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The devaluing of black property has led to the devaluing of black lives

Andre Perry on how lenders and home appraisers contributed to this moment in the fight against racism.

A man wearing a cap and mask stands inside of a black owned business in Crown Heights Brooklyn .
Open storefront displaying a “Black Owned Business” sign in Crown Heights in Brooklyn.
Erik McGregor/LightRocket/Getty Images

Black communities, long denied the opportunity to own property, now stand at the center of a national debate about the destruction of property.

Following the police killings of several unarmed black people, retailers from Minnesota to Atlanta have been looted, smashed, and burned down during otherwise peaceful protests, drawing accusations ranging from foreign interference to radical antifa takeovers. Yet while the origins of this theft and destruction have fueled much speculation, the urban riots in the 1960s show that it is not without precedent for people who are dispossessed to dispossess others.

More recently, popular African American culture has wrestled with these difficulties of living in segregated neighborhoods where people own neither property nor businesses.

This is Jay-Z appealing to young black drug dealers on “The Story of O.J.”: “Please don’t die over the neighborhood that your mama rentin’.” On “Nas Album Done,” Nas bemoans the fact that unlike in wealthier whiter neighborhoods, where generational transfers are common, “In the hood, shit ain’t passed down through blood.”

Far beyond rap songs, the painful reality of living as a black person in the American economy was televised in the killing of George Floyd — a commercial interaction that ended in homicide. The danger of being a second-class shopper, the inability to own a home, the hurdles to starting businesses, and the setbacks in garnering wealth are all tied together.

“The same attitude that would lead an officer to kneel in the back of the neck of someone under their custody, under their supposed care, are the same attitudes harbored by bank lenders, real estate agents, appraisers,” Andre M. Perry, a fellow in the Metropolitan Policy Program at the Brookings Institution, told me.

To chat through the way these long-running inequities impact America’s civil unrest — and to explain some policy prescriptions for how we can see our way out — I spoke with Perry, who’s also a scholar-in-residence at American University and the author of Know Your Price: Valuing Black Lives and Property in America’s Black Cities. A lightly edited transcript of our conversation follows.

Aaron Ross Coleman

To start, I was looking through your book last night. And one of the things that I thought was interesting was where you wrote that “black communities’ economic and community development goals have always been tied to our civil rights, for good reason.” And I was just wondering how you were thinking about that idea at this moment.

Andre Perry

Oh, at this moment, it’s become clear it’s impossible to separate social justice from economic justice. There’s nothing that says a black person doesn’t belong in an economy like having a police officer kill a person in the middle of the street in broad daylight.

The police are supposed to protect and serve. When you look at the rate in which black people are killed — more than two and a half, or approximately two and a half times what their percentage in the population would suggest — it’s not surprising to learn that the black families earn [just over] half as much as their white peers. It’s not surprising to see that black homeownership [in Minneapolis] is 46 percent compared to white homeownership with 79 percent. The point is that the social justice issues we face are inextricably linked to the economic system that we work and live in.

The same attitude that would lead an officer to kneel in the back of the neck of someone under their custody, under their supposed care, are the same attitudes harbored by bank lenders, real estate agents, appraisers. It’s the same attitude that corporate execs have. So for us to address these systemic issues, we’re going to have to deal with structural racism that undergirds so many different sectors in our lives.

Aaron Ross Coleman

Right, one of the things that you mention there is the fact that most black people do not own a home. I know you also write about how, for black people who do own homes, many of their assets are undervalued. I was wondering how you’re thinking about the relationship between property and people who don’t own property at this moment.

Andre Perry

You know, for so long in the country, who owns land controlled so much of our political system. Landowners feel the privilege to dictate policy. There’s also a sense of entitlement that this is their community. This is, “I get to dictate what I want to do in this community based on the fact that I own land, own property.”

Blacks have been systematically denied housing and discouraged to have housing for generations. Going back to the 1930s, when black-majority cities were redlined, deemed unworthy of investment. That same feeling that blacks are too risky has led to lending practices that would not have blacks become homeowners. And the heirloom of redlining is still with us today. A lot of my studies examine the housing crisis in black-majority communities and compare them to housing prices in majority-white communities.

We found that after controlling for education, crime, walkability, and many other metrics you might find on Zillow, homes in black neighborhoods are devalued by 23 percent. About $48,000 per home, about $156 billion in lost equity. Now, that’s the money people use to start businesses and to send their kids to college. In fact, that would have paid for more than 4 million black-owned businesses, based on the average startup costs that blacks had to start businesses. They would have funded more than 8 million four-year degrees at a public institution. It’s the money that people use to uplift themselves.

