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The Racial Dynamics of U.S. Neighborhoods and Their Housing Prices from 1950 Through 1990

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Abstract

We characterize the dynamics of neighborhood racial composition by using the k-medians machine learning technique to group neighborhoods into five different patterns according to the evolution of the Black population share of census tracts from 1950 through 1990. The procedure classifies tracts into groups that: always have a high Black population share, always have a low Black population share, have a steep increase in the Black population share from 1950-1960, or 1960-1970, and those that have a gradual increase in the Black population share from 1950-1990. We calculate the growth in median rents and home values in each to the five groups and find that those with steep increases in the Black population share show the smallest increases in home values and rent implying that Black households that bought homes in these neighborhoods in 1950 or 1960 were likely to have lost money or barely broken even by 1990.

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  • Daniel Hartley & Jonathan D. Rose & Becky Schneirov, 2024. "The Racial Dynamics of U.S. Neighborhoods and Their Housing Prices from 1950 Through 1990," Working Paper Series WP 2024-22, Federal Reserve Bank of Chicago.
    • Handle: RePEc:fip:fedhwp:99309
    DOI: 10.21033/wp-2024-22
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    Keywords

    blockbusting; neighborhood dynamics; Housing prices; cluster analysis; wealth-gap;
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    JEL classification:

    • C38 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Classification Methdos; Cluster Analysis; Principal Components; Factor Analysis
    • N22 - Economic History - - Financial Markets and Institutions - - - U.S.; Canada: 1913-
    • N92 - Economic History - - Regional and Urban History - - - U.S.; Canada: 1913-
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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