KHALILAH HARRIS: I'm Khalilah Harris for The Real News Network.
Today we're going to be discussing a new report from the Brookings Institution on the devaluation
of assets in the Black community.
We're joined today by Dr. Andre Perry, who's the David Rubenstein fellow at the Brookings
Institution.
Welcome, Andre.
ANDRE PERRY: Hi, how are you?
KHALILAH HARRIS: I'm well.
We're also joined by Associate Professor at Morgan State University, Dr. Lawrence Brown.
Welcome, Lawrence.
LAWRENCE BROWN: Hey, how are you?
KHALILAH HARRIS: I'm well.
All right, so let's dive right into this report.
Andre, will you talk a little bit about your team's approach to this research and why you
thought it was important to take a look at the evaluation of assets in Black communities
as compared to other communities?
Housing evaluation, writ large.
ANDRE PERRY: Yeah.
We do know that housing is a central feature of the American dream, in that it somewhat
secures a certain level of success, opportunity and wealth.
In this country, it's been consistently the most prominent way to accumulate wealth over
time.
And in particular for Black people, where fifty percent of our wealth is tied into housing,
it becomes important that we maximize that asset.
But we also know that redlining racial covenants and segregation have limited out ability to
purchase property in certain areas, also for us to get loans, made it difficult for us
to get loans in Black neighborhoods.
And so, we do know that there's been a reduced price because of the problems associated with
segregation, redlining and racial covenants.
But we wanted to see the extent to which crime, education and other neighborhood factors and
housing factors contributed to that price, and how much did race impact the price?
So we went about finding equivalent homes in Black and white neighborhoods, we controlled
for everything from how many bedrooms are in the home, the home size, a number of structural
characteristics.
We also controlled for education, crime, walkability, transportation and a number of other factors.
So before we controlled for those variables, we found that on average in the U.S. metropolitan
areas, homes in black neighborhoods were 50 percent less, they're priced 50 percent less
than white than their white counterparts.
But after controlling for all those factors; education, crime, various neighborhood amenities,
we still found that that housing prices were still worth 23 percent less than their white
counterparts, and that equated to about 48,000 per home, which amounted to 156 billion dollars
in lost assets across the country.
So it was a pretty stark find to see that Black communities have lost 156 billion due
to race and racism.
KHALILAH HARRIS: So what do you say to folk who would offer if affluent Black people decided
to move into those communities that the valuation of those assets would be higher.
So who is the person, or who are the people, who are determining what the value of those
homes would be?
ANDRE PERRY: Well, it's not necessarily the net worth of the people in the communities,
but it is the concentration of Blackness that impacts those communities.
So if you're an upper middle class or upper class person, you're certainly going to get
value by moving into a low income neighborhood in a sense of it will be affordable for you.
However, those properties are generally devalued, meaning that they're coming in below market
rate so you won't get as much money as you would if it was in another neighborhood.
But if you're if you're wealthy or middle income, you're probably going to get a home
at a reduced price.
But in terms of if you can sell it and get what it's really worth, then that's where
the problem comes in.
But it's the concentration of Blackness that it is devaluing, per se, the price of homes
in Black neighborhoods.
KHALILAH HARRIS: That 48,000 per person makes me think of analyses like Ta-Nehisi Coates'
The Case for Reparations in connecting to present day ways in which Black communities
are having resources divested from them or economic barriers.
And Lawrence, you've also done a ton of research on this phenomenon here in Baltimore.
You've coined the terms the Black Butterfly and the White L. Will you talk about implications
of this data for Baltimore and what kind of policies might be able to be created to mitigate
and remediate the disparities that we see?
LAWRENCE BROWN: Well, first of all thank, you for having me.
And when I hear this research from Andre Perry and the Brookings institute, it's really astounding.
It pairs very well with research we've seen from the Chicago Federal Bank.
It also pairs with the Zillow study that shows that in Baltimore, homes that were built in
communities that were yellow lined blue lined or green lined in Baltimore's 1937 Baltimore
Residential Security Map, those homes, the median value for those homes is over one 164,000,
all three of those communities.
But in redlined communities, which were where Black people were restricted to living, those
homes, the median value today is 100,000 dollars.
And so, that's even bigger than the gap that Dr. Perry was, saying 48,000.
