Black Land Loss

and

The Racial Wealth Gap

The accrual of wealth over ones adult life in to give a better life to one's children and family is the cornerstone of what is sold as the American dream, as a large family net worth is not simply the finish line, it is also the starting point for the next generation. Those that have wealth accrue it easier in the future.

The sad reality of American history is one that has actively denied the ability of Black families to generate and pass on wealth of their own.

(Denotes 1 Generation)

A History of White Supremacy

The timeline of exploitation and the foundations for a head start in building wealth for white people at the expense of Black slaves begins when the first African slaves were brought to North America. For hundreds of years, white families were able to build generational wealth off the backs of slaves, who were denied ownership of private property let alone freedom.

This history is not as distant as we think, as Ronald Reagan and Harriet Tubman were actually alive at the same time. She was 89 when he was born.

Generations of trauma from chattel slavery are not erased in just a few decades, especially when following decades are also steeped in trauma.

One of the major ways of building generational wealth is by accumulating capital, and since the Indigenous were driven off of communally managed land, private ownership of land was one way of building equity, as this land appreciates in value over time.

In 1900 the average value of agricultural land and buildings was $20. 100 years later it was $1050/acre, a 52x increase.

The Homestead Act

Before Black people were allowed to own land, a US government initiative to settle land east of the Mississippi that had been forcefully cleared of Indigenous peoples through the 1830 Indian Removal Act gave away 10% of the land that is now the United States.

White families were the prime benefactors of the Homestead Act, with over 1.6 million white families receiving land for free over the 123 years the Homestead Act was in effect, compared to just 6,000 Black families.

Today, nearly 25% of the US population are descendants of Homestead Act recipients.

Federal Housing Administration

In 1934 the Federal government began a program designed to increase and segregate America's housing stock. Government language in the Underwriting Manual of the FHA explicitly said "incompatible racial groups should not be permitted to live in the same communities".

Integrated communities were deemed a financial risk and were ineligible to receive home loans. Between 1934 and 1962 the federal government backed 120 billion dollars worth of home loans. More than 98% went to white families.

350,000 new homes were built with federal support in northern California between 1946 and 1960, fewer than 100 went to Black families.

Destruction of Black Neighborhoods

The Underwriting Manual of the FHA also recommended that highways were an effective measure to segregate Black communities from white ones, resulting in many prospering Black communities to be demolished and displaced in order to build highways.

The West End or "Kenyon-Barr" in Cincinnati was a mostly Black neighborhood of 25,0000 people in the 1950's. The area has since been entirely depopulated.

2008 Financial Crash

Black homeownership grew from the 1940's to 1968, but the gap in home ownership between Black and white families never got any smaller. Black families continued to make gains in home ownership until the financial crash of 2008.

While the Federal Reserve bailed out financial instruments, no relief was provided to homeowners, which for Black homeowning families, was their primary source of wealth. In 2005, before the housing crisis, the median net worth of Black households was $12,124, compared to white households who have a median net worth of $134,992.12

By 2009, the net worth of Black households had fallen to $5,677, and the median net worth of White families had only dropped to $113,149.

Coronavirus Eviction Crisis

Because of low homeownership, nearly 60% of Black households are rentals (the highest of any racial demographic), meaning they are especially vulnerable to eviction during any kind of adverse financial event.

The CARES Act covered 70% of single-family mortgages, but less than 30% of the rental housing market.
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Ina review of residential eviction filings from 2018 through 2019 in Philadelphia, two in three eviction cases were against Black tenants, although they make up less than half the city's renters. When eviction moratoriums are lifted, this trend is likely to resume and worsen.

(Denotes 1 Generation)

Reparations

We have a bill to pay to Black people. For slavery and the economy built upon it, which built a base of wealth and power that has only grown over time. For redlining and evictions and all the equity lost. For police brutality, mass incarceration, and a disproportionate burden from Covid-19.

The bill could go on so long that it is nearly impossible to imagine it's end. The fact that many of these atrocities happened generations ago does not excuse them, especially when every single generation has added to the bill.

20 generations of oppression is 20 generations too many.