Wait, I’m Confused. Are Rising Housing Valuations Good or Bad for Black Neighborhoods?

by James A. Bacon

It’s hard to keep up with the twists and turns of what progressives deem to be racist these days.

Once upon a time, gentrification was considered racist because the phenomenon of White people moving into a neighborhood increased local property values, which increased taxes on long-time African-American residents and pressured them to move out.

But that’s old think. Now the problem isn’t that property values in gentrifying neighborhoods are too high. In the City of Richmond, property values in majority Black neighborhoods are too low!

“An under-valued home limits the owner’s ability to access credit through home equity and limits potential profits when the owner decides to sell,” concludes a new report, “Policy Approaches to Racial Disparities in Neighborhood Home Values and Related Risks of Displacement,” published by a nonprofit group, Housing Opportunities Made Equal of Virginia.

“The disparities are the result of a long history of racial discrimination that has adversely affected neighborhoods of color in Richmond,” the report says.

Got that? If appraised property values are too high, higher property taxes drive out Black residents. That’s racism in action. If property appraisals are too low, Black residents are deprived of credit, and they get less for their houses than they would have otherwise. That’s racist, too. Damned if you do, damned if you don’t. Everything’s racist, folks. Everything!

This is the kind of thinking you get when you focus single-mindedly on the downside of every fact pattern through the lens of race.

If I wanted to be Pollyannish about the condition of Black people in American today, I could do just the opposite.

Gentrification is wonderful! It elevates property values. Higher appraised property values mean long-time Black residents gain more access to credit. They can sell their houses for higher prices than they would have gotten otherwise!

I could do that but I won’t. That’s because I recognize that most economic phenomena have upsides and downsides. Whether gentrification is a good thing or bad thing depends on an individual’s unique circumstances. Viewing everything through a racial lens is not terribly helpful — unless the goal is to create a sense of grievance and justify paying handsome salaries to college-educated social justice warriors.

The flaws in the study run even deeper, though, than just the damned-if-you-do-damned-if-you-don’t framing of the issue. The study contends that houses in predominantly Black neighborhoods are under-valued compared to houses in White neighborhoods even when adjusted for square footage, condition, and amenities. Pure bunkum. I’ll address the tendentious methodology in another post.


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Comments

29 responses to “Wait, I’m Confused. Are Rising Housing Valuations Good or Bad for Black Neighborhoods?”

  1. Eric the half a troll Avatar
    Eric the half a troll

    Think of how the black community benefited when 2100 of its homes were seized and destroyed to build the convention center in Richmond (that today sits empty much of the time). Can’t understand why they are always on the alert for racism these days when it comes to their surviving communities.

    1. LarrytheG Avatar
      LarrytheG

      or I-95 when built..

    2. Nancy Naive Avatar
      Nancy Naive

      Power Plant in Hampton. Middle class black neighborhood flattened for a Bass Pro and a few restaurants that kept changing names and are now vacant.

  2. Rafaelo Avatar
    Rafaelo

    "Everything’s racist, folks. Everything!"

    Finally you caught on. The walk signs for instance. Giving orders. Also, asphalt. Inviting people to step on blackness. Institutional racism, in EVERYTHING.

    1. Marty Chapman Avatar
      Marty Chapman

      "If discrimination is creating equity, then it is antiracist." Ponder this quote from Ibram X Kendi.

  3. Dick Hall-Sizemore Avatar
    Dick Hall-Sizemore

    Jim, I think you are misrepresenting. Saying that gentrification pushes black or poor people out of neighborhoods is not racist. It is a statement of fact. A traditionally Black area of town, let's say Church Hill in Richmond, starts attracting a few whites. The houses are near downtown, they are historic, they are cheap, etc. Those folks spend some money fixing their houses up, other whites take notice, the place gets trendy and more start to move in. The market responds to the new demand (as markets are wont to do) and prices go up. Property assessments follow market prices and, pretty soon, the poorer folks can't afford the taxes on the houses they have lived in for a long time. Sure, they have better access to credit, but not necessarily the income to pay the debt service on that credit. Sure, they can sell their property for a higher price, but that extra money does not mean they can afford a better home in another neighborhood.

