When the new subdivisions were rising everywhere here in the 1990s and early 2000s, with hundreds and hundreds of fine homes on one-acre lots carved out of the Georgia forest, the price divide between this part of De­Kalb County and the northern part wasn’t so vast.

Now, a house that looks otherwise identical in South DeKalb, on the edge of Atlanta, might sell for half what it would in North DeKalb. The difference has widened over the years of the housing boom, bust and recovery, and Wayne Early can’t explain it.

The people here make good money, he says. They have good jobs. Their homes are built of the same sturdy brick. Early, an economic development consultant and real estate agent, can identify only one obvious difference that makes property here worth so much less.

“This can’t happen by accident,” he says. “It’s too tightly correlated with race for it to be based on something else.”

The communities in South DeKalb are almost entirely African American, and they reflect a housing disparity that emerges across the Atlanta metropolitan area and the nation. According to a new Washington Post analysis, the higher a Zip code’s share of black residents in the Atlanta region, the worse its housing values have fared over the past turbulent housing cycle.

Predominantly black neighborhoods have been left out of the recovery across Atlanta In the Atlanta region, the racial makeup of a Zip code predicts how well home values have fared there. Values are down in almost all Zips where the population is at least 40 percent African American. The difference is especially stark in DeKalb County. Homes in North DeKalb Zip codes in areas with a low black population increased in value. CHANGE IN HOME VALUES, 2004 TO 2015 DeKalb County Increase in home values Decrease in home values Other metro Atlanta Zip codes BLACK POPULATION Less More Homes in South DeKalb Zip codes in areas with a high black population decreased in value. Sources: Black Knight Financial Services, Census Bureau, ESRI Predominantly black neighborhoods have been left out of the recovery across Atlanta In the Atlanta region, the racial makeup of a Zip code predicts how well home values have fared there. Values are down in almost all Zips where the population is at least 40 percent African American. The difference is especially stark in DeKalb County. Homes in North DeKalb Zip codes in areas with a low black population increased in value. DeKalb County Increase in home values CHANGE IN HOME VALUES, 2004 TO 2015 Decrease in home values Homes in South DeKalb Other metro Atlanta Zip codes Zip codes in areas with a high black population decreased in value. Less BLACK POPULATION More Sources: Black Knight Financial Services, Census Bureau, ESRI Predominantly black neighborhoods have been left out of the recovery across Atlanta In the Atlanta region, the racial makeup of a Zip code predicts how well home values have fared there. Values are down in almost all Zips where the population is at least 40 percent African American. The difference is especially stark in DeKalb County. CHANGE IN HOME VALUES, 2004 TO 2015 Homes in North DeKalb Zip codes in areas with a low black population increased in value. Increase in home values DeKalb County Decrease in home values Homes in South DeKalb Other metro Atlanta Zip codes Zip codes in areas with a high black population decreased in value. Less More BLACK POPULATION Sources: Black Knight Financial Services, Census Bureau, ESRI

Nationwide, home values in predominantly African American neighborhoods have been the least likely to recover, according to the analysis of home data from Black Knight Financial Services. Across the 300 largest U.S. metropolitan areas, homes in 4 out of 10 Zip codes where blacks are the largest population group are worth less than they were in 2004. That’s twice the rate for mostly white Zip codes across the country. Across metropolitan Atlanta, nearly 9 in 10 largely black Zip codes still have home values below that point 12 years ago.

And in South DeKalb, the collapse has been even worse. In some Zip codes, home values are still 25 percent below what they were then. Families here, who’ve lost their wealth and had their life plans scrambled, see neighborhoods in the very same county — mostly white neighborhoods — thriving.

“I don’t think it’s anything local residents did that caused that to happen,” Early says. “I think it’s all outside forces that did this.”

The region reflects the complex ways that housing and race have long been intertwined in America. Across the country, blacks are less likely to own homes; those who did were more likely during the housing bust to slip underwater; and as a result, a larger share of black wealth has been destroyed in the years since then.

Change in home value since 2004 -10% 0% +9% +18% +28% +40% Up 13.5% U.S. overall Homes in the U.S. are worth $29,698 more than in 2004. This is in the metro area.

These disparities, though, are not simply about income, about higher poverty levels among blacks, or lower-quality homes where they live, according to economists who have studied the region. The disparities exist in places, like neighborhoods in South DeKalb County, where black families make six-figure incomes.

