Community Architect Daily: No progress for black America

If black residents of Baltimore feel that there hasn't been any progress in the mostly African American communities, they are not alone. An update of the 1968 Kerner study shows that 50 years later, blacks all across America are worse off or stagnant in three important categories: homeownership, unemployment & incarceration.

Fifty years after the historic Kerner Commission identified "white racism" as the key cause of "pervasive discrimination in employment, education and housing," there has been no progress in how African-Americans fare in comparison to whites when it comes to homeownership, unemployment and incarceration, according to a report by the Economic Policy Institute released Monday. (Washington Post)

Unemployment got worse with 7.5 percent of African-Americans unemployed in 2017, compared to 6.7 percent in 1968, overall about double the unemployment rate of whites.

Homeownership is stagnant at 40% which is at least 20% below that of whites.

Worst of all, the number of African Americans in jail has tripled since 1968 and so has the wealth gap between black an white! Poverty rates of blacks have dropped from about 33% to about 20%, still African Americans are 2.5 as likely to live in poverty than whites.

Black butterfly, white L: The image of a divided Baltimore

This devastating news coming out at the end of Black History Month has not quite found the resonance in the media it deserves. The SUN only reprinted the WP article and so did the Chicago Tribune.

The Kerner report was frequently quoted in the media after the Baltimore and Ferguson unrests in 2015 and is also referred to every ten years when another round birthday of the initial report about race in America comes up. Each time the sad conclusion is that the country has made little progress when it comes to race.

In Baltimore everything is even worse. The number of African Americans has remained relatively stable in the city while the overall population numbers sagged. The result is that the share of blacks steadily increased, that communities further segregated and the rates of poverty, unemployment and incarceration either remained as bad as they were in 1968 or got worse. Only recently have Baltimore incarceration rates taken a drastic turn for the better.

Jobs, incarceration and homeownership rates are all important to turn around the ongoing racial divide in America. All three ultimately are direct or indirect causes for the disparities in wealth and the persistent poverty.

Baltimore's poverty rate (21.8%) is more than double that of the State (10%). Poverty among African Americans is about twice that of white residents, the poverty rate of blacks has barely budged between 1968 and 2018, hovering around almost 30%. From 1970 to 2000, Baltimore’s total population declined nearly 30%. The renaissance of cities which has brought an influx of new residents to most larger cities, has barely made a dent in Baltimore. Since 1993 Baltimore’s black population has slightly declined annually, while the white population has slightly increased. The increased diversity of income and race in previously majority black cities like DC, which is barely happening here, is seen as unwanted gentrification by many. The issue needs additional scrutiny.

Black household income: Almost half of that of whites

Since most social determinants of health cycle back to income and poverty, it is imperative to find out what causes the high rates of poverty among blacks, even after education attainment has become more equal between black and white since 1968. Statistics give only an indirect answer, but it isn't too far fetched to find the reasons for the entrenched poverty levels linked to real estate and housing values.

Income funds daily expenses, but it’s wealth (or, the difference between someone’s assets—cash savings, a home, a business—and their debts) that offers long-term financial security. It’s protection against crises, unexpected expenses or dips in income, and it can transform the economic prospects of a family, both day-to-day and generation-to-generation.Homeownership has long been a central part of this equation. In 2015, the average net worth of a homeowner in was $195,400, compared to just $5,400 for a renter, according to the Federal Reserve. The significance is even more staggering for people of color. Wealth from equity in a home constitutes 51% of total wealth of the average white household, but 71% for black households. (Huffington Post)

The depressing fact is, that black homeowners could not participate equally in wealth creation through real estate, even if they managed to own instead of rent, because redlining and other discriminatory policies have deprived African Americans systematically of the biggest source of wealth creation in America, rising real estate values. In Baltimore this particular fact is especially obvious when one compares redline maps with maps indicating housing values today: The same areas which were redlined still suffer from depressed property values. The depressed values prevent homeowners from leaving distressed neighborhoods until a point where they just abandon their properties, a key reason for the many vacant properties and a vicious cycle of particular viciousness.