    Gentrification involves racial elements and has effects related to race, but is not racist, per se. Who said that it was?
    It is not clear what HOME means by an "under-valued" home. Does it mean that it is assessed at less than market value? First of all, that is against the law. Second, it may not be such a bad thing; it would depend on the circumstances. It could mean that the property tax would be lower than if it were not "under-valued", for example. In fact, I wish my house were under-valued. Its assessment, along with my taxes, keeps going up, but that increase in value does me no good unless I plan to move, which I don't. It will benefit my daughter in the long run, however.

    1. Nancy Naive Avatar
      Nancy Naive

      one word, Gullah.

      1. Bubba1855 Avatar
        Bubba1855

        Nancy…I now live in SC…I know what Gullah means. I have two personal experiences. My sister purchased a row home in DC in the late 70's, near the the US Capital. It was a perfect example of gentrification. For several blocks, new Federal employees and Federally connected yuppies continued to purchase these row homes. Yes, a few years later she sold it at a profit. Hilton Head, SC is
        another example…yes…Gullah. Sad but true. Is there a solution for long time, low
        income home owners when their property value goes ballistic?

        1. Nancy Naive Avatar
          Nancy Naive

          I have a friend who lives just outside of the University Park area of Dallas, about 2 blocks from THE Frank Lloyd Wright house and 3 from G.W. Bush. There are numerous people, e.g., Jerry Jones, whose names you would recognize in his neighborhood. He bought his house in the early 90s for $500K. It’s a 1960 3600 sqft Federalist style brick rancher on 1/3 of an acre with a pool.

          it’s value, which is a lot, is only the land.

          As the houses in the area sell, they scrape the lots and build McMansions, sometimes buying multiple lots.

          ah, real estate…

      1. LarrytheG Avatar
        LarrytheG

        It's not racist in intent but it is in impact because generally black folks have much less family wealth than white folks:

        https://uploads.disquscdn.com/images/fc0555ddfd907e54e936ccd5bdf631df15226875b21da5d3e66dea0ae063c995.png

    2. f/k/a_tmtfairfax Avatar
      f/k/a_tmtfairfax

      The real reason that real estate taxes continually increase faster than inflation or population growth is because of the governing bodies' failure to set priorities or channel funds from less effective programs to ones that work well. Once funded; forever funded.

      Look at Fairfax County Public Schools, which offers teachers and most other employees, not only VRS but also a second pension plan. No other school system in the D.C. Metro does this. The State did an audit and found that FCPS overstaffed assistant principals. Not only did FCPS ignore that, but it also added assistant principals.

      The County and the Schools ran (and may still be operating) two competing programs to help pre-school kids with speech problems. As it was increasing class sizes, it had more than 200 curriculum specialists.

      1. LarrytheG Avatar
        LarrytheG

        TMT – my wife worked in Spotsylvania and has VRS and a 403b plan that both she and the schools contributed to.

        What she does not have is a retirement health plan like govt workers have that Fairfax may have, not sure.

        But with regard to neighborhoods… they are primarily defined by income demographics, right?

        The needs of kids in low-income schools are different than the needs of kids in high income schools.

        In Fairfax, how many different languages are in play? A lot, right?

        1. f/k/a_tmtfairfax Avatar
          f/k/a_tmtfairfax

          No one is arguing that there are no extra needs in classrooms such as ESOL. And schools put more money, federal and state (plus local in Fairfax County) into Title I schools.

          I'm arguing that local government often has large staffs, unmeasured programs, duplicative programs unaudited programs, etc. Business and, often, nonprofits regularly look at these issues and make cuts. Why not our local governments and public schools?