Here in Baltimore, if you're in a redlined community, only 100,000 – 164 and up for
a yellow, blue and green community.
So in fact, the impact of redlining is still with us.
And I'd like to say that you know redlining is not just what banks do.
We know that banks often don't lend to Black communes.
And in fact, there's a study by the National Community Reinvestment Coalition that shows
between 2011 2013 here in Baltimore, in the Black Butterfly where Black people are still
concentrated to this day, there's a dearth of lending.
Over twice the amount of lending for homes and small businesses went into the White L
even though white people are only 29 percent of the population and Black people are about
62 percent of the population.
So twice as many loans even though they're half the population compared to Black people.
And so, this legacy of redlining is sort of compounded by the fact that you have lower
home values and we still continue to see in Black neighborhoods less lending.
And the other thing that happens on top of redlining is subpriming.
So actually, Black neighborhoods often don't receive loans, but then when they do, there's
a surcharge, a higher interest rate being charged.
So earlier I said that there's not just private redlining, there's also public redlining.
So there's a 2017 study by Stephanie Smith and the Office of Equity in the Planning Department
here in Baltimore that showed that predominately white neighborhoods receive twice as much
from the Baltimore City capital budget compared to predominately Black neighborhoods.
So this redlining is actually compounded by not just banks, it's also our governments
that are redlining and disinvesting in Black neighborhoods.
And so, this research speaks volumes in terms of the lost wealth, it actually documents
and allows us to actually put a value to these policies and to quantify it in a way that
we can say 150 billion dollars that Black homeowners do not have because their homes
are not valued at the same rate as their white counterparts.
And that's a huge amount of money.
And so, it does absolutely tie in with what Ta-Nehisi Coates was saying about the Case
for Reparations.
Beyond slavery, that was 150 years ago, there is this racist, predatory housing market that's
still extracting wealth from Black neighborhoods and Black homebuyers.
KHALILAH HARRIS: And Andre, picking up on what Lawrence is discussing here in Baltimore,
will you talk a little bit about what other economic development strategies could have
been created or developed with that 156 billion?
ANDRE PERRY: Yeah, that's a great question.
If you look at the average amount of money that Black businesses use to start a business,
that 156 billion would equate to 4.4 million Black owned business.
If you look at the average cost of a four year degree at a public university, 156 billion
equates to 8.1 million four year degrees.
That money could have replaced the pipes in Flint, Michigan 3000 times over.
It is essentially the same amount, 97 percent of the damage, the cost of the damage of Hurricane
Katrina.
And it goes without saying, that money could have gone into equity used to do to remodel
the home, to move into another neighborhood, to finance – I wouldn't advise it, but to
finance a car or a vacation.
But more importantly, that money should have gone into city government so they could provide
public services in terms of education, infrastructure and other services.
So it's a massive amount of money that's lost.
It's the money that people should have used to lift themselves up socially.
And so, what we need to put to bed after this report are these notions that Black folk are
causing their own plight, these theories of cultural pathology that keep coming up whenever
something happens in the Black community.
No, we need to really, instead of saying it all starts at home when something goes wrong,
when people say it all starts at home, that should equate to structural inequality in
the United States.
KHALILAH HARRIS: We see economists Sandy Darity and Darrick Hamilton's research also dispelling
the myth that Black people don't save at the same rates of other races, right, that Black
people aren't investing in their children's education.
I mean, they also say that it's a myth that Black wealth can be heavily impacted by owning
homes, but they talk about it in the context of all of these other factors, they're not
saying that owning a home cannot build wealth.
People use statements like you just said, Andre, that well maybe if they would just
buy houses, as if they aren't being prevented from it.
LAWRENCE BROWN: Or subprime when they do do it.
KHALILAH HARRIS: Right, or getting subprime or having homes flipped on them, because they're
vulnerable and they are trying to experience the American dream.
Lawrence, will you talk a little bit about what policy steps you would recommend for
people here on the ground in Baltimore and in other communities like Baltimore?
LAWRENCE BROWN: Right.
Well, before I get to solutions I want to say that as we talk about redlining, let's
remember that there's greenlighting taking place, there's yellow and blue lighting taking
place.
So there's the advantaging that they're receiving in white communities or whiter communities,
lower interest rates, better lending access, better capital access.
