Urban Studies 101
The New Urban Segregation &
Gentrification
The history of racial segregation
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Before the civil rights era:
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Racial segregation was enforced by:
 Overt racial prejudice;
 Institutional discrimination (Jim Crow in
the South and institutionalized
discrimination in housing markets in the
North; and
 Official segregation.
The GI Bill and Home Loans
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After World War II the GI Bill provided
mortgages to returning veterans.
But the government refused to back home
loans in anything but all-white neighborhoods.
Until the 1960s it was legal for white
neighborhoods to prohibit black families from
buying homes.
So virtually all the loans went to white
homeowners.
The Federal Housing Authority
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The Federal Housing Authority directed housing
loans away from the inner-city and to the rapidly
developing suburbs dominated by whites.
Furthermore, the FHA supported segregation. Saying
that racial mixing would create urban disorder, it
actively blocked the construction of housing for
blacks in white neighborhoods.
It also chose to fund water supplies and sewage
systems for racially exclusive suburbs, and supported
realtors who practiced racially discriminatory
practices against Blacks.
Highways
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New Federal Highway funds were also
directed towards connecting cities to suburbs.
Thus they facilitated the growth of suburbs, for
white people, leaving African Americans to
live in inner-city areas.
(The growth of suburbs really helped the auto
industry, and it catalyzed all kinds of new
businesses and industry growth).
White Flight
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White families began living inner city areas in
droves, in search of a house and a picket fence.
Or, the American Dream.
That left African Americans and Hispanics in
the inner cities, which had already started to
decline due to deindustrialization.
Civil Rights Gains
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In theory, the civil rights movement reversed the
legality and legitimacy of policies and behaviors
based on racial inequality.
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Brown Vs. Board of Ed. overturned separate by equal doctrine,
the legal basis for segregation.
Civil rights act of 1964 outlawed racial discrimination in
employment.
Voting rights act of 1965 enfranchised black voters;
Fair Housing Act of 1968 banned discrimination in housing.
A series of Supreme Court decisions outlawed the placement of
public housing units exclusively in black neighborhoods.
1977 Community Reinvestment Act outlawed redlining (denying
people mortgages because their neighbors were Black).
The Persistence of
Residential Segregation
In 2009, the Urban Institute found that:
 One-third of black low-income working families and one-fifth
of Hispanics live in high-poverty neighborhoods, compared
with only 3 percent of non-Hispanic whites.
Similarly, the Lewis Mumford Center found that:
 The average native-born black lives in a neighborhood where
the median income is $28,475 less than the average native
white’s neighborhood.
The Persistence of Segregation
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Black-white segregation has moved downward
since 1980
Yet, of the fifty largest metropolitan regions in
the country, New York City is the 4th most
segregated. In fact, New York City is more
segregated now than it was in 1910 (Center for
Social Inclusion, 2005).
Most other multiracial societies are not this
segregated. The only other place where black-white
segregation indices routinely exceeded 70 was the
Union of South Africa -- under apartheid.
The Persistence of Segregation?
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So segregation persists!
But why?
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Is this because of discrimination in the post-civil
rights era?
Or is it because Blacks simply prefer to live
separately from Whites?
The Three Theories of Racial Segregation
in the Post-Civil Rights Period
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Theory # 1 - economic differences (not racial
ones) separate whites from blacks.
Theory #2 - Blacks self-segregate
Theory #3 - Racial discrimination persists,
though in more suble ways than in the past.
Theory # 1
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Geographic separation of whites and blacks
results from economic (not racial) differences
between them.
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By this theory, it is poverty that keeps blacks in
ghettos. As blacks become more wealthy, they
will leave the inner city for formerly white
residential areas, which will become more
integrated.
Theory # 1
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But scholars have shown that blacks remain segregated from
whites, no matter what their income.
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In all regions of the U.S., no matter how much blacks earn, they remain
racially segregated from whites.
In the 1990s, the degree of racial segregation was similar for blacks
earning $50,000 as for those earning $2500.
This cannot be explained away by lack of knowledge of housing
opportunities outside of the ghetto.
Theory # 2
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Blacks self-segregate
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According to this theory, high levels of residential
segregation are voluntary. Blacks prefer to live in
neighborhoods that are nearly 100 percent black.
Theory # 2
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But survey data shows that blacks actually
prefer to live in mixed neighborhoods.
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95% of black respondents indicated that they
would prefer living in a neighborhood that was
15% to 70% black.
63% of blacks chose a neighborhood that was 50%
black and 50% white as their top choice. This is a
considerably higher percentage than that of whites,
whose ideal level of racial mixing is much lower.
Theory # 2
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Although whites generally agree that blacks should
have the right to live wherever they want, whites
express greater apprehension about living in mixed
neighborhoods.
These apprehensions are often framed in terms of
anti-black prejudice (fear that property values will
decline if blacks move in; belief that blacks will
not maintain their properties as well as whites).
Mixed Neighborhoods
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According to sociologist Emily Rosenbaum
(2005) once a neighborhood reaches a 5
percent black population, it begins to
experience white flight.
The suburbs don’t integrate much better than
urban areas. As blacks move into inner-ring
suburbs, white flight pushes other populations
further out.
Theory # 3
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Racial discrimination has continues to enforce
racial segregation in the housing market.
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Racial prejudice by homeowners is not enough, in
itself, to explain the persistence of racial
segregation.
Active discrimination restricts black access to
certain residential areas and enables whites to
avoid co-residence with blacks.