          And I forgot about the 403b plans. Fairfax Public School employees that that as well as VRS and a defined benefit plan too.

          With the huge decline in real estate tax revenue from the commercial sector, absent tough decisions and spending cuts, residential real estate taxes will make housing more and more unaffordable for more and more people.

          1. LarrytheG Avatar
            LarrytheG

            I hear you. Our local govt down here seems pretty skinny… comparatively.

            There IS a way to measure and that is the Va Auditor local comparative data.. you can get the max, min, histogram, mean and average if can diddle with a spreadsheet. They provide all the basic data but you have to add on the spreadsheet calcs to get the aggregate comparisons.

            Used to be back in the day BR was much more focused on that kind of discussion than now with the culture war.

            I have the same problem you have, except with charities and entitlements…both have duplicative, redundant programs each with it's own administrative costs.

            So we can agree on slimming down especially in urbanized areas like Fairfax and Richmond but probably not so much in rural I suspect.

            You live in a major urbanized place in NC. It is "better" than Fairfax on these issues?

  4. James McCarthy Avatar
    James McCarthy

    It is a challenge sometimes to hold two apparently conflicting ideas at the same time. The demand upon intellectual discrimination can be as difficult as advocating democracy which Plato noted can be disorderly, dispensing a sort of equality to equals and unequals alike.

    1. Eric the half a troll Avatar
      Eric the half a troll

      They are only apparently conflicting because of JAB’s construct…

      1. James McCarthy Avatar
        James McCarthy

        Let's be patient and read the "upsides and downsides" after serious contemplation and reflection. It may be that up and down are merely directional not definitional. All are entitled to be initially confused.

        1. Nancy Naive Avatar
          Nancy Naive

          Initially, but not terminally.

        2. Nancy Naive Avatar
          Nancy Naive

          https://www.youtube.com/watch?v=e9FLUcpMdm0
          Initially is okay, but not terminally.

  5. Super Brain Avatar
    Super Brain

    Higher assessments are bad for property tax and homeowners insurance. Great for selling though.
    Values can be changed according to need at the time-See D.J. Trump.

  6. Teddy007 Avatar
    Teddy007

    Welcome to public policy collides with a transaction that has two sides. If housing prices rise faster than inflation, the the seller benefits if they wait long enough. If housing construction keep up or surpasses demand, then the buyer benefits. The question is whether public policy should be set to benefit one side or the other rather than focusing non-economic issues.

  7. Eric the half a troll Avatar
    Eric the half a troll

    Aside: 45 just became 34…

    1. Nancy Naive Avatar
      Nancy Naive

      Watched Fox tonight. It was quite enjoyable.

      this too…
      https://x.com/sandiechill/status/1791740767997669450

  8. Nancy Naive Avatar
    Nancy Naive

    Today’s word is allocute.

  9. LarrytheG Avatar
    LarrytheG

    People with low-income/assets cannot afford to pay higher taxes so when their property increases in value, they can be forced to leave.

    OTOH, having a house with lower assessment/taxes has it’s own downsides for folks who want to access credit to improve their homes.

    It’s not just a “black” problem. This happens when a given residential area is re-zoned to be commercial. Low income people cannot pay the increased taxes and are forced to move but before that happens, their homes values as homes is lowered because of the impacts of being close to a commercial area and it’s impacts.

    When it happens in greater numbers to blacks and black neighborhoods, it’s not an intent to discriminate but it ends
    up with racial disparities in impact.

  10. Nancy Naive Avatar
    Nancy Naive

    Today’s word is allocute.

  11. Paul Sweet Avatar
    Paul Sweet

    Has Church Hill always been black? I worked with some white people who talked about growing up in Church Hill in the 40s.
    I think that neighborhoods are always slowly changing in incomes and ethnic groups.

  12. Lefty665 Avatar
    Lefty665

    Posted to wrong thread, moved.

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