Though Baltimore bills itself as a city of the future, the economic plight of many
of its residents suggest a struggle to break free of the past. Indeed, historical
policies designed to “quarantine blacks,” as Baltimore’s mayor put it in 1911,
have contributed to a city in which one’s race is a dominant determinant of one’s
overall life outcomes. (The Racial Wealth Divide in Baltimore)

Reinvestment strategies must be seen in this context. Adding value to home-prices is next to job creation one of the best strategies of creating wealth among communities of color. It cannot easily happen in highly segregated communities with very high poverty rates where it is nearly impossible to generate market demand. Less segregated neighborhoods are, therefore, desirable from a wealth creation through real estate point of view.

20 years difference in life expectancy

Among the African American community rising property values are frequently not seen as desirable and are often decried as "gentrification" which causes displacement. Indeed, wealth creation through higher property values tends to leave behind renters and people on fixed incomes who not only don't benefit from rising property values but are priced out by higher rents. How difficult the issue is became obvious in a recent community meeting in South Chicago in which former President Obama had to defend the possible gentrification arising from his presidential library project being constructed there.

But here’s the thing I will say, I think a lot of times people get nervous about gentrification, and understandably so. ... It is not my experience ... that the big problem on the South Side has been too much development, too much economic activity, too many people being displaced…(Barack Obama in a townhall meeting in South Chicago)

In Baltimore gentrification is certainly not happening in Sandtown, Harlem Park, or Druid Heights, where, as in South Chicago, the absence of development is a far greater concern. Even where economic development is obvious, there is little actual evidence that the sinking share of blacks in DC or NYC means that the black population was displaced, at least not from the jurisdiction overall. (The share of blacks has gone from over 65% to below 50% but the absolute number of African Americans has stayed relatively stable at about 350,000). The shrinking share is more an expression of the influx of a mostly non-black population.

In 1980, Shaw was 78 percent black. In 2010, the black population in the neighborhood had dropped to 44 percent. (NPR)

No doubt, there is a housing affordability problem in DC, in NYC and in many US cities, including even Baltimore. There are no simple answers on how the wealth gap can be closed while the poor are also protected. It is certain, though, that the large swaths of Baltimore's totally depressed housing values deprive homeowners of color from participation in wealth creation and cements the conditions created in the Jim Crow era.

De-segregation of neighborhoods is one of of the most promising strategies against the complicated web of systemic racial and economic racism. Without wealth creation the 75th anniversary of the Kerner Commission's report will just yield more of the same in 2043.

Incarceration rates bending down recently

The fact that wealth creation is so to coupled to real estate is problematic, though. It would be better, especially in a time when more and more young people have decided that homeownership is not for them and urban living has become the prevalent form of existence, if not owning a home would not mean poverty.

Co-ops, community trusts, decent public housing, and other forms of providing housing outside the profit motive should be strengthened, especially in light of gentrification. Other tools of wealth creation, such as the stock market and investment funds should be truly open to all; best of all, well-being, health and housing should altogether be less a commodity and less dependent on money and wealth.

Klaus Philipsen, FAIA
updated for language and clarity

50 years after the Kerner Commission, Economic Policy Institute
Oregon Public Broadcasting news on Kerner study update
Trump's EPA Concludes Environmental Racism Is Real, CityLab

Healing Our Divided Society: Investing in America Fifty Years After the Kerner Report, co-edited by Fred Harris and Alan Curtis

Baltimore City Planning: Statistical overview
The ever growing gap. Institute for Policy Studies
Racial Wealth Divide in Baltimore, CFED, Jan 2017
Gentrification, Displacement andthe Role of Public Investment, Community Investment Center 2015

Related article on this blog: The racial wealth divide in Baltimore