Minorities and property values (was: You've got to be kidding me!)

[Jessie-J]

I have an issue that I think might make an interesting topic of discussion.

There is a woman in my office who is moving in to a new home soon. She said that she and her husband were looking for the perfect place for a long time and finally came accross one. She said there was another house that they were thinking about putting a bid on but there were "black people in the neighborhood and they don't help the property value".

Now, I live in St. Louis and I am aware that there is a definitively segregated population here, but I guess I was naive in thinking that people were more accepting (at least tolerant) of other races in such an ethnically diverse metro area.

My question is: does/can ethnicity affect property value directly??? There are affluent minority neighborhoods as there are affluent white neighborhoods. What is it?

My personal reaction was first- shock, then appalled. I'm still thinking "how could someone think that?!"

[Zoning Goddess]

Unfortunately, it still happens a lot. Around here, (the Orlando metro area) though, it's mostly a concern about Hispanics. In my immediate neighborhood of about 200 homes, we have half a dozen African American families and maybe one has a yard that looks like hell. Then we have a bunch of caucasian families with overgrown yards, inoperable cars, etc. The most disruptive families are the redneck ones; they and their kids have all their friends over (translate: pickups up and down the road) and they sit our front drinking beer and playing god-awful country music at ear-splitting levels. Lest ya'll think I live in a nasty area, it's an older neighborhood, homes built between the '30's and the '90's, tons of trees, very friendly, etc. Just a few of the smaller homes have gone to seed, so at least around here, it seems to be more a function of families buying the cheapest houses who don't do the normal upkeep.

[Repo Man]

Sounds like your co-worker is a real piece of work. My guess is that it is all perception. Unfortunatly some people have an unfair perception that all blacks live in run-down areas of a City and they make the assumption that race is the reason for the low property values, when it is ususaly factors such as crime, neighborhood conditions, schools, etc.

[pete-rock]

Race or ethnicity doesn't decrease property value. Negative perceptions about race or ethnicity decrease property value.

[el Guapo]

Ditto what Pete said.

[NHPlanner]

Originally posted by pete-rock
Race or ethnicity doesn't decrease property value. Negative perceptions about race or ethnicity decrease property value.

Bingo.

[green lizard]

Originally posted by pete-rock
Race or ethnicity doesn't decrease property value. Negative perceptions about race or ethnicity decrease property value.

I agree. And let me add that there are laws against overt
racisim. It is undercover rasisim that is harder to beat.
Just hope they are not teaching their kids what may be
to late for them to unlearn.

[Seabishop]

Originally posted by Jessie-J

My question is: does/can ethnicity affect property value directly???

In my experience it does. It shouldn't of course, and its embarrassing that this is the case in modern day America. The ugly truth is that even now if you planted several minorities on my block, the property values would go down because of perception - no matter the quality of the new people. I think its worst in the Northeast and older mid-west cities - its one of the downsides of tradition. Aside from the gentrification of a few neighborhoods, I keep seeing the same old trends continuing and until urban and suburban school systems can equal out it'll probably continue.

[pete-rock]

Here's another example. Chicago's south suburbs are now undergoing the same kind of racial transformation that the South Side had 40 years ago. Blacks are moving into Calumet City, South Holland, Homewood, Glenwood, Lansing, Matteson, Country Club Hills, Richton Park, etc., and are beginning to constitute a majority of the population there. My guess is that the 2010 Census will bear that out.

On the whole, the blacks moving in tend to be a little older, better educated, more professional, less blue-collar, and with higher incomes than the whites moving out, but the perception among many is that the south suburbs are suffering from the transition.

NBC's Dateline show actually did a story a few years ago about Matteson, following a black family moving in and a white family moving out. The white family said their move wasn't racially motivated. They said they were moving because local school test scores were declining, when they were in fact rising; they said that crime was up, when it was actually way down.

The impact on property values comes when this perception reduces the pool of possible home buyers. There's no doubt that when a segment of the population writes off an area for a new home, the market becomes much smaller. It's that smaller pool that reduces property values. Conversely, it's the artificially high pool of possible home buyers that keeps value up in other areas. Like squeezing a balloon in your hand -- overinflated on one end, underinflated on the other.

[Seabishop]

Unfortunately, it also depends on the perception of the particular minority group. My neighborhood has a lot of new Chinese residents. The Chinese are not negatively affecting property values because of most locals’ perception of the Chinese as hard working and studious people who open cute little shops. If they were Hispanics with exactly the same characteristics things would probably be different. Having a local example of a poor neighborhood with the particular minority pushes white flight. People don’t want to stick around as their neighborhood becomes the next [ghetto name]. There are no poor Chinese neighborhoods in the area for people to relate to so they’re not considered a “threat to stability.”

My neighbors have admitted to going to a church outside their parish just because their parish church is too “minority.” The “minority” church is not in a bad area, and is about 70% white.