In the middle- and upper-class subdivisions where Early was driving one winter day, there’s little visible blight. But there also isn’t a for-sale sign in sight. People who would like to sell well-kept homes don’t believe they’ll be able to, which, in a market struggling to recover, means that other people won’t be able to sell, either.

Touring the neighborhood, Early pulls into Southland, a subdivision popular with black professionals before the bust, and parks in front of a five-

bedroom home in whitewashed brick that backs onto a golf course. In 2005, it sold for $440,900. Most recently, last June, it sold for $290,000.

He pulls up to another home — $70,000 in wealth lost. And another — $100,000 just vanished.

He parks in the driveway of a spacious red-brick home with blue shutters and two maple trees out front. David Sands and his family paid $269,000 for it in 2005. The last time he tried to refinance it, he was told it was worth $189,000.

“It just does not make sense,” says Sands, a retired Air Force information manager with two grown children, sitting in his living room with Early. The two men co-chair a housing committee for the local community improvement association that is researching what’s wrong with housing values. “You’ve got doctors, lawyers, teachers, all kinds of professional people, retired military like myself, who’ve done everything right — everything right — and it never seems to work out in our favor,” Sands says. “We’re not talking about people who got fraudulent loans, who didn’t have jobs to pay for them.”

There’s something fundamentally unfair about that, he and Early believe, about all the African Americans here who got the education, to get the job, to buy the home, to create the wealth, to sustain their families — only to fall behind anyway.

“Some people are going to have issues,” Sands says. They miss the good interest rates, or have the misfortune of living near a foreclosured home, or they bear the brunt of a change in lending policy. Of his black neighbors, Sands says: “We are always ‘some people.’ ”

‘The facts are clear’



A brick entrance wall marks the border of an Ellenwood, Ga., subdivision that was never built. A Washington Post analysis found that the higher a Zip code’s share of black residents in the Atlanta region, the worse its housing values have fared over the past turbulent housing cycle. (Kevin D. Liles for The Washington Post)

In the catalogue of ways African Americans have been hurt by the housing market, going back through history, Early says this feels like the newest affront: While home values are rising elsewhere in the recovery, something appears to be holding them back here.

“We can all guess exactly why it’s race, and we can have theories, but the facts are clear,” says John O’Callaghan, president of the Atlanta Neighborhood Development Partnership. “Values in South Metro Atlanta, particularly in African American neighborhoods, are coming back very, very slowly. And it’s going to be a long time before we get these neighborhoods back to where they were.”

The explanation isn’t simply about race itself — a house isn’t worth less because a black family owns it — but also about all the inequities that have been correlated with race over time. Black homeowners and predominantly black communities who had been barred from earlier generations of lending — victims of discrimination and government policy — were particularly likely to be targeted for predatory loans during the bubble, according to both academic research and federal lawsuits that the Justice Department brought against banks.

About the series A bubble sent home values soaring in many U.S. cities. Their crash pulled the country into recession. After an uneven recovery, what kinds of neighborhoods are better off, or worse? These stories map the winners and losers of this tumultuous era. Overview

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Even well-off African Americans, like the ones in some South DeKalb subdivisions, were more likely to be given subprime loans when they should have qualified for better ones. Nationwide, black families earning around $230,000 a year, according to research by sociologist Jacob Fa­ber, were more likely at the height of the bubble in 2006 to be given a subprime loan than white families making about $32,000. The problem, Faber argued, wasn’t that professional blacks didn’t understand that they qualified for better loans; they were targeted for bad loans. Subprime lenders viewed them, Faber argued, as particularly profitable targets.

Longtime homeowners in South DeKalb say they are now being punished for their Zip codes. All these recent problems — the predatory lending, the foreclosures, the abandoned development — occurred around them. And that past still tugs at their property values, no matter how much work they do to maintain their homes.

The Stonecrest shopping mall that was supposed to galvanize development in South DeKalb was never completed. The Southland subdivision was a hot spot for mortgage fraud by house flippers who bought cheap foreclosed properties and then sold them at inflated prices to straw buyers, pocketing the difference and leaving the homes to fall into foreclosure again.

In Atlanta and its suburbs, along with dozens of other cities, the National Fair Housing Alliance has also documented that banks have done a poorer job maintaining foreclosed properties in largely minority communities than in white ones.

