Racial Disparities in Property Ownership

This capstone project covers the racial disparities in property ownership in the U.S. specifically

Published by


September 19, 2022

Inquiry-driven, this project may reflect personal views, aiming to enrich problem-related discourse.

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This paper explores the historically overlooked and currently persisting issue of racial disparities in homeownership rates in the United States. While many remain dubious or unconscious about the roots of the 30-point gap in homeownership between Black and White Americans, the various discriminatory real estate strategies unveiled as well as the racial notions in the 20th century American society point towards the thought that disparities in housing is an issue truly driven by race. This paper examines the history of housing segregation as well as the modern day stances to suggest the importance of strengthened real estate regulations and law enforcement.


For a significant majority of the history of the United States, homeownership has been a key player for many working households in achieving the ‘American Dream,’ or the attainment of socioeconomic success through the fair provision of job opportunities. Even today, owning a house is considered a part of the ‘American Dream’ by over 87% of consumers (Yun, 2016). As a result of people’s continued demand for housing in the United States, new houses have been built towards the most benefitting aspects for consumers. In fact, over 3.4 million new houses were constructed just between 2015 and 2019 (Statista, 2020), and today, organizers of new and increasingly more expensive communities advertise aspects such as an advantageous educational zoning, low crime rates of the surrounding area, or nearby convenience centers to appeal to possible clients.

However, what is often overlooked by such high-end designs of houses and the general American society is the basic necessity of owning a house. Aside from a house’s standing as a clear badge of the ‘American Dream’ or a steady investment to make monetary benefits over time, housing is quintessential in keeping someone safe and providing them with basic needs for survival. Despite the aspects of convenience advertised by many designers, owning a house is not only an aspiration or a dream for the American people, but is rather a requirement that should be fulfilled under the full support of the federal and local governments. Nevertheless in the current status quo, equal housing for all Americans is not a goal to be achieved in the near future–rather, the path towards homeownership is one that is still stained by unwritten methods of racial segregation. As of 2020, the gap in homeownership rates between from federal and local governments, homeownership rates seem to be one of the aspects in American society where racial gaps have not been closed, but rather widened over time.

Literature Review

Historians and generational victims of discriminatory housing explain that the roots of housing segregation have been laid in the industry ever since the rise of demands for houses in the United States through suburbanization and urban sprawl. As White Americans have been the majority buyers of houses throughout the 20th century, planners and brokers of real estate properties made efforts to match their interests, which included racially segregating notions. Various strategies were taken by real estate agencies to promote white-majority or white-only communities in the most profitable areas of housing during the 20th century. One major practice was redlining, which is when people of certain races were denied housing services by their real estate agents. Black American majority communities were marked with red lines on a map to be low-profit areas which served as reminders for the real estate service providers not to assist anyone residing within the set boundaries. Redlining proved later to be a major setback in increasing Black homeownership rates as many Black American families in the United States during the 20th century had been barricaded not only from housing opportunities, but also programs that assisted American citizens’ housing that were created for the New Deal.

Moreover, local governments during the time also implemented the exclusionary zoning policy, in which racial minorities were denied from moving into any mid-to-high class neighborhoods, as it had been deemed necessary to maintaining property values by fulfilling the interests of wealthy White American families who often showed patterns of ‘White Flight,’ or the act of migrating away from a racially diversifying area. Asides from redlining and exclusionary zoning, covenants, which were restrictions that were first told to entail race-neutral features such as lot sizes, were also later manipulated to make sure that the covenant-implied houses were inaccessible to Black American families. Covenants were majorly applied to cities such as Chicago, which is an area that still shows the clear historical footprints left by racially discriminatory practices conducted in the past.

While the issue of homeownership disparities have persisted through various methods, the federal government started discussing and taking action on reducing the inequitable gaps between majority and minority races starting in the mid-to-late 20th century. In addressing a solution to reducing the disparities, the 1968 Fair Housing Act was signed to highlight the illegality of housing segregation based on any discriminatory factors. The passing of the Fair Housing Act took a step in reducing legally established discriminatory housing practices, which has since driven real estate agencies to take the alternative of similarly segregating yet under-the-table methods to earn maximum profit. Despite the unexpected results that the 1968 Fair Housing Act brought, activists support the idea that the laws set a constitutional boundary that deems racial discrimination in housing encounters as unlawful in any form. To supplement the Fair Housing Act of 1968, the United States Department of Housing and Urban Development (often referred to as HUD) were also in effect to emphasize and reinforce the illegality of housing discrimination that the act had established.


