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> Is the “dream” of homeownership really just a massive, intergenerational wealth transfer? Yes & it has been this way since the inception of government backed

> Is the “dream” of homeownership really just a massive, intergenerational wealth transfer? Yes & it has been this way since the inception of government backed loans. I've recently been digging into the history of housing discrimination in the US and how it relates to the racial wealth gap between blacks and whites. In my opinion there is a clear line from redlining, blockbusting, white flight & loan discrimination to the massive wealth gap among races we see today. It's quite clear to me that one of the best ways to build generational wealth is by the older generation passing off homes to the younger ones.

nostromo 9y ago
Wouldn't white flight followed by re-urbanization favor people of color in terms of home value? I know in my city the neighborhood that historically had high black homeownership levels now has a million-dollar entry fee. Meanwhile the suburbs are undesirable and cheap.
- illumin8 9y ago
  No, because what do you think those white people fleeing to the suburbs in the 80s and 90s did? They didn't sell homes to minority homeowners because the banks wouldn't give minorities loans. They either sold to other white landlords, or became landlords themselves. So, the million dollar apartments are owned by wealthy white landlords who have realized 100% of the appreciation, while systematically pushing poorer minorities, who are almost 100% renters, out to even worse ghettos.
  - nostromo 9y ago
    Home ownership by people of color did rise during white flight (and dramatically so). https://wp.zillowstatic.com/1/ThenAndNow_Race-Final-594696-1024x664.jpg https://wp.zillowstatic.com/1/ThenAndNow_Race-Final-594696-1...
- 40acres 9y ago
  This is a tricky question for me to answer because I've been doing more research on the "back end" aka why minorities weren't getting housing as opposed to what's happening now w/ re-urbanization. Part of it is that many homes sold during the white flight and blockbusting era did not go to minorities, there were explicit causes in the sale to prevent this. Another part of this is the fact that minorities who did buy bought "on contract" which means that they did not owe a mortgage to a bank but to an individual (who most likely was a blockbuster) they did not build equity (wealth) and were subject to very harsh loans. I don't know what percentage of homes sold to minorities during this era were "on contract" so it's hard to quantify the effect. Based on an anecdote it's definitely true that some amount of minorities benefited from re-urbanization.. I was in NE Portland a few weeks ago and had a very interesting conversation w/ a local Uber driver who lamented the fact that his family had sold his grandmothers place in the 90s, this home has probably appreciated at least 3-4x since then.
flanbiscuit 9y ago
There's a good NPR podcast series that goes into this. First season is about NYC, second is about L.A. https://www.npr.org/podcasts/555340969/there-goes-the-neighborhood https://www.npr.org/podcasts/555340969/there-goes-the-neighb...
- 40acres 9y ago
  Thanks for this. I've been really interested in learning about housing policy and trends lately & wanted to come across a podcast about it.
tropo 9y ago
The reality is that the house is sold to cover the cost of a nursing home, or that a reverse mortgage is used to convert that value into living expenses, or that the older generation dies with home equity loans that were taken out to cover expenses.
illumin8 9y ago
I've said it before, but the millennial generation will not be kind to boomers when the history books are written. Our parents have basically fucked us over in a million different ways, but especially with housing. I see a ton of boomers who have basically shredded the economy by creating multiple bubbles in the stock market and housing, destabilized the middle east and thrust us into many unwinnable wars, blown through all the home equity they had with home equity credit lines, never saved for retirement, and now expect to be taken care of by social security and medicaid during retirement. This is apparently what happens when you have a strong cultural revolution during the 60s, but everyone grows up and gets greedy. Although I'm not too optimistic the millennial generation won't do the same exact thing when they turn 40... edit: forgot to mention wars...
- deleted 9y ago
  [deleted]
- rubicon33 9y ago
  Yea, this article is really not surprising to anyone who isn't a boomer. I look around and see smart, hardworking people with some of the "best" jobs in the nation (doctors, lawyers, programmers, etc.) who can't afford to buy a home. Between student debt, the cost of living, nearly 50% taxation (and rising in CA), wage stagnation, and real estate greed... it's nearly impossible even for those young people who are doing well. If you ask me, the boomer generation certainly left it (far) worse than they found it. Thanks, boomers, for de-regulating banks, leading to financial instability that continues to this day. Thanks, boomers, for the 2007 Great Recession. Thanks, boomers, for buying up homes in 2008 at a discount, and selling it back to the next generation at an exorbitant price. Your "investment" is literally why we have a housing crisis. Thanks, boomers, for the massive mismanagement of federal, and local governments. Thanks for the wars, boomers. Thanks, boomers, for some historical wage stagnation. It's no surprise that people are struggling to afford a home, and waiting to start a family.
