Blacks Hurt by Gap in Home Values

Her two-bedroom bungalow in Avalon Park, a middle-class, black neighborhood on the South Side, has nearly doubled in value since she bought it 15 years ago. But Laverne Haynes is certain of this: If her neighborhood was largely white, her home would be worth much more.

“Whites don’t consider our property values as high because of what they think goes on in our neighborhoods,” said Haynes, a receptionist downtown. “They think we have high crime rates and drugs or that we don’t take care of our property.”

Haynes and many other black homeowners have long suspected that home values in black neighborhoods don’t appreciate as fast as they do in white neighborhoods. Now, new research shows that not only do African-American homeowners typically get less when they sell their homes, but the disparity is feeding a growing wealth gap between blacks and whites.

Despite similar incomes, whites in Portage Park on the Northwest Side have access to far more wealth. Their homes sell for nearly 126 percent more than homes in largely black Avalon Park.

“There’s a segregation tax that operates on home values,” said Thomas Shapiro, a professor at Brandeis University’s Heller School for Social Policy and Management who has researched the black-white wealth gap. “Middle-class, African-American homeowners feel it’s just another way they’ve gotten shafted.”

Being middle class is a far more fragile experience for blacks than it is for whites, according to interviews with Shapiro, other experts and dozens of black and white homeowners in Chicago and the suburbs. There are more hurdles to get there and stay there, and less support, a growing field of research is finding.

Consider: Shapiro found nationally, over 30 years, houses in predominantly black neighborhoods appreciate $28,000 less than similar houses in predominantly white neighborhoods. In cities as segregated as Chicago, the disparity can be much worse.

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Haynes’ and Lewis’ neighborhood offers a good example of how the value of blacks’ homes tend to lag behind whites’. Avalon Park is 97 percent black and had a median household income of $44,344 in the 2000 census. Last year, the average single-family home that sold in the South Side neighborhood went for $136,000, Chicago Realtors Association sales data shows.

Across the city, in the Northwest Side Portage Park neighborhood, the median income is nearly identical to that in Avalon Park, but the neighborhood is 70 percent non-Hispanic white. The average house there sold for $308,000 last year — even though the neighborhood had twice as many reported crimes as Avalon Park, according to Chicago Police Department statistics.

So, despite bringing home similar incomes, whites in Portage Park have access to far more wealth: They are selling their homes for nearly 126 percent more than homes in largely black Avalon Park.

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