While clear efforts have been taken to reduce racially driven property ownership, the current support provided by the HUD does not prove to be enough for solidifying the positions of all minority races who are discriminated against in the housing process, and especially not enough for many Black American families across the United States. In fact, even today, real estate agencies use tactics that are often unknown to the Black American victims to trap them into malicious contracts and leaving more enticing housing opportunities for majority races. One such strategy is called racial steering, where brokers limit the quality of service they provide to clients of certain races without mentioning the disadvantages the minority clients are at.

Many agencies in the United States are also known for driving Black American families of lower socioeconomic statuses into further poverty by applying mortgages and loan deals far more costly than for other clients, and the often unknowing victims have no other choice but to accept such terms. While some try to shift the focus of the root of all aforementioned disparities from racial issues to socioeconomic ones, it is clear that many 20th-century United States real estate agencies, as well as today’s agents commonly took advantage of Black American families through holes in law enforcement, likely contributing to their comparatively lower rates of owning property in the modern American society.

Although the 1968 Fair Housing Act did clearly establish the illegality of housing discrimination, the following actions by the federal government to reinforce and make sure the law is being strictly followed to achieve its expected goal has been called out to not be enough by many activists and current victims. What the current stance of the HUD and the federal government fails to have an impact on are the local real estate agencies; since real estate agencies do not require federal regulation while many state regulations on real estate agents are very light, it is extremely probable for agencies to manipulate its clients based on race. In order for race-based roots to disappear in the housing industry, it is crucial for the federal government to consider policies that will induce solidified regulations on real estate agencies.


Though it is true that the HUD’s involvement in regulating real estate transactions has not been enough to drive out racial discrimination in the housing process, its existence as a federal agency of the United States is enough for further regulating efforts to be encouraged.

Along with the existence of the agency, the Fair Housing Act, as mentioned before, stands as a precedent in proving racially motivated housing practices as unconstitutional, which provides for clear reasoning behind the validity of any possible actions taken by the government to enforce the 1968 laws.

The United States government can also find associates for the cause of real estate regulation in the REALTOR organization, which is the national organization for real estate agents that further emphasize the ethics of providing their services. The National Fair Housing Alliance (NFHA) is also an organization that should be considered in the case that the federal government takes interest in enforcing the Fair Housing Act, since the group already runs an online-based program on supporting minority race citizens who may be uneducated on real estate or victims to racially manipulative strategies.

In association with non-governmental organizations like REALTOR and the NFHA, or even taking motive of their structuring, the federal government can start pursuing methods to reduce the disparities between majority and minority races.

Some compare the importance of houses to the requirement of food for humans to survive–after all, when the “basic needs” of a human being are mentioned, they most often entail food, shelter, and clothing. With the aspect of “shelter” missing, countless American families will continue to suffer, which indeed makes it necessary for federal and local governments to make efforts in eliminating racism from the real estate industry.


MLA: Kim, Yoon. “Racial Disparities in Property Ownership.” Institute for Youth in Policy, Institute for Youth in Policy, 20 Sept. 2022, https://cite.yipinstitute.org/qbu72w0

APA: Kim, Y. (2022, September 20). Racial Disparities in Property Ownership. Institute for Youth in Policy. Retrieved [Insert Today's Date] from https://cite.yipinstitute.org/qbu72w0


The Institute for Youth in Policy wishes to acknowledge Marielle DeVos, Paul Kramer, Riya Kataria, Lilly Kurtz, and other contributers for developing and maintaining the Programming Department within the Institute.

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Yoon Kim

Policy Analyst

Yoon (Brian) Kim is a Public Health policy analyst at the Institute for Youth in Policy. He is a two-time participant in the YIP fellowship program, and prior to joining the public health team, he wrote for various nonprofit organizations and journals on historical and sociological topics.

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