  - Lionsion 9y ago
    > Yea, this article is really not surprising to anyone who isn't a boomer. I look around and see smart, hardworking people with some of the "best" jobs in the nation (doctors, lawyers, programmers, etc.) who can't afford to buy a home. Between student debt, the cost of living, nearly 50% taxation (and rising in CA), wage stagnation, and real estate greed... it's nearly impossible even for those young people who are doing well. If you ask me, the boomer generation certainly left it (far) worse than they found it. Is this a national problem you're seeing, or one specific to CA/NYC/etc.? I suspect it much be a local problem, since I can't see doctors, lawyers, and programmers having a hard time affording a home outside a few very specific locations.
btilly 9y ago
Theories like this one do not explain how it is that immigrant groups do reasonably well. The history of the USA is filled with people who arrive with no money, poor language skills, sometimes traumatized - and yet wind up doing well within a generation or two. https://en.wikipedia.org/wiki/List_of_ethnic_groups_in_the_United_States_by_household_income https://en.wikipedia.org/wiki/List_of_ethnic_groups_in_the_U... is a good starting point to think about. Look at groups such as Vietnamese and Cambodians. They mostly arrived in my lifetime. Everything is against them. Poor language skills, widespread PTSD from what they witnessed, no savings - pretty bad picture. And yet, look where they are today versus blacks. How did that happen?
- JumpCrisscross 9y ago
  > And yet, look where they are today versus blacks. How did that happen? Some might interpret this uncharitably. To defray that potential, would you mind giving us a hint as to what you've found / are suggesting?
  - RussianBot 9y ago
    I didn't hear a dog whistle. I heard an actual question.
- 40acres 9y ago
  > And yet, look where they are today versus blacks. How did that happen? Generally I don't like to compare the struggles amongst minorities in America. There is a multitude of factors that come into play when analyzing these types of things.. But when you look at the history of discrimination vs. black people in America you need to go back and consider the effects all the way back from slavery, to Reconstruction/Redemption, Jim Crow, discriminatory housing policy, discriminatory lending, discriminatory policing, discriminatory criminal "justice", disenfranchisement on multiple levels, lynching, etc. etc. etc. This is 400+ years of compounding discrimination against black people. I'm not saying the Vietnamese and Cambodians (and for good measure the Irish & the Italians) did not have it bad.. but I think we need to look at this with a broader lens.
ucaetano 9y ago
> In my opinion there is a clear line from redlining, blockbusting, white flight & loan discrimination to the massive wealth gap among races we see today Yes! And due to inheritance, wealth propagates within racial lines. White families build wealth subsidized by the government and have white kids, who have a huge advantage over non-whites due to the historical wealth accumulated. It is a self-reinforcing and self-propagating process, and now, old whites use zoning laws to extract value from younger generations, particularly non-whites and poor whites, whose families don't own real estate.
- madengr 9y ago
  It’s all the white mans fault!
- SlowRobotAhead 9y ago
  Out of curiosity... forgetting rates for a moment and just checking on numbers of people, aren't there more white people in abject poverty than black people entirely in the USA? Seems if the argument is that white wealth propagates - that there should be few poor white people anywhere. There has been no racism towards them, and lots of time to build up the "subsidized wealth". I'm not crazy about all this generalization based on skin color.
  - ucaetano 9y ago
    > Out of curiosity... forgetting rates for a moment and just checking on numbers of people, aren't there more white people in abject poverty than black people entirely in the USA? Yes, but that is irrelevant. Poverty rate is 9% for whites, 22% for blacks. > Seems if the argument is that white wealth propagates - that there should be few poor white people anywhere. There has been no racism towards them, and lots of time to build up the "subsidized wealth". There are fewer poor white people. The problem is that racism isn't the only factor in play here. Bad education, healthcare, etc. contribute to inequality. There are issues in play both intra and inter races. As outright racially-driven policies were revoked, whites turned to using wealth as a way to block blacks, resulting in the side effect of punishing poor whites as well. > I'm not crazy about all this generalization based on skin color. This isn't generalization. Read the redlining maps. Look at household wealth broken by race, the difference is even sharper than income: https://www.epi.org/blog/the-racial-wealth-gap-how-african-americans-have-been-shortchanged-out-of-the-materials-to-build-wealth/ https://www.epi.org/blog/the-racial-wealth-gap-how-african-a...
davidw 9y ago
> In my opinion there is a clear line from redlining, blockbusting, white flight & loan discrimination to the massive wealth gap among races we see today. Yes. See: "The Color of Law" - https://amzn.to/2JlHvRT https://amzn.to/2JlHvRT extensively well documented. It's depressing reading though.

