A new study that aims to explore the historical wealth disparities between black and white residents in the D.C. region found that white households have a net worth 81 times that of black households.
The Urban Institute report, “The Color of Wealth in the Nation’s Capital,” said the Great Recession and housing crisis of 2007 to 2009 exacerbated long-persistent disparities, with black and Hispanic households losing about half of their wealth. In 2013 and 2014, white households in the D.C. area had a net worth of $284,000 while black households had a net worth of $3,500, the report said. Hispanics had a net worth of $13,000. Net worth is the value of assets minus debt.
Asian Americans in the region amassed more wealth than white residents, according to the study. East Asian Indians, for example, had a net worth of $573,000, while that number stands at $496,000 for those of Korean descent and $220,000 for residents of Chinese descent. City Paper first reported on the findings.
But it is the lack of net worth of the region’s black residents — and the reasons behind the gap — that is so stark.
“The wealth differential is staggering,” said William Darity Jr., a professor at Duke University, which collaborated on the study with the Urban Institute and New York’s New School. “The findings we have show that education does not close the racial wealth gap. That’s consistent with what we have found on the national level, but it’s far more dramatic here.”
The report traces the historical trends that have prevented black families from attaining wealth in the region and across the country, from slavery to shortages in affordable housing. In 1840, for example, laws prohibited black residents from owning businesses. More recently, eminent domain and decisions to build highways through historically black neighborhoods in the District have hurt individual and community assets, the report says.
In the District, the proportion of the black population increased as white residents departed to the suburbs. By the 1970s, black residents made up 70 percent of D.C.’s population. By 2015, as whites began returning to the city, and incomes began to rise, black residents constituted 48 percent of the population. Hispanics accounted for 10.4 percent.
But structural barriers in housing and employment have affected the mobility of black residents, according to the report.
“Black people in the Washington, DC, metropolitan area are located at the bottom of the racial wealth hierarchy,” the report says. “There is a tendency to attribute the racial wealth gap to individual character flaws among people without wealth. This report provides an extensive history of the structural barriers in local and national policies, Supreme Court rulings, programs, and practices that created wealth for many White families and prevented wealth accumulation or stripped wealth from many Black families.”
Much of Americans’ net worth is tied to their homes, according to the report, and the typical home value for black households is $250,000 — about two-thirds of the value of white households.
In addition to net worth, the report also examined debt rates, assets, car ownership and unemployment rates. The report indicated that 95 percent of white households owned a car, compared with 78 percent of black households. When it comes to debt, 33 percent of white households held vehicle debt, while 47.3 percent of black households held vehicle debt.
In the D.C. region, white and black residents had similar rates of business ownership, at about 9 percent.
“This result may be driven by the presence of a large federal government and a local district government whose membership and constituents have been largely Black, coupled with government policies designed to increase contracting opportunities for minority-owned businesses,” the report read.
Read the full report here.
https://www.washingtonpost.com/posttv/national/obama-addresses-race-poverty-at-georgetown/2015/05/12/01db892a-f8c2-11e4-a47c-e56f4db884ed_video.html
