Let’s get REAL about segregation today

#BLM - Let’s get REAL about segregation today. HomeKasa's view on the issues of the day


There’s an indisputable systemic problem for African Americans in real estate. Discrimination in home sales, loan practices and renting still exists, not allowing them the opportunity to move to better neighborhoods. This discrimination in housing affects them more than others. Current measures and laws in place are not effective.

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The location of their home plays a huge role in impacting African Americans’ economic opportunities. To fix this, we have to take a multi-generational, multi-pronged approach focusing on awareness, job, support system and education. It requires a long-term concerted effort from citizens, private sector and public sector.

Let’s get to the bottom

To understand and address the current unrest in America with African American lives – the Black Lives Matter movement, we must take a holistic approach. Only looking at it from the vantage point of law enforcement abuse issues doesn’t paint the whole picture.

We need a holistic approach to eliminate the systemic discrimination against Black people

First, let me establish that I have not lived in the shoes of African Americans. I work with them and I have learned a lot from them. While I do not claim to fully know their pain, I am empathetic, and I want to see their issues resolved. In this article, I try my best to take a data-driven and evidence-based approach based on studies by others. Until we are aware of the underlying problem, we cannot do something about it. Fixing the underlying problem is the only way to address the issues for good. Otherwise, we’ll be putting band-aids and treating the symptoms.

How fair is the act?

A similar period of unrest started when Dr. Martin Luther King, the man who had the audacity to vocalize his dreams on equality, was murdered. This quickly led to the signing of the Fair Housing Act (FHA) in 1968. FHA outlawed discrimination in housing. What has happened in the last 52 years? Well, progress is slow, to say the least. Many studies reveal a systemic discrimination that continues to put African Americans at a disadvantage.

Racism has become more subtle over the years

Loan redlining & rent increase

Studies show discrimination in loan and rent practices. African Americans:

  • Obtain fewer loans than white applicants, for the same income2
  • Even those of high income, were almost 2X as likely to end up with subprime mortgages as low-income whites, even if they qualified for prime loans and offered a down payment 2.
  • Pay about 5-6% more rent for identical units in the same white neighborhood 4.

Geographic Steering

African American home buyers and renters experience housing discrimination from the start of their housing search 1

  • Realtors show more houses in predominantly African American neighborhoods than in a White neighborhood for the same price point to African American clients. Over time, the houses in the two neighborhoods appreciate differently, continuing to keep African Americans in the lower wealth strata 2.
  • Real estate agents and rental housing providers recommend and show fewer available homes and apartments to minorities than equally qualified whites 3.
  • Hyper-segregation is still common in metropolitan areas with the largest African American communities 2.

All things being equal, there’s a penalty for the skin color. Because of manipulation and due to lack of awareness, many African Americans tend to congregate in the same neighborhood that doesn’t appreciate much in property value.

All things being equal, there’s a penalty for the skin color

So, why does this matter?

Well, location matters

Studies have established that where someone lives – their ecosystem, impacts health, education, and personal outcomes 5. For context, look at how location affects the industry and therefore the opportunity to available to residents. While Silicon Valley is the hub of technology, Detroit is the hub for car manufacturing. The neighborhood has a network effect and influences others’ behavior. There are different rewards in different locations 5.

African Americans tend to live together in the same neighborhood. While this is broadly the case for other ethnicities too, the systemic discrimination and predatory loan behavior is predominant in African American neighborhoods, limiting their economic mobility. This stunts the very essence of the American dream. The neighborhood dictates education, services offered, and set examples through peers and role models.

The systemic discrimination and predatory loan behavior is predominant in African American neighborhoods

Poverty & Scarcity

Poor white Americans live differently from poor African Americans. 75% of poor whites live in predominantly middle-income neighborhoods. On the other hand, 75% of poor African Americans live in neighborhoods where 20% of the households are in poverty2.

Poor neighborhoods struggle for many services, including water

Poverty leads to lack of access to certain resources, and scarcity. Scarcity drives certain behaviors, regardless of poverty, ethnicity or geography. To put this in context, when the Covid-19 pandemic started, otherwise well-behaved people fought for toilet paper rolls 7. This behavior is amplified for everything in poor neighborhoods – they struggle for many services including water every day. When certain local resources are limited, groups within the neighborhood will compete for these resources amongst themselves 5. The current public infrastructure 1 and services are not enough to support them.