nostromo 9y ago

Wouldn't white flight followed by re-urbanization favor people of color in terms of home value? I know in my city the neighborhood that historically had high black homeownership levels now has a million-dollar entry fee. Meanwhile the suburbs are undesirable and cheap.

illumin8 9y ago
No, because what do you think those white people fleeing to the suburbs in the 80s and 90s did? They didn't sell homes to minority homeowners because the banks wouldn't give minorities loans. They either sold to other white landlords, or became landlords themselves. So, the million dollar apartments are owned by wealthy white landlords who have realized 100% of the appreciation, while systematically pushing poorer minorities, who are almost 100% renters, out to even worse ghettos.
- nostromo 9y ago
  Home ownership by people of color did rise during white flight (and dramatically so). https://wp.zillowstatic.com/1/ThenAndNow_Race-Final-594696-1024x664.jpg https://wp.zillowstatic.com/1/ThenAndNow_Race-Final-594696-1...
40acres 9y ago
This is a tricky question for me to answer because I've been doing more research on the "back end" aka why minorities weren't getting housing as opposed to what's happening now w/ re-urbanization. Part of it is that many homes sold during the white flight and blockbusting era did not go to minorities, there were explicit causes in the sale to prevent this. Another part of this is the fact that minorities who did buy bought "on contract" which means that they did not owe a mortgage to a bank but to an individual (who most likely was a blockbuster) they did not build equity (wealth) and were subject to very harsh loans. I don't know what percentage of homes sold to minorities during this era were "on contract" so it's hard to quantify the effect. Based on an anecdote it's definitely true that some amount of minorities benefited from re-urbanization.. I was in NE Portland a few weeks ago and had a very interesting conversation w/ a local Uber driver who lamented the fact that his family had sold his grandmothers place in the 90s, this home has probably appreciated at least 3-4x since then.

flanbiscuit 9y ago

There's a good NPR podcast series that goes into this. First season is about NYC, second is about L.A. https://www.npr.org/podcasts/555340969/there-goes-the-neighborhood https://www.npr.org/podcasts/555340969/there-goes-the-neighb...

40acres 9y ago
Thanks for this. I've been really interested in learning about housing policy and trends lately & wanted to come across a podcast about it.

tropo 9y ago

The reality is that the house is sold to cover the cost of a nursing home, or that a reverse mortgage is used to convert that value into living expenses, or that the older generation dies with home equity loans that were taken out to cover expenses.

illumin8 9y ago

I've said it before, but the millennial generation will not be kind to boomers when the history books are written. Our parents have basically fucked us over in a million different ways, but especially with housing. I see a ton of boomers who have basically shredded the economy by creating multiple bubbles in the stock market and housing, destabilized the middle east and thrust us into many unwinnable wars, blown through all the home equity they had with home equity credit lines, never saved for retirement, and now expect to be taken care of by social security and medicaid during retirement. This is apparently what happens when you have a strong cultural revolution during the 60s, but everyone grows up and gets greedy. Although I'm not too optimistic the millennial generation won't do the same exact thing when they turn 40... edit: forgot to mention wars...

deleted 9y ago
[deleted]
rubicon33 9y ago
Yea, this article is really not surprising to anyone who isn't a boomer. I look around and see smart, hardworking people with some of the "best" jobs in the nation (doctors, lawyers, programmers, etc.) who can't afford to buy a home. Between student debt, the cost of living, nearly 50% taxation (and rising in CA), wage stagnation, and real estate greed... it's nearly impossible even for those young people who are doing well. If you ask me, the boomer generation certainly left it (far) worse than they found it. Thanks, boomers, for de-regulating banks, leading to financial instability that continues to this day. Thanks, boomers, for the 2007 Great Recession. Thanks, boomers, for buying up homes in 2008 at a discount, and selling it back to the next generation at an exorbitant price. Your "investment" is literally why we have a housing crisis. Thanks, boomers, for the massive mismanagement of federal, and local governments. Thanks for the wars, boomers. Thanks, boomers, for some historical wage stagnation. It's no surprise that people are struggling to afford a home, and waiting to start a family.
- Lionsion 9y ago
  > Yea, this article is really not surprising to anyone who isn't a boomer. I look around and see smart, hardworking people with some of the "best" jobs in the nation (doctors, lawyers, programmers, etc.) who can't afford to buy a home. Between student debt, the cost of living, nearly 50% taxation (and rising in CA), wage stagnation, and real estate greed... it's nearly impossible even for those young people who are doing well. If you ask me, the boomer generation certainly left it (far) worse than they found it. Is this a national problem you're seeing, or one specific to CA/NYC/etc.? I suspect it much be a local problem, since I can't see doctors, lawyers, and programmers having a hard time affording a home outside a few very specific locations.

