Abstract
This research examines how changing neighborhood racial and ethnic composition affects residential property values. How the housing market responds to neighborhood racial and ethnic diversity has implications for trends in segregation as well as ethnoracial economic inequality. With data from the 1990 to 2005 time period, this study provides updated answers to an urban question posed since the mid-twentieth century: “Do property values drop when Blacks move in?” The geographical focus is the Pennsylvania Division of the Philadelphia Metropolitan Statistical Area. Home sales transactions are used to estimate property values by tract, which are used to calculate home value appreciation. A unique typology is used to categorize neighborhoods based on shifts in racial and ethnic composition. Analyses of the data indicate that predominantly White (PW) neighborhoods that experienced a large increase in the percentage of Black residents had lower levels of home value appreciation than comparable PW neighborhoods without significant racial turnover. The results suggest that the dynamics of residential real estate markets reinforce the large, persistent racial wealth gaps that define American urbanism.
Published Version
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