Pay inequality

Pay inequality further impacts the upward mobility of African Americans. With equivalent identities and qualifications for the same job, black workers are significantly less likely to receive callbacks, and job offers, than white workers. When they do get the job, they get paid less. The hourly wage percentage by race and gender in 2017 shows these earnings: White males: 1, White Females: 0.78, Black Males: 0.76, Black Females: 0.61 [6]. In addition to race, African American women face gender issues. This intersectionality combined with unfair expectations, unique challenges, and biased assumptions about where they fit in the workplace that differ from the perceptions held about women from other racial and ethnic groups as well as men [18].
Black women are paid less than White women

Social pull

Location impacts social ties. Individuals may be encouraged to conform to local social norms conveyed by neighborhood role models and other social pressures. Studies show that social networks are very influential that they are difficult to break even after moving away.

  • Social cohesion is important to the functioning of the society
  • Disorder and lack of social cohesion are associated with a greater incidence of mental distress and criminality in neighborhoods
  • Neighborhood peer influences among low-income youth are strong predictors of a variety of negative behaviors, including crime, substance abuse, and lack of labor-force participation
Social networks are difficult to break

How does location impact education?

Peer group influences grade point average, mental health, antisocial behavior, school attainment, and substance abuse 5. Schools in poor locations have less funding and resources, fewer experienced teachers, less rigorous curricular options, and fewer school counselors. Poor neighborhoods pay lower property taxes, impacting funding for schools. Education helps to raise awareness and opens the door for opportunities. This will in turn reduce scarcity and poverty. The custom program should also focus on training children of other races on how discrimination negatively affects them and others.

Poor neighborhoods pay lower property taxes, impacting funding for schools.

Why education matters?

African Americans are 2X likely to be unemployed than white Americans 14. As we become a knowledge-based economy, we need 2.3X more college education for jobs in 2020 as opposed to 1973. People with college degrees are 2X likely to be employed 9. While education helps this individual, it also helps the society. They pay larger taxes, are less reliant on social programs, and it reduces crime rates.

In addition to addressing education for children, support infrastructure for families need to be addressed. Otherwise, the ecosystem will not readily evolve. To address systemic long-term problems, systemic long-term interventions are required. It takes many generations to change behavior and we need to be patient with the process.

To address systemic long-term problems, systemic long-term interventions are required

The housing choice voucher program

Many states and locations do not mandate landlords to accept section 8 vouchers for rent. Landlords discriminate based on the source of income. This limits the mobility of African Americans. In DC, landlords are 71 times more likely to exclude African American renters than white Americans with vouchers 11. In parts of DC, vouchers pay about 175% of the market rate for an apartment, and even with source of income protection the violations are abound 13. In New Orleans, 99% of voucher holders are African Americans and 82% of landlords refused to accept vouchers 12.

We all should care

About 13.4% of the American population are African Americans, roughly about 44 million people 15, 16. A systemic impact on African Americans is a significant impact on society. Solutions need to focus on addressing issues where people live currently – location matters. While laws are in place to assert fairness and stop discrimination, we have a long way to go.

Solutions need to focus on addressing issues where people live currently – location matters

We need to address the basic needs first – think Maslow’s hierarchy of needs 8. This addresses scarcity and the resulting behavior. Then, we need to approach the problem from multiple angles


    Programs should focus on awareness and behavior training for the adults. Incentives must be put in place for taking part in awareness programs. Awareness trainings should also focus on all residents including white Americans, so that the community can grow together.


    Vocational training programs and career opportunities for adults should be prioritized to improve their overall quality of living for their families. Job seekers in poor neighborhoods tend to rely on neighbors for finding jobs. Therefore, a grassroots approach is required here. When parents are educated, the children have a higher probability of education. The home environment affects how the children are raised. If at least 25% of the community doesn’t change, the system will pull back people trying to advance 5.


    Employers must be mandated to train African Americans and minorities on their rights. Just because laws exist, it doesn’t mean that people are familiar with the laws. This is true for immigrants as well.

    Psychological well-being

    Poverty results in stress. Therefore, effective stress management measures must be put in place in African American neighborhoods.


    One size does not fit all when it comes to education. In addition to regular education, schools to provide custom programs targeting neighborhood-specific issues. This should give children of all races the tools to design their future. Education increases the probability of escaping poverty.

    Loan and Rent

    Heavy penalties must be placed for violations by both banks and landlords. Redlining should be severely punished. Mortgage lenders should notify every loan applicant of interest rate equality. Accepting housing vouchers must be mandatory across all states and locations. These must be addressed immediately. These should also be a part of the awareness training for African Americans 17.

    Realtor discrimination

    To address geographic steering, all realtors must provide a notice to their clients about their right to look for property anywhere immediately. Clients should also be made aware of the concept of geographic steering. This should be made a practice when the realtor is hired.

We need a concerted effort to break out from the systemic discrimination and oppression faced by African Americans over many generations. We have to take a long-term view. We did not get here in a day and the issues cannot be fixed quickly. It takes generations to make changes. We need a multi-decade multi-pronged approach.

Together, we can do it!
We can do it

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