White Buyers Outnumber Black Buyers in Black Neighborhoods

Some in the LGBT half jokingly note that gays have long been one of the best harbingers of neighborhood change - and some would argue gentrification - given their willingness to move into marginal or historically black neighborhoods due to (i) less concern about neighborhood schools, and (ii) a desire to buy low priced historic homes in need of major upgrades.  Indeed, after coming out, still on a mortgage for the home for my former wife, I was limited in my buying power and attracted to post turn of the 20th century architecture. The solution: buy in a predominately black neighborhood close to Old Dominion University and Norfolk's upscale Ghent neighborhood.  My 1917 arts and craft house needed a thorough redo - new kitchen, bath, removal of old carpet (and thousands of carpet staples) to refinish hardwood floors, repainting inside and out, new roof, etc.  The result was a historic home at far less the cost (much of the work other than plumbing and electrical was done by my ex-boyfriend and me) than in posh and expensive nearby Ghent.  Since I bought the house, new - and much higher priced homes - have been built on vacant lots and many other homes on the street have been extensively remodeled (my youngest daughter and her family live in the house now).  

As a piece in the New York Times notes, the trend that I was part of out of financial necessity is spreading across the country with whites moving into historically black neighborhoods while blacks and other minorities buy in the suburbs. The verdict is out on whether this is a good thing or a bad thing, likely depending on one's perspective.  For cities, it is certainly helping to rebuild their tax base.  One disturbing note: mortgage lenders may be redlining minority buyers in rapidly gentrifying neighborhoods.  Here are article highlights:

RALEIGH, N.C. — In the African-American neighborhoods near downtown Raleigh, the playfully painted doors signal what’s coming. Colored in crimson, in coral, in seafoam, the doors accent newly renovated craftsman cottages and boxy modern homes that have replaced vacant lots.

To longtime residents, the doors mean higher home prices ahead, more investors knocking, more white neighbors.

Here, and in the center of cities across the United States, a kind of demographic change most often associated with gentrifying parts of New York and Washington has been accelerating. White residents are increasingly moving into nonwhite neighborhoods, largely African-American ones.

In America, racial diversity has much more often come to white neighborhoods. Between 1980 and 2000, more than 98 percent of census tracts that grew more diverse did so in that way, as Hispanic, Asian-American and African-American families settled in neighborhoods that were once predominantly white.

But since 2000, according to an analysis of demographic and housing data, the arrival of white residents is now changing nonwhite communities in cities of all sizes, affecting about one in six predominantly African-American census tracts. The pattern, though still modest in scope, is playing out with remarkable consistency across the country — in ways that jolt the mortgage market, the architecture, the value of land itself.

In city after city, a map of racial change shows predominantly minority neighborhoods near downtown growing whiter, while suburban neighborhoods that were once largely white are experiencing an increased share of black, Hispanic and Asian-American residents.

At the start of the 21st century, these neighborhoods were relatively poor, and 80 percent of them were majority African-American. But as revived downtowns attract wealthier residents closer to the center city, recent white home buyers are arriving in these neighborhoods with incomes that are on average twice as high as that of their existing neighbors, and two-thirds higher than existing homeowners. And they are getting a majority of the mortgages.

Such disparities in incomes and mortgage access aren't apparent in suburban neighborhoods with a growing share of Hispanic, black and Asian-American residents.

In South Park, a neighborhood with picturesque views of the Raleigh skyline, the white home buyers who have recently moved in have average incomes more than three times that of the typical household already here. Whites, who were largely absent in the neighborhood in 2000, made up 17 percent of the population by 2012. Since then, they’ve gotten nearly nine in 10 of the new mortgages.

In neighborhoods like South Park, white residents are changing not only the racial mix of the community; they are also altering the economics of the real estate beneath everyone. . . . . Some of that change can be positive, she said. This realization was not: “Our black bodies literally have less economic value than the body of a white person,” she said. “As soon as a white body moves into the same space that I occupied, all of a sudden this place is more valuable.”

In the places where white households are moving, reinvestment is possible mainly because of the disinvestment that came before it. Many of these neighborhoods were once segregated by law and redlined by banks. Cities neglected their infrastructure. The federal government built highways that isolated them and housing projects that were concentrated in them. Then banks came peddling predatory loans.

“A single-family detached house with a yard within a mile of downtown in any other part of the world is probably the most expensive place to live,” said Kofi Boone, a professor at North Carolina State University’s College of Design.

Here, because of that history, it’s a bargain. And while that briefly remains true in South Park, the disinvestment and reinvestment are visible side by side on any given street.
African-Americans have remained so segregated in American cities in large part because white people have avoided living in black neighborhoods, and seldom even considered buying a home in one. What changed, then?

How did the first developer to renovate a home know a new market would be waiting for it?  “I guess the answer is I didn’t know,” said Jason Queen, a 39-year-old developer in Raleigh. “But I did know that I wanted to be in downtown.”

Mr. Queen, who had worked in historic preservation, has rehabilitated or built about 100 homes in the historic corridor just east of downtown Raleigh, starting with a house that he and his wife lived in and renovated on the edge of South Park a decade ago. Mr. Queen was his own market: He rejected long car commutes and cul-de-sacs. This part of the city was more affordable than anywhere else near downtown. And he wanted diversity.

“What I didn’t want to do is move to a neighborhood where all the kids look exactly the same as my kids,” said Mr. Queen, who is white. “I didn’t think that was the right thing to do.”

Crime plummeted in the years preceding all this redevelopment. Public housing projects were demolished for mixed-income housing. Cities reinvested in neglected downtowns.

The run-up in home prices in the early 2000s also left middle-class households searching for affordable housing. By then, many working-class white neighborhoods in good locations had already gentrified. Predominantly African-American and Hispanic neighborhoods were what remained.

[I]n the aftermath of the housing bust, mortgage lending tightened, particularly for African-Americans and Hispanics. White buyers got a head start in places like South Park just as they were becoming newly desirable. By the time more lending returned for minorities, these neighborhoods were increasingly priced out of reach.

“The city is always the battleground; when it was failing, that was a problem, and now that it’s succeeding, that’s also a problem,” said Ken Bowers, Raleigh’s planning director. People used to debate whether the city was delivering equal parks or transit service in all neighborhoods. “Now the debate we’re having is ‘Are these parks gentrifying the neighborhood?’ ” he said. “That’s a very dysfunctional place to be.”

In the suburbs, a far different set of processes is driving the demographic change, as middle-class minority families seek more space or better schools, as immigrant communities take root, or as families are increasingly priced out of the city. This kind of increased diversity may bring its own challenges. But at least among the homeowners, there is something stabilizing in the fact that the new households economically resemble their neighbors — whether the communities around them are working class, middle class or wealthy.

“We made some progress by getting to a point where the entry of one black family did not signal that, ‘Oh my god, this is a neighborhood that’s going to fall apart,’ ” Ms. Ellen said. “Maybe we can get to a point where the entry of one white family is not a signal that, ‘This is a neighborhood that’s immediately going to have million-dollar condos.’ ”

My 1917 house after a near total remodel.