One last parting note about this poorly conceived hit piece which attempts to lay everything at the feet of black pathology and dysfunction. It’s wrong in every way. I’ll cite some sources which may helphttps://quillette.com/2018/07/19/black-american-culture-and-the-racial-wealth-gap/ …
This point deserves further elaboration—was the fall in home prices exogenous? If the home prices were falling, they were higher before, which would imply higher past rates of wealth accumulation, no?
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Exactly, and, more important, white home prices continued to accelerate. And this homebuying was subsidized by the federal government. In fact, we find whites *less* likely to be homeowners in highly segregated areas as the racial price differential was more acute there.
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Exogenous or endogenous, though? Do tax dollars tend to redistribute money from big cities to burbs? The mortgage interest tax deduction theoretically does, but urban landlords can deduct their interest, too, so that’s a wash unless multifamily property owners are less levered.
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Not a wash if (1) the deduction is a function of the amount financed (the home price) and (2) if the public goods distributed are unequally distributed.
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That’s what I’m getting at with the leverage question. Adjusted for risk, are single-family owners more levered than landlords? (Keeping in mind that home price appreciation reduces leverage, so over time suburban owners get less levered, inner city landlords more)
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That’s a great question. I defer to
@leah_boustan on this as she’s the expert.
End of conversation
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If the home ownership base started out white, and they sold at declining prices to black buyers, it’s possible (depending on the slope of the curve fitting racial composition to home price) that the white residents lost more—what does the curve look like?
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That’s a counter factual— the white homeownership rate was increasing at the same time. Also, you’d need to consider losses relative to inflation and the fact that subsidies made the new homes cheaper as supply was outstripping demand in white suburbs.
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If supply was outstripping demand, prices went down. Inflation shouldn’t have a disparate impact here, except insofar as white homeowners were more hedged. But white people also own (proportionately?) more finanacial assets that *aren’t* hedged, like bonds and pensions
End of conversation
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