So they're actually receiving the benefits that are associated with what Dr. Perry is
saying, of having a lack of Blackness.
So whiteness is conferring higher values and wealth.
So for me, solutions would include everything from what I call Baltimore neighborhood reparations,
taking ten percent of our city budget and allocating that towards the twenty or so top
redlined Black communities in the city and dividing that proportionately to the damage
that redlining has done to those communities, and allowing a democratically elected racial
equity dispersment board to actually spend that money in that neighborhood to help undo
the damage that has been done by redlining.
There is that.
I would also suggest a three billion dollar racial equity social impact bond.
Because a lot of what redlining has done, and I say that redlining is the economic weaponization
of racial segregation, a lot of what redlining has done is it leads to things like lead poisoning
because you don't have the capital to bait the homes from the lead that's in the pipes,
the soil, the air, the water.
And so, lead is proliferating in Black communities and it's damaging the health and the minds
of our children to this day.
We know it in Flint, but it's also in Baltimore, Chicago, places where there's lots of violence.
Well, that's one of the impacts of lead poison, it inhibits people's ability to regulate their
emotions.
So half of the racial equity social impact bond I suggest is to get rid of lead in our
environments, in Black communities, so that we no longer have this toxic neurotoxin flowing
through the bloods and brains of our children.
And then, you can take maybe 500 billion and address housing, the lack of housing because
people aren't able to get these loans to buy homes, and homelessness that is a result of
all of this, and the foreclosures and the rental evictions that come from not having
this wealth.
And then, also maybe the one billion that would remain from that –
KHALILAH HARRIS: So you said 500 billion just now, 500 million?
LAWRENCE BROWN: I'm sorry, 500 million, yes, out of the three billion.
So yeah, the one and a half billion for lead poisoning, half a billion, or 500 million,
for housing.
And then, also maybe the other one billion I would split up for violence prevention programs,
substance abuse reduction programs and other things that need to be done, education in
Black communities as well.
So three billion dollars here in Baltimore, racial equity social impact bond I think would
be a fantastic way to go, in combination with Baltimore neighborhood reparations, also in
combination with changing our city budget so that we're no longer spending over 500
million dollars on the police, which is more than health, housing, arts, parks, civil rights
and job development combined.
I think that's an apartheid budget.
So I would change all those things.
Baltimore neighborhood reparations, three billion dollar racial equity social impact
bond, and also change our apartheid budget to a Freedom Budget.
KHALILAH HARRIS: Thank you.
Andre, will you talk a little bit about the national level?
What kinds of policies is Brookings recommending or are you recommending as a result of this
data that we have in front of us?
ANDRE PERRY: Yeah.
I'm going to somewhat punt on that question and actually refer people to highlights of
an event we just hosted here at Brookings today, on December 5th.
And they can refer to that video at the Brookings.edu website and look for The Devaluation of Assets
in Black Neighborhoods.
You will be able to find that video, will be posted in a little bit, in probably an
hour of taping this, so folks should be able to see it.
But it spotlighted national experts who gave recommendation to put flesh on the bones of
this research.
KHALILAH HARRIS: So Dr. Perry, I'm gonna leave the final word with you.
Any other details or any other points you want to share with our audience?
ANDRE PERRY: Well, I don't want people to take this report and feel depressed.
Actually, I want folks to feel encouraged.
First and foremost, what you will find in the report, again, by going to Brookings.edu
and look for Devaluation of Assets in Black Neighborhoods – you can google it, you can
find it easily.
But one of the stats in there is that in Black neighborhoods, there are 600 billion dollars
worth of housing assets.
We have strength, it's just devalued.
But this report gives people an ability to name their price.
They can see that their home should be worth more.
And they can animate their community, do things to show and to project that their homes are
indeed worth more.
And they can take risks on their own home that they wouldn't necessarily do if their
homes were actually worth what they're at price.
And so, I'm actually encouraged by this report in the sense of yes, we're made to be devalued,
but people can now demand their true price and worth.
KHALILAH HARRIS: Thank you, Dr. Andre Perry, David Rubenstein Fellow at the Brookings Institution.
Thank you, Lawrence Brown, Associate Professor at Morgan State University.
Hope to have you back.
I'm Khalilah Harris for The Real News Network.
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Thank you.