Dan Immergluck, a professor at Georgia Tech, suggests that the area’s problems are a result of “cumulative causation” — all of these forces building upon each other. Controlling for poverty rates and the age and type of housing, his research shows Atlanta area Zip codes with larger black populations were more likely to suffer a steep decline in home values and experience little recovery.

A racial divide in DeKalb County’s housing recovery Home values in largely African American neighborhoods of DeKalb County outside Atlanta still lag far behind where they were a dozen years ago. Home values in white neighborhoods have fared much better. Zips with less than one-third black population Zips with more than two-thirds black population Other DeKalb Zip codes CHANGE IN HOME VALUES SINCE 2004 Increase in home values 2004 2015 Decrease in home values Atlanta metro average Sources: Black Knight Financial Services, Census Bureau, ESRI A racial divide in DeKalb County’s housing recovery Home values in largely African American neighborhoods of DeKalb County outside Atlanta still lag far behind where they were a dozen years ago. Home values in white neighborhoods have fared much better. Zips with less than one-third black population Zips with more than two-thirds black population Other DeKalb Zip codes CHANGE IN HOME VALUES SINCE 2004 30030 +38.4% Increase in home values Atlanta metro average -0.6% 2004 2015 Decrease in home values 30035 and 30088 -26% Sources: Black Knight Financial Services, Census Bureau, ESRI A racial divide in DeKalb County’s housing recovery Home values in largely African American neighborhoods of DeKalb County outside Atlanta still lag far behind where they were a dozen years ago. Home values in white neighborhoods have fared much better. Zips with less than one-third black population Other DeKalb Zip codes Zips with more than two-thirds black population CHANGE IN HOME VALUES SINCE 2004 30030 +38.4% Increase in home values Atlanta metro average -0.6% 2004 2015 Decrease in home values 30035 and 30088 -26% Sources: Black Knight Financial Services, Census Bureau, ESRI

In neighborhoods such as these in South DeKalb, a struggling housing market takes on a life of its own: As home values fall, so do property tax dollars that fund schools and public services. As the quality of those services declines, a community becomes less desirable, further yanking down property values.

Then it becomes impossible to sell. When most of the transactions in a housing market are distressed sales and investor purchases, there are few clean “comparable” sales homeowners can use to justify the value of their houses. Then homeowners who can’t sell don’t create the comps the next round of homeowners needs to sell. Predominantly black neighborhoods additionally struggle from a smaller pool of demand, because non-black home buyers are less likely to look for housing there.

What’s happening in these neighborhoods isn’t entirely explained by the size of the bubble they experienced or the severity of the bust. Elora Raymond, a PhD candidate working with Immergluck and a graduate research assistant at the Federal Reserve Bank of Atlanta, has looked more closely at the relationship between race and negative equity, which occurs when homeowners owe more on their homes than they’re worth.

Throughout the South and in metropolitan Atlanta in particular, places with lingering negative equity are in predominantly black Zip codes, Raymond found. When she controlled for income levels and measures of housing quality, race still mattered. When she controlled for the severity of the earlier subprime and foreclosure crises, race still mattered. When she added controls for how far prices tumbled during the bust, she got the most surprising result: Race mattered even more.

Black neighborhoods nationwide have struggled the most The racial disparities in Atlanta are a stark reflection of a national trend: Predominantly black Zip codes are twice as likely as white Zip codes to have lost home value since 2004. In Zip codes where the largest share of the population is... Hispanic White Black 38% 40% Increase in home values 30% above avg. 22% 19% avg. 15% 20% 14% 14% below avg. Decrease in home values 20% 27% 41% had a decrease Note: Data is for Zip codes in the 300 largest metro areas. Sources: Black Knight Financial Services, Census Bureau, ESRI Black neighborhoods nationwide have struggled the most The racial disparities in Atlanta are a stark reflection of a national trend: Predominantly black Zip codes are twice as likely as white Zip codes to have lost home value between 2004 and 2015. In Zip codes where the largest share of the population is... Decrease in home values Increase in home values below avg. avg. above avg. Black 41% had a decrease 14% 15% 30% Hispanic 27% 14% 19% 40% White 20% 20% 22% 38% Note: Data is for Zip codes in the 300 largest metro areas. Sources: Black Knight Financial Services, Census Bureau, ESRI Black neighborhoods nationwide have struggled the most The racial disparities in Atlanta are a stark reflection of a national trend: Predominantly black Zip codes are twice as likely as white Zip codes to have lost home value between 2004 and 2015. In Zip codes where the largest share of the population is... Decrease in home values Increase in home values below avg. avg. above avg. Black 41% had a decrease 14% 15% 30% Hispanic 27% 14% 19% 40% White 20% 20% 22% 38% Note: Data is for Zip codes in the 300 largest metro areas. Sources: Black Knight Financial Services, Census Bureau, ESRI

These neighborhoods aren’t struggling the most today, in other words, simply because they had the steepest price drops in the late 2000s. Comparable white neighborhoods that fell as far have still come back faster.

