A Realtor’s View: The Dash Divided
I have to start by confessing my own ignorance. For someone who considers herself an ally to people of color and a cheerleader for their prosperity and success, I’ve willfully been blind to this topic of segregation in our city. Maybe not in a general sense – It isn’t hard to look around my neighborhood and notice that pretty much everyone else is white too. And I knew from attending City Church in the Boston Thurmond neighborhood, a church passionate about racial and social justice in our city, that most people in that neighborhood don’t look like me. In the 4 years I was part of City Church, I learned and stretched and was challenged quite a bit about the state of race in Winston-Salem and our country. I would consider myself to be pretty well in-tune and educated on the topic… for a white girl at least.
But my willful ignorance has been more specifically related to real estate and its role in this problem. Being a Realtor, it’s hard to take a look in the mirror and see how my own industry has perpetuated segregation. Largely because it’s an overwhelming problem that is decades old and what on earth is little ole me supposed to do about it?
On a national level, real estate has always been at the center of segregation. And though the creation of Fair Housing and HUD were supposed to lift up and protect those in low income areas, primarily people of color, the decentralization of its implementation from the federal to the local level, an effort lead by the Nixon administration, has insured a struggle to be effective. Much of the rehabilitation and new construction through HUD was put into the hands of private investors, which means profits became the primary goal.
Fast forward 50 years and the ugly consequences of racial disparity rears its head once more in the market crash of the early 2000s. Subprime mortgage loans were the key to the demise of the real estate market at the beginning of the 21st century, and black Americans had a 50% higher likelihood of being offered a subprime mortgage in comparison to white Americans. That predatory lending practice meant that black wealth, which was already a bleak 1/8th of white wealth in 2007, plummeted to 1/11th of white wealth by 2013. (For more on the history of Fair Housing, HUD, and the market crisis in relation to race, you can read the article used for my research here: https://www.dissentmagazine.org/article/how-real-estate-segregated-america-fair-housing-act-race)
While all of this happened across the country, Winston-Salem has had its own marked history and unique contributions to segregation. A segregation ordinance regarding who could live on certain sections of certain streets was passed in our city in 1912 and thankfully overturned by the NC Supreme Court 2 years later. It happened again in 1930, this time with a zoning ordinance that created racial districts, dictating who was permitted to live in said zones. That ordinance stayed on the books for a decade until it was overturned in 1940. These instances of red lining created a disruption in wealth growth at home and across the nation. Black families were restricted from moving to other areas of town for the fear that it would decrease property values. All it did was stagnate economic progress for the black community. Later, the construction of Hwy 52 meant the destruction of the flourishing black owned businesses and many black neighborhoods that stood in its path. A black community that was thriving independently of the white community across town was suddenly devastated and people of color were once again left behind.
Though many today would think that these problems are of the past, that is a lense of privilege. In truth, there are plenty of driving forces, especially connected to real estate, that continue to hinder upward mobility and increased diversity throughout our city (and nationally for that matter). For one, there is the subject of education. Schools are not equal. Disproportionate funding means disproportionate quality of education, and so the cycle continues decade after decade. Students living in school zones that are underfunded are handicapped in upward mobility from day one. While Forsyth County does have some level of school choice and parents can apply for their children to attend a different school in their zone, that does not help the very families who need it most, because they rely on bus transportation for their kids to get to school. Applying for a different school means the bus is no longer an option. Well can’t they just move so they are assigned to a better school? Likely not, because that would mean increased rent or mortgage.
I also had an inkling that housing value and appreciation is not equal. Luckily, I have the local MLS database at my disposal, so I did some digging. First, I studied a demographic map to determine which locations I would pin point. Let’s take zip code 27104, where I live. This zip code contains neighborhoods such as Old Sherwood and Buena Vista, many of the neighborhoods being at least 93% white. Two decades ago in 1999, the median sales price in 27104 was $154,950. Jump to last year, the median sales price was $231,500. That’s 49.4% appreciation over 19 years.
Now let’s hop over to zip code 27105, where I used to attend church in the Boston Thurmond neighborhood which is 86.2% black. In 1999, the median sales price in 27105 was $78,950. Last year, it was $89,000. That’s only an appreciation of 12.7%. Those numbers don’t lie. But what do they mean? Why the stark difference?
