https://www.theatlantic.com/magazine/archive/2019/09/this-land-was-our-land/594742/
Hmmm, a tiny upper class that keeps expanding its ownership of the economy, with everyone else divided into white and non-white, and set to fighting each other because the white ones are “privileged” to get a greater share of the crumbs that the upper class leaves for everyone else… wait, are we referring to the antebellum south or what the today’s US is moving toward?
In the context of this discussion, we’re not talking about a tiny upper class and the rest of the undifferentiated lower class. In the slaveholding states in 1860, a quarter to almost half of white families owned slaves, according to the Census. http://www.civil-war.net/pages/1860_census.html
Moreover, non-slaveholding poor whites were indisputably better off than enslaved blacks.
It’s interesting to learn about how white families ended up with much more net worth than black families, on average: because black families were systematically barred from accruing wealth in many ways, and when they did accrue wealth it was sometimes stripped from them by racist individuals or racist policies. If you want to know more about this, read the 1619 Project (or many other sources).
https://aaregistry.org/story/st-augustine-florida-founded/
Free Africans just a few miles north in the 1500’s? Pretty amazing. The Spanish killed that French colony, although some people escaped. I’d like to know how and why the French had free Africans there, that must be an interesting story.
I couldn’t agree more. My parents’ Levitt house sold for three times what they paid for it after only eleven years (1966-1977). That impacted their future home purchases and put them in a position to gift us tens of thousands of dollars over the years, some in cash, some in home equity. That made it way more comfortable for me to stay home with my kids, and for us to pay off our own home many years ahead of schedule, while paying, with the help of financial aid, our children’s tuition at private colleges. Our children were able to pay off their student loans their first couple of years out of school.
My husband is a heroic provider, but he’s always been in the military or the civil service rather than private sector. A large part of the reason our family went from getting-by-nicely to oh-doG-we-were-able-to-do-this has flowed from a circumstance closed off to non-whites. I find the difference horrifying.
Cuba, the Dominican Republic, and Puerto Rico all have large Afro-Caribbean populations. Enslaved Africans were brought to the Spanish colonies to replace the enslaved indigenous people who were dying out because they had no resistance to Old World diseases… Many enslaved Africans were transported across the Atlantic in Portuguese ships and sold in Spanish colonial ports by Portuguese slave merchants because for a time Portugal had a virtual monopoly on the slave trade along the coast of West Africa. So to that extent @JHS was correct: Portugal was much more prominent than Spain in the trans-Atlantic slave trade, but the Spanish colonies were major customers.
Your parents were unusual and lucky. “Between 1890 and 2019, national housing prices grew by less than 0.6 percent per year (after accounting for inflation).” Assuming a 2% property tax rate, 1% in maintenance, and 0.6% in insurance, a home should be expected to provide a negative 3% a year real return. Unless you were a landlord, housing has historically been a terrible investment.
https://www.npr.org/sections/money/2019/04/30/718348115/is-buying-a-house-overrated
From article linked above:
Point is, when you buy a house, you get its financial upside (or downside) but you also get a place to live.
Even if you think a house is no better than forced savings… forced savings are good! It’s good to save money.
The key point in what you quoted is “when you incorporate the value of rent,” so it doesn’t disprove my point. Yes, being a landlord has historically been a decent investment, but owner occupied housing has not.
My parents did luck out. They bought the house as a place to live in and it also turned out to be a huge financial windfall. Either way, black families were shut out of the opportunity at the chance of a windfall, and from this option as a place to live.
I wouldn’t agree black families were shut out of the chance at a windfall based on housing. The best chance at a windfall would have been to live in a cheap neighborhood, which historically correlated to minority neighborhoods, and invest the savings from a lower rent or mortgage in the stock market or a business.
Correct, I should have said they were shut out of this particular opportunity. My imprecision doesn’t negate the disparity. And why should people, based on race, have to settle for cheap neighborhoods? Isn’t that the whole point – the damage that history has done?
For owner occupied housing, the “value of rent” would refer to the rent that the owner occupier does not have to pay to rent somewhere else to live.
Also, the article has a graph that indicates that the choice of time period matters.
1895-1920 => real estate did poorly
1941-1955 => real estate did well
1955-1997 => real estate was flat over the period, but with numerous ups and downs
1997-2019 => real estate did well, but with a big boom and bust
Of course, many local areas did much better or worse than the national average.
Unfortunately, too many towns and developments had covenants that prohibited African Americans, Jews, and others from purchasing a house. People couldn’t get mortgages or paid more for mortgages.
In my family there was one couple who were trying to purchase a house. They wanted to put in an offer. The owner flat our said she wasn’t going to sell to Mexicans. They bought a different house. This was in the mid 90’s.
I won’t even go into my niece’s adventures with the racist neighbor in her townhouse community. My niece is black. She wants to stay in the good school district but it makes her wary.
Housing opportunites may have improved but they are by no means good enough.
Real estate is a good investment in a boom period if you’re subsidized by someone else. In the post WWII boom period, the FHA and VA subsidized mortgages for white peoples. Black people could not buy houses in the areas where the subsidized mortgages were available.
White families were able to buy those houses with subsidized mortgages, and gain lots of equity, but black families were left behind. No one can argue with a straight face that this redlining policy benefited black people.
They did.
I get the Sunday New York Times in paper. I can’t believe I missed an entire other part of the 1619 Project, the newspaper section that goes along with the magazine section. And in this other section of the paper, the authors go through the history of Atlantic slavery. Page 5: No. 1, Slavery, Power and the Human Cost, 1455-1775.
Eyeballing the Schiller Index chart, the gains from housing since the creation of the FHA in the mid-30s (when the index was around 70) are substantial, even if you ignore the more outrageous spikes. And FHA subsidies for homebuyers were one of the things systematically denied to Black families.
Also, I wonder how the index handles location. There has to be a pretty big difference between owning a home in a place with declining population and owning a home in a place where people want to live and work. Owning a home in Scranton PA – probably a mediocre investment at best. Owning a home in Palo Alto CA, on the other hand, or Boston, or New York City . . . Over time, people have tended to move pretty strongly from one to the other. I don’t know how the index reflects that.
Well, whatever the gains or not-gains in housing, by year or locality, minorities were shut out of chances that whites had. Full stop. No other details or extrapolations will change that.
Now, you’re moving the goal post. Your original claim was that housing helped white people accumulate inter-generational wealth. The Shiller data shows overall that housing, after inflation, property taxes, maintenance, and insurance, has a negative return and spending too much on housing diminished the chances for white families to accumulate inter-generational wealth.
My original claim was that my own family benefited. Black families were barred from the same option. I expressed horror. Now you sound as though you’re invoking data to rebut a claim I never made and to dismiss my horror. “Look! If they’d been allowed to buy houses here, they would’ve LOST money!!!”
I apologize that my bringing up a housing example has led to this departure from the whole point of this thread, the amazing project itself, and the continuing need for such work. The sidetracking discussions feel like nit-picking detours that distract from the facing the appalling legacy of slavery, and from doing anything about it.