Some 9 million American families lost their homes to foreclosure during the late 2000s housing bust, driving many to economic ruin and in search of new residences. Hardest hit were black, Latino, and racially integrated neighborhoods, according to a new analysis of the crisis.
Led by demographer Dr. Matthew Hall, the researchers estimate that racial segregation grew between Latinos and whites by nearly 50 percent and between blacks and whites by about 20 percent as whites abandoned and minorities moved into areas most heavily distressed by foreclosures.
Published in the American Sociological Review, the article, “Neighborhood Foreclosures, Racial/Ethnic Transitions, and Residential Segregation,” says that the crisis spurred one of the largest migrations in U.S. history — changes that could alter the complexion of American cities for a generation or more.
“Among its many impacts, the foreclosure crisis has partly derailed progress in achieving racial integration in American cities,” said Dr. Hall, an assistant professor of policy analysis and management in Cornell University’s College of Human Ecology.
Examining virtually all urban residential foreclosures from 2005 to 2009, Dr. Hall and co-authors found that mostly black and mostly Latino neighborhoods lost homes at rates approximately three times higher than white areas, with ethnically mixed communities also deeply affected. The typical neighborhood experienced 4.5 foreclosures per 100 homes during the crisis, but the figure rises to 8.1 and 6.2 homes in predominately black and Latino areas, respectively, while white neighborhoods lost only 2.3 homes on average.
As an avalanche of foreclosures buried minority and racially mixed communities, their white populations shrank and black and Latino populations swelled. Researchers found that white households were significantly more likely to leave areas with high foreclosure rates, while black and Latino families entered these neighborhoods out of necessity or to seek newly affordable housing options.
“Not only were white households less likely to be foreclosed on, but they also were among the first to leave neighborhoods where foreclosures were high, particularly those with racially diverse residents,” said Dr. Hall.
The researchers note that racial integration slowed most sharply in western and southern cities — locations such as Atlanta, Las Vegas and Sacramento — where minority populations suffered a rash of foreclosures. By contrast, segregation in northeastern and Rust Belt cities was less affected by the crisis, likely due to relatively few foreclosures and more deeply entrenched ethnic divides.
The Public Health Impact
The past decade’s foreclosure crisis and the rise in segregation it fueled will have lasting impacts on individuals, communities, and society for years to come. Among the most devastating consequences are the likely health effects.
Described as a “fundamental cause of racial disparities in health,” residential segregation leads to poor health and health inequities through numerous pathways, such as creating differential access to transportation, quality education, medical care, and neighborhoods with low crime rates, clean air, and quality housing. These structural inequities have been linked to higher rates of chronic diseases, including hypertension, heart disease, and cancer; infectious diseases such as tuberculosis due to overcrowded housing; poor birth outcomes, including prematurity, low birthweight, and infant mortality; and injuries related to violence, including homicide.
The concentrated loss of wealth resulting from foreclosures in minority communities also has serious long-term health implications.
People of color experienced a loss in wealth of an estimated $164 to 213 billion from 2000 to 2008 – the greatest loss of wealth to communities of color in modern U.S. history. Research clearly shows that wealth is correlated with positive health outcomes, and that wealth inequality is strongly associated with poor health. Throughout the history of the United States, wealth has consistently been inequitably distributed based on race, class and place; now, through its disproportionate impact on minorities, the foreclosure crisis has only increased barriers to a more racially equitable society.