A resident in Chattanooga, Tennessee, checks clogged mower blades as he mows his lawn. Home prices in majority-black neighborhoods are vastly undervalued, a new study shows. Doug Strickland/Chattanooga Times Free Press via the Associated Press
Homes in black neighborhoods are undervalued by half, on average, amounting to billion in lost value nationally, according to a study released today by the Brookings Institution and Gallup.
The study underscores findings from a Stateline analysis in October showing that nearly a fifth of black-majority ZIP codes saw house prices decline between 2000 and 2017, compared with less than 2 percent of other ZIP codes. Low home prices affect even the most affluent black neighborhoods.
“Location in a black neighborhood predicts a financial penalty,” the Brookings-Gallup study concluded. The average deficit, compared with similar homes in neighborhoods with few or no black residents, is ,000 and could be more than ,000 in the San Francisco area or Lynchburg, Virginia, according to the study.
The Brookings-Gallup study also found that black neighborhoods with the most undervalued homes, such as those around Rochester, New York; Jacksonville, Florida; and Omaha, Nebraska, were more segregated and offered less opportunity for upward mobility to children who grew up there.
Only a few areas did not undervalue homes in black neighborhoods: they included Boston, Nashville and Wichita, Kansas.
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