Racial Segregation in Housing Markets and the Erosion of Black Wealth

Prottoy Akbar, Sijie Li Hickly, Allison Shertzer and Randall P. Walsh
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Sijie Li Hickly: Freddie Mac
Allison Shertzer: Federal Reserve Bank of Philadelphia
Randall P. Walsh: University of Pittsburgh and NBER

The Review of Economics and Statistics, 2025, vol. 107, issue 1, 42-54

Abstract: This paper studies how the expansion of segregated neighborhoods eroded black wealth in prewar American cities. Using a novel sample of matched addresses, we find that over a single decade rental prices soared by roughly 50% on city blocks that transitioned from all white to majority black. Meanwhile, pioneering black families paid a 28% premium to buy a home on a majority white block, after which their homes lost 10% of their value. These findings strongly suggest that segregated housing markets cost black families much of the gains associated with moving north during the Great Migration.

Date: 2025
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https://doi.org/10.1162/rest_a_01276
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Working Paper: Racial Segregation in Housing Markets and the Erosion of Black Wealth (2019)
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