Discrimination in Housing Markets
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1) Steering: Systematic Housing
Discrimination by Realtors.
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Since the Fair Housing Act of 1968 was passed,
outright refusals to rent to blacks became rare, but
covert barriers discourage black entry into white
neighborhoods.
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Realtors are friendly, but they “steer” blacks
systematically out of white residential areas.
Evidence of systematic
discrimination by realtors
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In 2000, nationwide, whites received more
favorable treatment than blacks from real estate
agents in 17% of housing sales inquiries and in
21.6% of rental inquiries.
The same study showed whites received more
favorable treatment than Hispanics in 19.7% of
housing sales inquiries and 25.6% or rental
inquiries.
Historically, this kind of discrimination has been
more prevalent in the North than in the South.
Discrimination in Lending
Markets
Discrimination by banks and insurers (such as
redlining).
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Home Mortgage Disclosure Act data shows that blacks
receive:
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Less private credit
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Fewer federally insured loans
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Fewer home improvement loans, and
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Less total mortgage money than socio-economically
comparable white neighborhoods.
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And they are more often the vicitms of “predatory
lending.”
The Mortgage Gap
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A 2003 study of home lending data showed 48
percent of mortgage applications by blacks
resulted in mortgages.
In comparison, nearly 76 percent of applications
from whites in 2003 resulted in mortgages.
This study showed that high-income blacks were
rejected more often than low-income whites.
Racial Bias in Lending
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In studies using paired testing, black and
Hispanic communities are “often offered
inferior products, charged higher fees,
provided less counseling or assistance, or are
otherwise treated less favorably than
applicants from white communities” (Squires
1999).
Racial Bias in Lending: why?
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Sometimes it has to do with personal discrimination;
But sociologist Theresa Morris found that it more
often has to do with less personalized practices.
For instance, larger banks tend to offer loans based on
credit scores.
This seems to be a “color-blind” system; however,
African Americans and Latinos tend to have low
credit scores.
Why?
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In part, credit scores are based on how much
access to credit you have.
African Americans and Hispanics have less
access to credit than whites due to:
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Employment discrimination
Bank fees and restrictions
Less access to collateral/wealth
Fewer banks in low income neighborhoods
Credit
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If you don’t have any credit, it’s much harder
to start to accumulate it.
For example, it’s much easier to get a credit
card if you have other credit cards.
If you have no credit card, your credit score is
extremely low.
The insurance gap
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No insurance, no mortgage, no house.
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A National Fair Housing Alliance study of large insurers in
9 US cities found evidence of discrimination against blacks
and Hispanics in approximately half of the tests.
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Applicants from minority communities were
 refused insurance
 offered inferior policies, or
 forced to pay higher premiums.
 Some were required to produce proof of inspection or credit
reports not required in other areas.
 Some were held to more stringent maximum age and minimum
value policy requirements.
 Racial composition of zip codes was strongly associated with
the price and number of policies written by insurance
companies.
Transportation
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Goldsmith and Blakely point out that poor
people have to travel further to jobs than
wealthier people.
In many cities, high speed public transit serves
people living in suburbs headed to inner city
jobs (i.e., honky tubes).
Even if people do have access to public transit,
it might eat up a big chunk of their income.
Vicious Cycle
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How can you accumulate wealth if you can’t
build the credit you need to accumulate it?
How can you take advantage of social
opportunities if you live in a place with poor
schools, high crime, substandard housing, few
banks, etc.?
In other words, residential racial segregation
underlies virtually every other major societal
disparity that exists, including disparities in
education, health care and employment.
Areas with lower property values
have:
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Fewer grocery stores
More environmental hazards
Poor air quality
Worse transportation
Worse services in general
Higher crime
Less access to good health care
Etc.
Whether you own a home affects:
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Whether you can get a loan to send your
children to college;
The kinds of connections you can make and
access to job opportunities
The amount of taxes you pay
The kind of neighborhood you live in (owner
vs. renter neighborhoods)
Gentrification & The
New Urban Segregation
Gentrification and Displacement
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According to urban geographer, Neil Smith,
“gentrification is the process by which poor and
working class neighborhoods in the inner city are
refurbished vial an influx of private capital and
middle class homebuyers and renters.”
The Brookings Institute described gentrification as
“the process by which higher income households
displace lower income residents of a neighborhood,
changing the essential character and flavor of that
neighborhood.”
A Mixed Bag
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Pros and Cons of Gentrification:
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While reinvestment is taking place, and before the
neighborhood becomes unaffordable, many years
can elapse.
During that period, low income residents
experience both pros and cons.
Pros:
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As new residents come in, the city steps up its
services, especially cracking down on drugs,
homelessness, etc.
Also there are more amenities.
Cons:
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But eventually, property values
and rents begin to climb.
Some landlords try devious ways
to force out long-term residents.
Sometimes residents just can’t
afford the services or taxes in the
area.
Eventually long-term residents are
priced out and displaced.
Gentrification & Segregation
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According to geographers Elvin K Wyly and Daniel Hammel
gentrification leads to increase segregation and worsened
processes of racial and ethnic discrimination.
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In 2000, African Americans trying to buy homes in core gentrified
neighborhoods were 1.25 times more likely to be turned down
compared with identically qualified African Americans looking
elsewhere.
As New York City has become more gentrified, it has become more
segregated. In fact, New York City is more segregated now than it was
in 1910 (Center for Social Inclusion, 2005).