Why do middle-class blacks have far less wealth than whites at the same income level? The answer is in real estate and history.

By Thomas J. Sugrue

A few years ago, I met Roosevelt Smith. He still owned my parents’ old house on Detroit’s West Side, which was a rental property by then, and he gave me a tour. It was in good shape—pretty much the same house that my parents sold, but with newly refinished floors and some new kitchen cabinets and tiles and the garage out back. He’s a resourceful guy who bought a second, larger house nearby—another asset, a nest egg for the future. But together, the two houses aren’t worth much. The median listing price for homes in Detroit is now just $21,000, or about the cost of a Chevy Malibu—and, like the car, likely to depreciate in value from the moment you buy it. Detroit’s population has fallen from 1.85 million in 1950 to a little more than 700,000 today, and as population falls housing demand falls with it. Today, nearly every block has abandoned homes on it. The Smiths probably have more in household assets than the $4,955 median for black families, but not a lot.
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