“That says, ‘Wow, we really need to look into the recovery,’ ” Raymond says. “This isn’t a story anymore about the crash. This is a story about what happened afterward, or what didn’t happen.”

The recovery, as Early believes, appears to be uniquely disadvantaging black communities, and in ways that aren’t true, according to Raymond’s data, for the region’s Hispanics.

“If the recovery is happening in a way that really widens the gap in black-white housing wealth, this is going to be a problem,” Raymond says. “This is going to be a problem for generations.”

‘I’ve waited long enough’



David Sands, left, and Wayne Early co-chair a housing committee for the local community improvement association that is researching what’s wrong with housing values. “It just does not make sense,” says Sands of neighborhoods where home values are still falling. (Kevin D. Liles for The Washington Post)

Tracey Williams bought her home for the pond out back that reflects the neighbors’ lit windows at dusk. Her subdivision was once an old dairy farm, and the scene from her deck still feels quiet, as if she owns a small piece of the country. After she bought the home in 2002, her mother planted six small Leyland cypress shrubs along the side of the property. In the years it has taken the trees to grow taller than the house, Williams has gotten no closer to getting any equity out of it, since the house has lost value faster than she’s paid down the loan.

The modest three-bedroom home, about a 15-minute drive from where David Sands lives in South DeKalb, cost $154,000 in 2002. For 13 years, Williams, an instructional coach in the Atlanta public school system, has made every payment on it. Two years ago, she started adding an extra $100 each month toward the principal.

Last year, when she tried to refinance her loan at a lower interest rate, she was told the house was worth $89,000. And then she learned from her mother, who lives nearby, that Wayne Early was collecting appraisals and stories to document what looks to everyone like evidence of an unfair system.

On his list now: The grandmother who had to move back from Louisiana when the sale of her home fell through because the appraisal came in low. And the retired couple who gave up and moved to Panama because they were tired of fighting their low home value. And the family in Lavonia that can’t refinance. And the man who’s still living in the custom house he built in 2002, when he meant to stay just five years.

Williams’s story is this: Today she owes $114,000, a sum the bank said was too high relative to the appraised value to qualify for a refinancing.





LEFT: A mural in Atlanta depicts Rep. John Lewis (D-Ga.). A hero of the civil rights movement, he represents a district where African American homeowners have not shared in the market’s recovery. RIGHT: Darryl Josey jogs in the River Vista Estates subdivision in Ellenwood, Ga., at dusk in February. During the subprime lending boom, high-earning blacks were more likely to pushed into such loans than whites making much less. (Kevin D. Liles for The Washington Post)

This is how plummeting values undermine even homeowners who aren’t trying to sell. Williams, 45, is financially cautious. When she moved in, she used rabbit ears on the TV because she didn’t want to pay for cable.

The aging refrigerator is the one that was in the house the day she bought it. Only recently did she buy herself a new couch. She has a credit score of 811.

But she’s barred from lowering her mortgage payments, as many other homeowners can — interest rates are about half what they were in 2002 — because the value of her home keeps slipping away. And so she’s paying for the disparities in the market twice: with the lost value of her home, and the higher cost she pays to own something that’s not worth much after all.

“You think the longer you stay in the home, the closer you are to paying it off, and the value goes up,” she says. “I had no idea I would be in the predicament I’m in. Because I’d never seen it happen.”

Like Early and Sands, she looks around and worries about a wider trend.

“I hate it, but it comes down to race,” Williams says.

Williams and her neighbors say it’s that reason — the housing market’s long history of racial bias — that makes it hard to do what homeowners usually do when times are tough: Wait.

“I think I’ve waited long enough,” Sands says. “We shouldn’t have to wait for anything. We’re doing everything we’re supposed to do. What are we waiting for?”

Ted Mellnik in Washington contributed to this report.