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The Downhill Spiral

The Housing Market

Owning a home is one of the central goals of achieving the American dream.  It symbolizes wealth and stability.  However, home ownership can be one of the hardest goals to achieve, even harder if you are a minority.  Sunwoong Kim, an economics professor at the University of Wisconsin-Milwaukee notes in his "Race and Home Price Appreciation in Urban Neighborhoods: Evidence from Milwaukee, WI" article that, "Homeownership rates of black and Hispanic households have been more than 20 percentage points below that of white households for more than 20 years." [7]  What is the cause of such a prolonged, substantial gap?

As previously mentioned whites make up 80% of the housing market.  One reason that whites dominate the housing market is because they're welcomed better by real estate agents.  Kim explains that "Black buyers get fewer showings for potential homes; they are steered to the "less desirable" neighborhoods; and they are less courteously greeted than white customers" (11). [7] In fact, "Blacks and Latinos are 60% more likely than similarly qualified whites to be turned down for loans." [6] This discrimination alone lessens the opportunities for minorities; however, other factors come into play.  It has also been proven that minorities who do own homes are less likely to appreciate at the same rate as whites.  Exhibit 1 to the right shows house appreciation values between 1971 and 1973.  From Exhibit 1 we can see that appreciation values vary by neighborhood.  Exhibit 2 shows the concentration of the minority population.  This proves that the location of minorities does  affect the house appreciation values. This also affirms Kenny's comment about the "Gold Coast".  This is the section on the map in Exhibit 1 that has the highest appreciation value, and has a minority population of less than 5%.  The "Gold Coast" is also the richest neighborhood in Milwaukee. The section with the lowest appreciation values also coincides with the concentrations of blacks (21). [7] So this confirms that home appreciation values are related to the minority population.  Since it is more difficult for minorities to own a home, this creates segregation. 

 

So is it solely the white population's racial prejudices that have created such segregation in Milwaukee?  Well looking back at Government policies created in the Great Depression era, one might conclude that racism isn't the only contributor to segregation.

The Less Desirables 
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