http://www.psmag.com/business-economics/geography-is-budget-destiny-a-tale-of-two-cities-50695/
On Wed, Jan 16, 2013 at 12:52 PM, c b <cb31450 at gmail.com> wrote:
> A House Divided
>
> 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
>
>
> In 1973, my parents sold their modest house on Detroit’s West Side to
> Roosevelt Smith, a Vietnam War veteran and an assembly-line worker at
> Ford, and his wife, Virginia (not their real names). For the
> Smiths—African Americans and native Mississippians—the neighborhood
> was an appealing place to raise their two young children, and the
> price was within their means: $17,500. The neighborhood’s
> three-bedroom colonials and Tudors, mostly built between the mid-1920s
> and the late ’40s, were well maintained, the streets quiet and lined
> with stately trees. Nearby was a movie theater, a good grocery store,
> a local department store, and a decent shopping district. Like many
> first-time home buyers, the Smiths had every reason to expect that
> their house would be an appreciating investment.
>
> For their part, my parents moved to a rapidly growing suburb that
> would soon be incorporated as Farmington Hills. Their new house, on a
> quiet, curvilinear street, was a significant step up from the Detroit
> place. It had four bedrooms, a two-car attached garage, and a large
> yard. It cost them $43,000. Within a few years, they had added a
> family room and expanded the small rear patio. Their subdivision, like
> most in Farmington Hills, was carefully zoned. The public schools were
> modern and well funded, with substantial revenues from the town’s
> mostly middle- and upper-middle-class taxpayers. All of the creature
> comforts of the good suburban life were close at hand: shopping malls,
> swim clubs, movie theaters, good restaurants.
>
> My parents lived in the Farmington house for a little over twenty
> years. When my father retired in the mid-1990s, the property had
> appreciated by about $100,000. They did not get rich from the proceeds
> of their home sale—indeed, after adjusting for inflation, the house
> was worth slightly less than they paid for it, not even counting
> interest costs and taxes. But it nonetheless allowed them to walk away
> with about $80,000.
>
> For the Smiths it was a far different story. Detroit had been losing
> population since the 1950s, and especially after the 1967 riots there
> was massive “white flight” from the city. The neighborhood in which
> the Smiths invested went from mostly white to black within a few
> years, along with the rest of Detroit. For the city as a whole, those
> who remained were not as well off on average as those who left,
> meaning that even as the tax base shrank, the demand for city services
> went up, setting off a vicious death spiral. Soon, schools and
> infrastructure groaned with age, and the city’s tax base shrank
> further as businesses relocated to suburban office parks and shopping
> centers. By the end of the ’70s, the decline of the auto industry and
> manufacturing generally compounded Detroit’s woes, as production
> shifted to Japan or the South in search of cheaper labor and fewer
> regulations.
>
> For the rest:
> http://www.washingtonmonthly.com/magazine/january_february_2013/features/a_house_divided042051.php
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