Racial Gap in Home Values Puts Blacks at a Severe Disadvantage in Financing the Higher Education of Their Children:
Home ownership has been the chief engine for wealth generation for millions of Americans, both black and white. Each year thousands of American families use the equity in their homes to help finance their children's higher education. Blacks start out with a huge disadvantage here because only about one half of all black families own their home. In contrast, more than three quarters of all white families are homeowners.
But a new study by Thomas Shapiro, a professor of social policy at Brandeis University, finds that even for blacks who own their home, a significant racial gap occurs in the appreciated value of the property. This equity value gap means that black families have less credit available for home equity loans to help pay for their children's higher education.
Professor Shapiro found that nationwide, over a 30-year period, homes in predominantly black neighborhoods appreciated $28,000 less than nearly identical homes in predominantly white neighborhoods.
In cities where racial residential segregation is most pronounced, the racial gap in home appreciation values is even greater, according to Shapiro's research. For example, in the middle-class community of Avalon Park in Chicago the median price for a single-family home is $136,000. Avalon Park is 97 percent black. In the predominantly white Portage Park neighborhood where the median income is exactly the same as in Avalon Park, the median value of a single family home is $308,000.