[Planderella]

Exactly HOW are the property values lowered? Do these people go to their assessors and say "**insert minority group here** just moved into my neighborhood......please assess my property at a lower value so I can moan and bitch about it and eventually move out?"

I've got news for some of you people, I'm house hunting right now and may be coming to your neighborhood very soon.

[Queen B]

.

[Dan]

Planderella, you can be my my neighbor anytime!

Part of my thesis dealt with racial transition in the neighborhood I grew up in. I won't retype it out here, but others summed it up pretty well; it's not the presence of "minority X" that causes property values to drop, but rather the impact the perception of their presence has on the demand for housing. Why the perceptions? As Seabishop said, there might not be many examples of nice neighborhoods dominated by "minority X" in an area; all "majority Y" sees are slums, and they assume that the presence of "minority X" is an indicator of the neighborhood's evolution into a slum.

In newer cities that have developed mostly after World War II outside of the industrial Northeast and race-conscious South, "white flight" isn't so prevalent; there's a much larger percentage of blacks in the middle and upper income classes in places like Denver and Sacramento than in Buffalo or Milwaukee.

I don't think a black homebuyer who moves into an area outside of an area or path where there is a "minority push" will encounter the sort of attitude that Jessie-J described. A black family just two doors down from me in a nearly all-white suburb of Kansas City. They're welcomed with open arms. No eyebrows raised, no "for sale" signs. Why? I live southwest of downtown Kansas City, while the geographic area with a black majority has grown towards the southeast. Jessie - was the subject of your OP considering a home purchase in North County or St. Clair County?

On the other hand, the neighborhood I grew up in was in northeast Buffalo, square in the path of the expanding 'hood. When middle class black families arrived in the 1970s, nobody batted an eyebrow -- unusual given stories I've heard from Chicago and St. Louis. When lower income blacks arrived in the late 1980s and early 1990s, however, both middle class blacks and whites fled. Blacks moving to Cheektowaga, a predomianntly Polish suburb just east of the city limits, are encountering quite a bit of hostility. Older neighborhoods there are "next in line." In the Eggertsville neighborhood in Amherst, just northeast of my old neigborhood, new black residents are encountering little hostility. The area is quite affluent compared to blue-collar Cheektowaga, so residents probably don't fear "slumification" resulting from the presence of their new neighbors.

Typical house in Amherst near the city line (buffaloniagarahomes.com)


Typical house in Cheektowaga near the city line (buffaloniagarahomes.com)


BTW, I owned a house that was a couple of kilometers from the edge of a predominantly African-American suburb called Pine Hills, just west of Orlando. Pine Hills was a large area of mostly starter and mid-level homes, which experienced an influx of lower income black homebuyers in the late 1980s and early 1990s. Folks spoke of "creeping Pine Hills," with more black homebuyers looking for houses on the neighborhood's western edge. When I put my house on the market, a couple of neighbors approached me, and said something along the lines of "hope you don't sell to blacks." I sold the house within a week of listing ... to a Mexican-American guy.

[pete-rock]

Originally posted by Dan
In newer cities that have developed mostly after World War II outside of the industrial Northeast and race-conscious South, "white flight" isn't so prevalent; there's a much larger percentage of blacks in the middle and upper income classes in places like Denver and Sacramento than in Buffalo or Milwaukee.

I don't know if there's a larger percentage of middle and upper income blacks in post WWII Sun Belt cities, but there is definitely no long history of racial animosity in most of them, and a far greater residential dispersal of blacks overall within those cities as a result. About 90% of all blacks in the Chicago area live on the South Side, the West Side, or a few south suburbs.

On the other hand, the neighborhood I grew up in was in northeast Buffalo, square in the path of the expanding 'hood. When middle class black families arrived in the 1970s, nobody batted an eyebrow -- unusual given stories I've heard from Chicago and St. Louis. When lower income blacks arrived in the late 1980s and early 1990s, however, both middle class blacks and whites fled. Blacks moving to Cheektowaga, a predomianntly Polish suburb just east of the city limits, are encountering quite a bit of hostility. Older neighborhoods there are "next in line."

There's lots written about this in many cities. In Detroit and Chicago, the hostilities were concentrated where the racial dividing line was starkest.

[pete-rock]

Originally posted by pete-rock
Conversely, it's the artificially high pool of possible home buyers that keeps value up in other areas. Like squeezing a balloon in your hand -- overinflated on one end, underinflated on the other.

I don't mean to quote myself, but if you look at the opposite of the minorities/property values issue, you see artificially high values elsewhere.

At least in the Northeast and Midwest, this is one area where affordable housing issues can be addressed.

[H]

I am not sure how this will come across, but…

I have seen how the African American community has fought very hard over the past years to not be discriminated against in Real Estate. I can’t speak for all states, but Ga. has strict laws about steering and real estate discrimination (as they should).

Interestingly enough last week an African American homeowner who was refinancing her mortgage with a friend (white-male), said this after her appraisal came in less than expected:

“You’ve known me for a long time, and you know that I am not a racist, but these Mexicans moving in the neighborhood are hurting my property value” – African American Homeowner.

