Mark Calabria at Cato points to an NBER working paper that finds the gap between white and black home ownership narrowed considerably between 1870 and 1910:
In 1870 the gap between white and African-American homeownership rates stood at an astonishing 48.8 percent. As mentioned, this gap in 2007 was 22.5%, representing a 26.3 percentage point decline. However, of that 26.3 narrowing, 25.3 occurred before 1910. That is correct, almost all of the decline in the racial homeownership gap occurred before we had any national policies targeting said gap. Given all the massive resources that have been devoted to pushing homeownership, it is somewhat surprising that these policies have made almost no difference in the racial homeownership gap.
That Calabria finds the 48.8 percent gap which existed in 1870 "astonishing" is pretty laughable. In 1870, this country was a mere five years removed from the end of the Civil War. Blacks had just stopped being property (well, sort of). What's astonishing about the fact that many hadn't yet made the leap to owning property?
It stands to reason that the racial homeownership gap narrowed so quickly between 1870 and 1910 because many former slaves understood the value of land ownership and acted accordingly. But Calabria, unsurprisingly, uses the fact that black homeownership hasn't improved much since 1910 as an argument against government policies designed to rectify the disparity; he claims that such policies made "no difference." But what he fails to mention is that many government programs enacted prior to the 1977 Community Reinvestment Act -- like the GI bill, which helped create the white middle class -- in fact limited black access to homeownership.
It should go without saying, but laws passed with an aim to decrease the racial homeownership gap are primarily about making up for lost ground. In addition to racist government policies, decades of policies like redlining -- a practice where private companies decided where blacks could live and the kinds of loans they could receive -- had a cooling effect on the growth of black homeownership. Ignoring that is dishonest.
-- Shani O. Hilton
