Discussions of Critical Race Theory are worse than useless, since most of the people arguing about CRT have absolutely no idea what it is. It has simply become the most recent wedge issue employed by the portion of America’s population intent upon protecting White privilege.
In other words, a distraction.
Why–you might well ask–do these angry people need a distraction? Since I’m not a psychiatrist (nor do I play one on TV), I can’t provide a truly satisfactory answer to that question. But as Americans continue to confront–or refuse to recognize– elements of our social landscape that document how inequitable that landscape truly is, a recent paper issued by The Brookings Institution may prove instructive.
It’s one thing to talk– as we academic types tend to do–about abstractions like “systemic racism.” Those abstractions are frequently dismissed by the people who become defensive in any discussion of unfairness based upon race. The Brookings study is more concrete; rather than talking in abstract terms, it paints a picture of what systemic racism is and does.
In September, Freddie Mac released a groundbreaking analysis of the U.S. home appraisal industry. Consistent with concerns raised by critics, they found that homes in Black and Latino or Hispanic neighborhoods are much more likely than homes in white neighborhoods to be valued below what a buyer has offered to pay.
The Brookings researchers found that Black neighborhoods were associated with much lower property values, and that only a relatively small portion of that effect could be explained by physical characteristics and neighborhood amenities.
Median home values in majority Black census tracts are 55% lower than median home values in non-Latino or Hispanic white census tracts. Part of this difference is attributable to quality differences between the housing stock. Lower wealth in Black communities means that homes in majority Black neighborhoods tend to be older, smaller, and more likely to be attached than homes in neighborhoods with few or no Black people. Lower wealth and lower home values further hinder the ability of Black homeowners to pay for structural improvements to the home and access mortgage refinancing to pay for renovations.
There are also differences in neighborhood quality that show up in housing price differences. Local schools are often less desirable—at least as measured by publicly available test scores accessible to home buyers—in majority Black neighborhoods than in non-Black neighborhoods. Some other characteristics of Black neighborhoods are more desirable, such as access to public transportation and proximity to local stores, but on average, they do not make up for the less desirable features. These structural and neighborhood characteristics explain some of the value penalty to housing in Black neighborhoods, which shrinks to 23% from 55% after adjusting for these factors.
That still leaves a lot of lost value. We estimate that losses amount to $48,000 per home and $156 billion cumulatively in majority Black neighborhoods.
The question is: What explains this?
In the linked paper, the scholars consider–and carefully rebut–criticisms of their research methodology. Interestingly, they also show that White-only neighborhoods are over-valued relative to Black neighborhoods.
Later in the paper, they return to that Freddie Mac study.
A team of economists and data scientists at Freddie Mac analyzed more than 12 million appraisals for purchase transactions submitted to Freddie Mac from January 1, 2015, to December 31, 2020 through the Uniform Collateral Data Portal (UCDP). Freddie Mac is a government-sponsored enterprise chartered to buy mortgages from banks in order to lower the cost and increase the supply of residential loans. In practice, their strict standards set the industry norm for what qualifies as an acceptable loan, and they have access to uniquely detailed data on mortgages submitted by banks.
The research team’s main finding is that homes located in majority Black neighborhoods and majority Latino or Hispanic neighborhoods are significantly more likely to have appraisals submitted to Freddie Mac that are below the contract price when compared to homes in majority white (not Latino or Hispanic) neighborhoods.
The research finds “strong evidence that appraisers discriminate against majority Black and majority Latino or Hispanic neighborhoods. They note in passing that their conclusions track with other other studies, including those showing that Black people are around 36% less likely to be called back for a job than white people with identical resumes.
This is what we mean when we talk about “systemic” racism.
No one is burning a cross on a Black person’s lawn, but the effects are–if anything–more detrimental.