So throughout history, black people have been denied housing opportunities and have been subjected to predatory lending and other unsavory practices that have really disenfranchised them. And so when these police incidents occur, a lot of this frustration comes from not having an ability to influence policy. And a lot of that starts with a lack of homeownership.

Aaron Ross Coleman

I was wondering if you could speak to the devaluation of black businesses as well. I know you did a report looking at that.

Andre Perry

The devaluation goes beyond housing. We also did a study examining businesses in black communities. To get a sense of the quality, we scraped Yelp data from all businesses and compared those in black-majority communities and in white-majority spaces. We found a similar finding: Businesses owned by people of color in black-majority neighborhoods actually scored higher on Yelp, but received less revenue because of the neighborhood’s perception. People will bypass quality in black neighborhoods simply because it’s the black neighborhood.

Now, our elders used to have the thing that says our ice is just as cold. And they knew that if you don’t reward quality in the neighborhood, you distort the market in a way that suppresses economic mobility in it. Those revenues that should be going to the neighborhood are lost because of racism. More importantly, there’s an overarching loss in investment in black neighborhoods because of housing, because of a lack of business investment there. Municipalities seem to mirror that lack of investment. You don’t see regular garbage pickup and proper lighting and beautification in areas that are black majority.

What I try to do, though, is say, “Hey, these assets are not broken. They are underinvested in. They are devalued.” Just like the homes in black neighborhoods are valued more than they are priced, so are our black lives. We are devalued, but in actuality, our value is high.

The goal of my research is 1) to point out the assets we should be investing in, and then 2) to pinpoint where devaluation is happening so we can eradicate the drag of racism on the market.

Aaron Ross Coleman

How does that work? How do we correct the pricing on black life and property?

Andre Perry

Well, obviously you can’t wave a magic policy wand at housing prices and raise them automatically, because it would price people out of being able to purchase a property. People living in devalued areas, a lot of them are renters. If we increase the price of homes, they wouldn’t be able to afford to purchase the home. Housing prices would spike, and folks would be priced out.

So the goal is to invest in people first, meaning to provide low-interest home loans to people whose parents did not own a home. And that way, you can get at this wealth issue. You know, we should be providing homeowners who live in devalued areas with microloans so they can make up for the loss in the discretionary funding to help fix up their property. Also in business — and this is something that’s pressing right now — we’ve got to figure out a way to make sure the PPP [Paycheck Protection Program] loans that went to white businesses but neglected to get to 95 percent of black businesses, we’ve got to figure out a way to provide direct relief to black-owned businesses and financial institutions that are more likely to work with black-owned business.

Aaron Ross Coleman

I did want to ask you about a historical precedent. You write in your book about the 1967 riots that happened in Detroit following the police raid. You wrote, “Black Detroiters set the city ablaze, proclaiming that their lives matter.” I was wondering if you see any parallels today and how are you thinking about, you know, the property damage that’s been happening during the civil unrest.

Andre Perry

As long as black lives matter less than the property that they are surrounded by, you never provide incentives not to burn something down. So when people say, “Don’t burn down the goods, businesses, services in your local neighborhood.” They’re missing the point of why people are protesting. The very fact that you have to say that means that they — the property, the goods, the services, the businesses — are so undervalued that the people around them are not respected.

What good is a business if you can get killed en route to that firm or service?

So it’s sad, it is absolutely sad, but it is a reality that black people aren’t heard until something is burning down. If you really want to stop the burning, we need to create programs and services and investment and build black people up.

Aaron Ross Coleman

I was also curious if you’ve been following the kind of discourse that’s been happening around the destruction of black-owned businesses. I know it’s been a common point of discussion for mayors, from Minnesota to Atlanta. Do you have any thoughts on that?

Andre Perry

You know, again, I think when it comes to looting and protests when it gets to that point, you got to ask the deeper question: Why? Nobody wants to see businesses burn, scorched, destroyed. No one. So the question is, “Why are people willing to burn something down?”

And that’s where my devaluation research comes into play. It’s that if people aren’t respected, you are not giving them a reason to not burn it down. When property is valued more than people, you’re not giving folks a reason not to burn it down.

And so the goal is to respect people. And you respect people by restoring the value that’s been extracted by racism. So I guarantee you [that] if we said, “You know what? In black communities, we’re going to make sure that residents and renters are going to get low-interest mortgage loans to buy property in the area. We’re going to give entrepreneurs low-interest business loans so they can help deal with Covid and start new businesses.” It would be less likely there would be burning. But instead, when you say in response, “I’m going to jail you,” you’re really incentivizing a protest.