btilly 9y ago

Theories like this one do not explain how it is that immigrant groups do reasonably well. The history of the USA is filled with people who arrive with no money, poor language skills, sometimes traumatized - and yet wind up doing well within a generation or two. https://en.wikipedia.org/wiki/List_of_ethnic_groups_in_the_United_States_by_household_income https://en.wikipedia.org/wiki/List_of_ethnic_groups_in_the_U... is a good starting point to think about. Look at groups such as Vietnamese and Cambodians. They mostly arrived in my lifetime. Everything is against them. Poor language skills, widespread PTSD from what they witnessed, no savings - pretty bad picture. And yet, look where they are today versus blacks. How did that happen?

JumpCrisscross 9y ago
> And yet, look where they are today versus blacks. How did that happen? Some might interpret this uncharitably. To defray that potential, would you mind giving us a hint as to what you've found / are suggesting?
- RussianBot 9y ago
  I didn't hear a dog whistle. I heard an actual question.
40acres 9y ago
> And yet, look where they are today versus blacks. How did that happen? Generally I don't like to compare the struggles amongst minorities in America. There is a multitude of factors that come into play when analyzing these types of things.. But when you look at the history of discrimination vs. black people in America you need to go back and consider the effects all the way back from slavery, to Reconstruction/Redemption, Jim Crow, discriminatory housing policy, discriminatory lending, discriminatory policing, discriminatory criminal "justice", disenfranchisement on multiple levels, lynching, etc. etc. etc. This is 400+ years of compounding discrimination against black people. I'm not saying the Vietnamese and Cambodians (and for good measure the Irish & the Italians) did not have it bad.. but I think we need to look at this with a broader lens.

ucaetano 9y ago

> In my opinion there is a clear line from redlining, blockbusting, white flight & loan discrimination to the massive wealth gap among races we see today Yes! And due to inheritance, wealth propagates within racial lines. White families build wealth subsidized by the government and have white kids, who have a huge advantage over non-whites due to the historical wealth accumulated. It is a self-reinforcing and self-propagating process, and now, old whites use zoning laws to extract value from younger generations, particularly non-whites and poor whites, whose families don't own real estate.

madengr 9y ago
It’s all the white mans fault!
SlowRobotAhead 9y ago
Out of curiosity... forgetting rates for a moment and just checking on numbers of people, aren't there more white people in abject poverty than black people entirely in the USA? Seems if the argument is that white wealth propagates - that there should be few poor white people anywhere. There has been no racism towards them, and lots of time to build up the "subsidized wealth". I'm not crazy about all this generalization based on skin color.
- ucaetano 9y ago
  > Out of curiosity... forgetting rates for a moment and just checking on numbers of people, aren't there more white people in abject poverty than black people entirely in the USA? Yes, but that is irrelevant. Poverty rate is 9% for whites, 22% for blacks. > Seems if the argument is that white wealth propagates - that there should be few poor white people anywhere. There has been no racism towards them, and lots of time to build up the "subsidized wealth". There are fewer poor white people. The problem is that racism isn't the only factor in play here. Bad education, healthcare, etc. contribute to inequality. There are issues in play both intra and inter races. As outright racially-driven policies were revoked, whites turned to using wealth as a way to block blacks, resulting in the side effect of punishing poor whites as well. > I'm not crazy about all this generalization based on skin color. This isn't generalization. Read the redlining maps. Look at household wealth broken by race, the difference is even sharper than income: https://www.epi.org/blog/the-racial-wealth-gap-how-african-americans-have-been-shortchanged-out-of-the-materials-to-build-wealth/ https://www.epi.org/blog/the-racial-wealth-gap-how-african-a...

davidw 9y ago

> In my opinion there is a clear line from redlining, blockbusting, white flight & loan discrimination to the massive wealth gap among races we see today. Yes. See: "The Color of Law" - https://amzn.to/2JlHvRT https://amzn.to/2JlHvRT extensively well documented. It's depressing reading though.