The Neighborhood Is Mostly Black. The Home Buyers Are Mostly White

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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.

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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.

As White Suburbs Grow More Diverse, Nonwhite City Centers Grow More White

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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. Minority borrowers in those places have incomes similar to that of their new neighbors. They receive mortgages proportionate to their share of the population.

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In Many Nonwhite Neighborhoods, New White Home Buyers Wield Outsize Economic Power

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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.

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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.

“That’s what finally came to me — it’s not just the fact that the neighborhoods look different, that people behave differently,” said Kia E. Baker, who grew up in southeast Raleigh and now directs a nonprofit, Southeast Raleigh Promise, that serves the community.

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.”

The value of place

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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.

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South Park grew up around Shaw University, a historically black college founded in 1865, and in the early 20th century it was home to black professors and doctors trained there, and to dozens of black-owned businesses.

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The rise of a new market

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?

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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.”

But cities across the country have changed as much as preferences like Mr. Queen’s have, and it is hard to untangle the two. 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.

The old housing stock close to the center of many cities was also approaching the end of its life. Stuart Rosenthal, an economist at Syracuse University, argues that it’s often possible to predict a neighborhood’s income level 20 years into the future by the age of its housing stock today. Older homes are more likely to be replaced. And in the American housing market, newly built or renovated housing invariably goes to higher-income households.

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Then in 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.

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[Editor’s Note: The original article contains maps and charts that may be of some interest to readers.]