Racial Segregation in Housing Markets and the Erosion of Black Wealth Prottoy A. Akbar Sijie Li Allison Shertzer Randall P. Walsh NBER Working Paper No. 25805

Issued in May 2019, Revised in January 2020

NBER Program(s):Development of the American Economy

Housing is the most important asset for the vast majority of American households and a key driver of racial disparities in wealth. This paper studies how residential segregation by race eroded black wealth in prewar urban areas. Using a novel sample of matched addresses from prewar American cities, we find that over a single decade rental prices soared by roughly 50 percent on city blocks that transitioned from all white to majority black. Meanwhile, pioneering black families paid a 28 percent premium to buy a home on a majority white block. These homes then lost 10 percent of their original value as the block became majority black. These findings strongly suggest that segregated housing markets cost black families much of the gains associated with migrating to the North. You may purchase this paper on-line in .pdf format from SSRN.com ($5) for electronic delivery. Access to NBER Papers You are eligible for a free download if you are a subscriber, a corporate associate of the NBER, a journalist, an employee of the U.S. federal government with a ".GOV" domain name, or a resident of nearly any developing country or transition economy. If you usually get free papers at work/university but do not at home, you can either connect to your work VPN or proxy (if any) or elect to have a link to the paper emailed to your work email address below. The email address must be connected to a subscribing college, university, or other subscribing institution. Gmail and other free email addresses will not have access. E-mail:

Acknowledgments Machine-readable bibliographic record - MARC, RIS, BibTeX Document Object Identifier (DOI): 10.3386/w25805