Evaluation of Dual Inequality in Mortgage Lending Discrimination for People of Color: a national study of large US metropolitan areas

Keywords: Housing Discrimination, Inequality, Urban Geography, Blacks, Hispanics
Session Type: Virtual Paper Abstract
Day: Friday
Session Start / End Time: 2/25/2022 05:20 PM (Eastern Time (US & Canada)) - 2/25/2022 06:40 PM (Eastern Time (US & Canada))
Room: Virtual 56

Abstract

Housing discrimination continues to affect access to quality housing for specific population groups in the United States. In our previous study, the nature of discriminatory housing practices has been examined through different lenses, specifically by race, ethnicity, and place. When race-/ethnicity-based bias is jointly examined with place-based bias (redlining), we recognized that a dual inequality may exist for people of color in terms of acquiring a mortgage. This study aims to: (1) quantify the choice set of places (tracts) within 100 top MSAs where Blacks or Hispanics want to reside and get an approved mortgage; (2) compare the home ownership rates for Blacks or Hispanics within the areas with both low racial/ethnicity bias and low redlining vs. the other areas; (3) identify the clusters where Blacks or Hispanics could have a better chance to secure housing mortgages for selected MSAs. In the worst scenario, only 1.5% and 3% of all the tracts are available for Blacks and Hispanics to experience no mortgage lending discrimination of any forms. The average home ownership rates for Blacks residing in areas with less-than-one racial bias and redlining is 2% higher than the other areas. The number for Hispanics is 4.7%. In summary, Black or Hispanic applicants may have more difficulties in getting a loan for home purchase because they are more likely to be denied to buying either a property outside of a city due to their race/ethnicity or a property within the central city due to the unattractiveness of the property’s location.