since owner-occupied communities tend to have higher real estate value than renter communities, the property tax base is likely higher, which means local services are going to be better. This can include something as simple as free and regular garbage services and more frequent street cleaning. It can also mean superior public education, since funding for public schools remains strongly tied to the income generated from property taxes (Chetty and Friedman, 2011).
Thirdly, once a family has built equity by paying back their mortgage, they can borrow off this equity to finance other projects or pay their children's college tuition. This financial support makes it less likely that these children will have to take out and carry huge student debt, thus freeing them from common pitfalls: "Debt costs you time in savings, pushes back when and whether you can buy a home, start a family, open a small business or access capital," says Lauren Asher, the president of TICAS (from a recent article in Forbes Magazine). As a result, children of homeowners are in a strategic position to have their education paid for (even if only in part), to more easily save money, to more quickly buy their own home, and to be more likely to raise their family near good schools. This puts them in a prime position to start the cycle over again and further the divide.
Just as housing discrimination continues to exist at significant rates within the real estate market, it should be no surprise that people of color are also often denied access to homes and apartments within the rental market.
To this point, the radio show and podcast This American Life devoted an entire episode—entitled House Rules—to discussing the impact and importance of where a person lives. Working closely with ProPublica reporter Nikole Hannah-Jones to illuminate the history of race-based housing discrimination in the United States, the episode's first segment details the work of an organization in NYC called the Fair Housing Justice Center.
Through in-depth research on contemporary segregation in the United States, Hannah-Jones found that "housing discrimination based on race is a lot less pervasive than it used to be ...[but] it still happens," and at higher rates than expected since bias practices have become more covert and harder to pick up on. In order to build a case against a potentially discriminatory landlord, the Fair Housing Justice Center hired testers to visit particular buildings and pretend to seek an apartment, while their conversations were recorded and compared. Since testers did not know which buildings were suspected of discrimination and which were simply part of the control group, the findings of some of the tests were quite surprising:
"It wasn't that she couldn't believe someone might have discriminated against her in enlightened New York City, but she thought of herself as very good at reading people, how they were responding to her, and she had detected nothing."
In this particular case, the person accused of bias had been very nice and the conversation was normal, with no overt red flags, making the findings all the more disturbing for this tester:
"I was surprised, and I was like, but he was so nice to me. He was cordial. He wasn't throwing me a party, but he was cordial, and he wasn't rushing me out ... When he told me nothing was available, I took him by face value. ... It's jarring. It's very jarring. ... It's hard for my brain to realize that there was nothing that I could do. And for a while I had a feeling of like, well, does that mean I'm misjudging other people in my life? You know, are there other people who don't want to be near me because I'm black? What does that mean? Am I just completely misjudging the people around me?"
Without instilling too much paranoia, this is deeply upsetting and it is hard to believe that today in New York City—a city purported to be so progressive—there is a fair chance that a person of color might be discriminated against and have no idea that he or she has been treated differently or denied access to opportunities.
Racism Without Racists & community isolation
To complicate matters further, many people who discriminate in subtle ways have no idea that they are even doing it. In his 2003 book, Racism Without Racists, Eduardo Bonilla-Silva writes about this very phenomenon: namely that the absence of overt racism has pushed people to deny and overlook their own small, everyday discriminatory decisions. With all that has been discussed in the media lately (e.g. Ferguson, Staten Island, and Cleveland), CNN recently published a piece about the way that many white people subconsciously perceive and interpret the behavior and culture of others—particularly those of racial minorities—to be fear-inducing or negative. Sadly, as we've all now learned so vividly, a person's fear-of-the-unknown can have lethal affects when it is a driving force in a confrontation.
A significant portion of this fear can be attributed to a simple lack of exposure and familiarity with people of racial groups other than one's own. This can be attributed, at least in part, to the continued lack of integrated communities in this country. From the same This American Life episode, producer Nancy Updike describes that:
"Black and white Americans still live substantially apart in this country. ... In hundreds of metropolitan areas, the average white person lives in a neighborhood that's 75% white, and their neighbors who aren't white are not likely to be African American."
Not surprisingly, this continued separation of communities along race lines can easily be traced back to discriminatory structural decisions—including redlining—that offered important opportunities only to particular communities. It is a full circle of influence, one that has been tragically under addressed in the media and among communities that can be conveniently unaware (see white privilege) (and this) (and this).
Additional Reading, Resources and Organizations