Blockbusting and the Challenges Faced by Black Families in Building Wealth through Housing in the Postwar United States

41 Pages Posted: 13 Jan 2023 Last revised: 9 Aug 2023

See all articles by Daniel A. Hartley

Daniel A. Hartley

Federal Reserve Bank of Chicago

Jonathan Rose

Federal Reserve Bank of Chicago

Date Written: August 4, 2023

Abstract

We study the impacts of blockbusting, i.e. large-scale racial turnover of urban neighborhoods orchestrated by realty professionals using aggressive and discriminatory practices. In large U.S. cities, we compare neighborhoods subjected to blockbusting to other similar neighborhoods mostly in the 1950s-1960s. We find that blockbusting caused substantially lower house values in 1980 and 1990. To understand the mechanisms, we analyze property-level data in one neighborhood of Baltimore, Maryland. We find that new residents that purchased their properties through blockbusters were charged higher prices and had higher foreclosure rates than new residents that purchased directly from existing property owners.

Keywords: blockbusting; wealth gap; housing finance discrimination

JEL Classification: N22; N92; G21; R23; R51

Suggested Citation

Hartley, Daniel A. and Rose, Jonathan, Blockbusting and the Challenges Faced by Black Families in Building Wealth through Housing in the Postwar United States (August 4, 2023). FRB of Chicago Working Paper No. 2023-02, Available at SSRN: https://ssrn.com/abstract=4323934 or http://dx.doi.org/10.2139/ssrn.4323934

Daniel A. Hartley (Contact Author)

Federal Reserve Bank of Chicago ( email )

230 South LaSalle Street
Chicago, IL 60604
United States

HOME PAGE: http://www.danielaaronhartley.com

Jonathan Rose

Federal Reserve Bank of Chicago ( email )

230 South LaSalle Street
Chicago, IL 60604
United States

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