Racial segregation, redlining in Louisville neighborhoods still hurts Black home buyers today

In 2020, we had a robust conversation, nationally and locally, around racial justice issues. Many of us in the real estate profession learned for the first time how private industry partnered with the federal government to segregate our city and to discriminate against would-be Black home buyers.

It started with zoning regulations that segregated Black and white citizens into particular neighborhoods. Then came racial deed restrictions or covenants that were baked into properties or entire subdivisions, prohibiting anyone other than white people from living there. Then came redlining, where the federal government hired local real estate professionals to determine which neighborhoods were “safe” for investment (predominantly white ones) and which were not (predominantly Black ones). Then came the GI Bill, where white veterans could get home loans with low down payments while Black veterans mostly could not. Finally, when government discrimination, zoning regulations and racial deed restrictions were declared illegal, sellers and real estate agents used a practice of “steering,” whereby they led Black people to poor neighborhoods.

Moving to Louisville: I have discovered the average home value tells a racist story

All of these unconstitutional and undemocratic actions had lasting effects on neighborhoods and people, and were largely responsible for the disparities of wealth we see today between Black and white families in Louisville and around the nation. Today, households with a Black resident make up 13.6% of all households but hold only 4.7% of all wealth. And the median wealth of households with Black residents is $24,520, compared to $250,400 for households with white residents. The majority of Americans create generational wealth through equity they build in their home, not from stocks and bonds. Keeping Black people out of homeownership opportunities also kept them out of wealth building, and that resonates today.

The real estate market is on the rise, but Black homeownership is on the decline

Now that Spring is here, the homebuying market is starting to pick up again. Because we’ve had a great rise in property values and a great decline in available homes since the pandemic, the market is more competitive than ever. And that means that people with wealth will win most contract bidding wars. Indeed, because of these conditions—along with higher interest rates—new purchases by Black homeowners dropped by 50% between 2021-2022. Once again, it’s a challenge for marginalized people to buy homes. But there’s one group in Louisville working hard every day to help Black people become homeowners.

Feldkamp: Segregation was intentional – and it didn't end when Jim Crow did.

The National Association of Real Estate Brokers, which operates in Louisville and in major cities around the nation, was established in 1947 because the national real estate board would not allow African Americans to use the name “realtor.” Calling themselves “Realtists,” they set out to educate, inspire and help Black people figure out how to become homeowners in a system with roadblocks at every turn. Today, members of NAREB work to “increase Black homeownership, improve Black neighborhoods, and increase social and economic conditions for Black people.”

If you’re going to buy or sell a house this season, consider hiring a NAREB Realtist (who, since 1962 are also called Realtors) to help you. NAREB’s members also include loan officers, home inspectors and title companies. The racial causes and effects we became acutely aware of in 2020 are still present today, even though our attentions have moved elsewhere. Hiring a NAREB member to help buy or sell a home and get a mortgage means investing in an organization that works every day to inspire and educate people of all races to build wealth and improve their lives through homeownership. It’s time we worked to reverse the harm done to Black families by discriminatory housing practices.

John D. Borders, Jr. is a real estate attorney with Borders & Borders, PLC and serves on the board of directors for the Louisville Urban League and on the forms committee of the Greater Louisville Association of Realtors.

This article originally appeared on Louisville Courier Journal: Louisville neighborhoods still plagued by segregation, zoning laws