ABSTRACT
Housing equity is an important component of the wealth portfolio of most American families. Especially for minorities, particularly African Americans, advances in accumulating wealth depend heavily on housing wealth. Home equity is the most important reservoir of wealth for average American families, and disproportionately for African Americans. For Black households, home equity accounts for 63% of total average net worth. In sharp contrast, home equity represents only 38.5% of average white net worth (Oliver and Shapiro 2006, Shapiro 2004). However, given the lower rate of homeownership among African Americans and the “segregation” tax that Black homeowners face, their homes appreciate far slower in segregated and racially changing neighborhoods (Flippen 2004; Krivo and Kaufman 2004; Oliver and Shapiro 2006). Th is chapter examines how segregation has limited the ability of African Americans to accumulate wealth and the ways in which government and fi nancial institutions have conspired to limit and even “strip” hard-gained home equity from Black and other minority communities. Because wealth is historically constituted-that is, it is passed from generation to generation-the processes of wealth accumulation that have produced cumulative disadvantages for African Americans and locked in positions for whites, have led to the current situation where Blacks possess just 7 cents for every dollar of net worth that whites possess (Kochar 2004; Oliver and Shapiro 2006).