I have my license in Real Estate (I don’t practice, but got it for fun… to see how easy it was, and it was). Although I have sold homes in the past on occasion, to in fact mostly Mexican Americans.

See I picked up this weird hobby of learning Spanish, and I have a Mexican American friend who is a real estate agent for the Mexican community and he is so busy helping new immigrants out of slum apartments and into owned homes (or condos) that I would sometimes help him on the weekends to pick up some extra cash and satisfaction.

This was taking place in ATL a few years back and I remember the reaction from both white and/ or black homeowners when I brought an immigrant family by, “how can they pay”, I would reply “with money”.

This company was a subset of a Mortgage Bank, so the buyers were always qualified, but even with an official commitment letter to this effect, the sellers would not always believe, and a few times I witnessed sellers selling to non-Mexican buyers for less money and when I asked the selling agent why she would say, “it is a more secure transaction”.

But I guess the point I am trying to make is that it dumbfounded me that the African American community would discriminate against the Mexican community after they have fought (and are still fighting) long and hard for equality of “all” races.

What would make this happen?

[Planderella]

Originally posted by Huston

But I guess the point I am trying to make is that it dumbfounded me that the African American community would discriminate against the Mexican community after they have fought (and are still fighting) long and hard for equality of “all” races.

What would make this happen?

Why single out African Americans? Discrimination occurs on every level including race, gender, age, religion, etc. Every one of us is capable (and probably guilty) of discriminating against one or the other for various reasons. Of course it's not right, but it will continue to happen.

[H]

Originally posted by Planderella
Why single out African Americans? Discrimination occurs on every level including race, gender, age, religion, etc. Every one of us is capable (and probably guilty) of discriminating against one or the other for various reasons. Of course it's not right, but it will continue to happen.

You are absolutely correct. I guess I just did not expect it from African Americans since they (as a community) have been such leaders to fight racism (Especially in Atlanta).

It just surprised me is all; this shows my ignorance I guess.

Ps. How come it is okay to (rightfully) bash white people discriminating against African Americans throughout this thread, but once I mention that African Americans discriminate against Mexican Americans I am “singling a race out”? I was just stating an example for variety, is all.

[donk]

In my neighbourhood I am definitely the minority, without even commenting on race orreligion, as I am a single white male, university educated, white collar job. I live in the house that probably depreciates everyone around me's property values, but I am trying to fix that.

As for discriminating against people, I am starting to develop a real bigotry/shortness towards people whose families have lived here for more then 100 years.....

On a serious note, I have never really understood this idea that different races bring down property values. For an interesting take on this subject check out Will Eisner's "Dropsie Avenue".

[Planderella]

Originally posted by Huston


Ps. How come it is okay to (rightfully) bash white people discriminating against African Americans throughout this thread, but once I mention that African Americans discriminate against Mexican Americans I am “singling a race out”? I was just stating an example for variety, is all.

If I recall correctly, none of the other posts specifically named white people as the "discriminators."

[Dan]

Originally posted by Huston
I am not sure how this will come across, but -

[snip]

"You've known me for a long time, and you know that I am not a racist, but these Mexicans moving in the neighborhood are hurting my property value" - African American Homeowner.

With an influx of Hispanics, I would imagine the apprehension comes from having neighbors that you probably can't communicate with.

Outside of the Southwest, I haven't encountered any predominantly Hispanic neighborhoods where the resident population wasn't mostly Spanish speaking. When I lived in New Mexico, the Spanish-as-first -language Hispanics were barrioized, while the English-as-first-language Hispanics were well integrated.

In working and middle class income areas with recent immigrants from Mexico, there are often code enforcement problems, mostly because Mexicans aren't familiar with the concept of zoning or nuisance regulations. CE here seems to have a problem with Mexican immigrants and vehicles - cars parked on lawns, inoperable vehicles, auto repair businesses run out of houses, and so on. It sounds like a stereotype, but unfortunately it's all too true.

[H]

Originally posted by Planderella
If I recall correctly, none of the other posts specifically named white people as the "discriminators."

Oh come on Planderella, please. What has this tread been about then, apple pie?

[H]

Seriously, I did not make the post on this thread to point fingers, single anyone out, call anyone any names or upset anyone, I was just simply stating a true story about an experience that I found interesting and that was related to the topic, and that is all.

If we can’t talk about it, we can’t solve it.

[bet on me]

interesting topic.

[michaelskis]

I have seen the perception of the connection between the two. But here is it the Hispanics that have moved in from NYC. They assume that they can do what ever they did in NYC, and it would be ok here. So, there are several areas of town where people do not know English, don't keep there yards cleaned up, and do not believe that the city can tell them that they are not aloud to have chickens in the high density residential zone.

It is not because they are Hispanic, it is because they just don't understand the way the city operates. As for African Americans, there is no reason that they should have an effect on property values. If all neighbors took care of there property, then the values will stay high.