We’ve already discussed the school system piece, which is no doubt a factor. In addition, I would venture to say that time and money for home maintenance is a luxury in low income areas. At my house, if we have a leak, we call a plumber. We also have adequate insurance when the unexpected happens. But again, that is a privilege afforded to me. For those forced into a cycle of financial hardship by political and social road blocks throughout the history of our country, the generational wealth growth and/or stability that has been afforded to people like me has not been a reality for them. For those with a lack of savings, working minimum wage, and choosing between prescription medications or school supplies, calling a plumber is pretty low on the priority list. This difference does not mean that only wealthy people take pride in their home or know how to manage finances, it means they have a privilege to do so. For those not afforded that privilege, it means that home maintenance and repairs are delayed which only harms property value.
The above also makes the assumption that families own their homes, but there is certainly a higher concentration of rental properties in lower income areas. Some would argue that renters in general do not take ownership of their home, and therefore do not care for it as well. There may be truth to that. But it is also true that landlords/investors do not make the same maintenance or improvement decisions for their rental properties as they do for their own homes across town.
And finally, I regret that the structure of the real estate industry only perpetuates the stark segregation we see in our city. As agents, a significant portion, if not the majority, of our business comes from people we know. Our neighbors, family, friends, classmates, church members. And pretty much all of those relationships are determined by location. I grew up in 27104, I went to church in 27104, my grandparents lived in 27104, and now I own a home in 27104. Now, I have friends and family all over this city, but the roots of those relationships started in proximity. Though my husband and I make a conscience effort to be in community with people who don’t look like us, still the vast majority of my relationships are with other white people. And based on my observation, this is true of most ethnicities. So if real estate agents form most work connections through existing relationships, and most of those relationships are due to proximity, it’s no wonder that these geographical lines of race have persisted for so long.
Not only is it a problem of networking, but also pay structure. Realtors earn income via commission. That means, I only make money if I have a closing. And how much money I make is determined by the sales price of that home. Now let me be clear, as a Realtor, it is my job to help all people, any people achieve their goal of homeownership, and I find great satisfaction in that. I don’t sell luxury homes and I don’t make tons of money, and I’m fine with that. My primary goal is to serve the best interest of my clients. And I believe the majority of Realtors share that same perspective. However, when agents are business planning and deciding which neighborhoods to target for marketing and farming practices, they are making strategic decisions about what will be the most fruitful and efficient use of their time and resources. That by nature means that agents are investing more time in locations that are already thriving, leaving behind those that aren’t.
And, while of course there are laws and ethical codes today against steering clients, many agents are likely still doing it without realizing. Agents sometimes think they are being helpful, strategic, or more efficient by making assumptions about a client’s preferences, while all it truly does is perpetuate biases and segregative practices. We must always be careful to LISTEN to our clients and let them make their own decisions about where they choose to call home.
I can confidently say that those I work for and with on a daily basis, whether at my company or not, have been some of the most kind, hospitable, welcoming people I’ve had the pleasure to know. I don’t look at agents or managers or lenders in particular and think, “There’s a culprit.” But I do feel that all of us have a greater responsibility to know about this problem and our industry’s historical role. We see ourselves as advisors and helpers in making the American Dream possible. As champions of encouraging financial well-being and prosperity. How can we make sure that prosperity is a real opportunity for all people and all zip codes?
For real estate agents in particular, we need more diversity training. We need to be taught the history of our industry because it paints a clearer picture and will make us more aware moving forward in our business practices. We need more minority representation in our field of work – colleagues who get it and can challenge the privilege of us white colleagues when necessary. As agents, we also need to be better informed about programs and resources that exist to encourage upward mobility. In my research for this post, I came across several local programs that I had no clue existed. If I as a Realtor did not know of these options, how is the general public supposed to know? We Realtors also tend to be pretty vocal about support for our local economy and businesses and giving back to our community. We must be intentional to include minority owned businesses in that dialogue. We need to be leaders of investing IN all of our local community, WITH all of our community.
Realtors and the rest of our city have a responsibility to lift each other up. Even if the real estate industry does see major change, that alone will not solve this problem. Across this city there has to be action. We need to invest in education. We must vote for officials who understand this problem. We need to teach financial literary to adults and youth alike. We need to fight for the city to prioritize capital improvements in low income areas. We must support local businesses so those communities can thrive. Winston-Salem has a history as two cities, but we can have a future as one.
The following were used as resources for the writing of this blog:
https://www.dissentmagazine.org/article/how-real-estate-segregated-america-fair-housing-act-race
https://statisticalatlas.com/place/North-Carolina/Winston-Salem/Race-and-Ethnicity