Racial and ethnic inequality in housing wealth: A multi-level approach

That blacks and Hispanics continue to trail whites in wealth, despite significant advances in socioeconomic attainment and decades of anti-discrimination legislation, represents a serious challenge to equal opportunity and a large source of inequality in well-being. Housing wealth is arguably the most important form of assets, comprising the largest share of wealth for most families and providing an important source of wealth generation via appreciation. Understanding why minorities average lower homeownership and housing equity than whites with comparable levels of human capital and financial resources is thus a critical issue for stratification research.;My dissertation departs from previous analyses of housing inequality in several ways. First I take a multi-level approach, combining household data from the Health and Retirement Study with neighborhood and metropolitan data from the US Census. Second, I examine housing inequality in a multi-ethnic framework, considering Hispanics in addition to blacks and whites. And finally, I concentrate on the pre-retirement population, which has direct implications for quality of life among the elderly and for wealth transmission across generations.;Results demonstrate the negative impact of an important by-product of discrimination, residential segregation, on minority housing. I show that tastes and preferences do not contribute to inequality in housing assets, strongly suggesting the importance of discrimination in undermining minority housing. Subsequently, I show that segregation negatively affects minority housing consumption, depressing both homeownership and housing quality. And finally, I document the negative effect of segregation on the investment aspect of housing. I show that homes in neighborhoods with large or growing minority populations experience lower appreciation than comparable homes in stable and white neighborhoods. Moreover, minority concentration continues to undermine appreciation even after socioeconomic differences across neighborhoods are accounted for.;Thus discrimination creates a vicious circle in which minorities are confined to segregated communities with high rates of poverty and poor housing conditions. This engenders supply restrictions detrimental to homeownership and undermines housing appreciation. The resulting inequality in housing wealth detracts from minority well-being and hinders other forms of wealth accumulation. That Hispanic housing is also adversely affected by segregation raises serious concerns for the prospects of Hispanic assimilation.