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White People Are Far More Likely to Get a Loan and Own a Home in Los Angeles

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In the 1920s, real estate agents could have their licenses revoked for integrating the then-white neighborhood of Compton. Restrictive housing covenants barred black people (and Jews, Asians, and Latinos) from buying homes in many neighborhoods; by 1940 "80% of property in Chicago and Los Angeles carried restrictive covenants barring black families," according to the Fair Housing Center of Greater Boston.

In the 1930s, President Roosevelt formed the Homeowners' Loan Corporation, which hired real estate agents to create "safety maps" of good and bad neighborhoods; good neighborhoods were generally white and considered safe for lending; bad neighborhoods had Jewish or Mexican or black or Chinese residents and housing loans there were treated as bad bets (this became known as "redlining"). Meanwhile, white homeowners did their part "to 'scare off' prospective black home buyers, including vandalism, cross burnings, bombings, and death threats," according to a paper by Josh Sides, a history professor at CSU Northridge. The mechanisms may be more obscure, but the legacy of that discrimination is still very much alive today.

White applicants in Los Angeles are far more likely to get a home loan than black and Latino applicants and white homeownership rates are a full 25 percent above black homeownership rates, according to data just out from Zillow.

In Los Angeles, 11.5 percent of white home loan applicants are denied, 17.5 percent of Latinos are denied, and black applicants are denied in 21.6 percent of cases. Income is a major factor in loan denials; in Los Angeles, white people make an average of $44,929 a year, while Latinos make less than half that and African-Americans make $31,603. Predictably, homeownership rates among African-Americans and Latinos drags behind the rates for whites and Asians; 58.3 percent of white people own houses in LA, according to US Census data, while just 32.9 percent of black people do, and 37.7 percent of Latinos.

The trends are consistent nationwide; Zillow found that the gulf between white and black homeownership across the US is as wide now as it was in 1900, just a few years into Jim Crow.

Meanwhile, housing values are severely depressed for the black and Latino people who have managed to buy in LA: "Home values in both black and Hispanic communities in the Los Angeles area remain more than 20 percent below their pre-recession peaks, while homes in L.A.'s Asian communities have appreciated beyond those peaks and homes in white neighborhoods are almost at peak levels," according to a press release from Zillow.

The income data comes from the Social Science Research Council's report A Portrait of California 2014-15, which examined life expectancies, incomes, and educational achievement to calculate a Human Development Index score for each neighborhood; LA has the largest gaps between neighborhoods and South LA and Watts scored the lowest out of every place in California. The report found that the residents of several black and Latino neighborhoods in South LA "have health, education, and earnings levels on par with or below the average for the United States in 1970." Low wages; low housing values; less opportunity to buy, build equity, and create stability. The methods change, but the results stay the same.
· Black Applicants More Than Twice as Likely as Whites to be Denied Home Loans [Zillow]
· A Black & White Story, Unchanged for 115 Years [Zillow]
· Los Angeles is the Most Unequal Place in California [Curbed LA]