Was White Flight Good for African Americans?

The mid-twentieth century saw a significant increase in homeownership among both African Americans and whites in metropolitan areas across the United States. Overwhelmingly, whites moved to the suburbs while African Americans bought houses in central cities. In “A Silver Lining to White Flight? White Suburbanization and African–American Homeownership, 1940–1980,” a 2013 Journal of Urban Economics paper, authors Leah P. Boustan and Robert A. Margo argue the provocative hypothesis that white suburbanization was a leading cause of rising black homeownership in the mid-twentieth century. They estimate that, between 1940 and 1980, one black household became a homeowner for every 10 white households that left the central city.

Boustan and Margo explore homeownership in 98 metropolitan areas from 1940 to 1980, looking at the race, location, and ownership status of households in each area. According to the authors’ analysis, white ownership increased 29 percent over that time, with more than half of the increase attributable to suburbanization. Gains in income following World War II and the construction of highways made moving to the suburbs an attractive choice for white families. On the other hand, low incomes as well as discriminatory practices in real estate and lending barred black families from making a similar move. Suburbanization explains just seven percent of the increase in black ownership over the same time period.

The authors argue this “white flight” had an unexpected, positive consequence for African Americans. White departures decreased the demand for housing in urban areas. In turn, housing prices dropped. Suddenly, homeownership was an affordable option for African American families. Additionally, the resistance black buyers faced in gaining credit and purchasing a home weakened as whites left urban areas for the suburbs. All in all, black ownership in metropolitan areas increased 27 percentage points from 1940 to 1980.

The authors acknowledge the risk of reverse causality in their research. That is, it could also be posited that more and more black residents started to buy homes in central cities first and that prompted “white flight” to the suburbs. However, the paper isolates the impact of white suburbanization on black ownership and confirms the direction of the causality through an instrumental variable—in this case, the construction of highways.

Secondly, the authors did not discover a connection between black ownership and white suburbanization in metropolitan areas where whites were growing in population. This boosts the central claim of the paper that white suburbanization facilitated black homeownership and not the reverse. Presumably, population surges in these areas increased the demand for—and therefore the prices of—houses in both the urban core and surrounding suburbs, keeping them financially out of reach of most African Americans.

Eventually, middle class African Americans did access the suburbs, where homes were arguably more desirable and profitable. In Triumph of the City, Edward Glaeser argues that this “exodus” has “changed [cities] from being places of upward mobility to places of perpetual poverty.” To remain economically dynamic and competitive, cities like Chicago must reverse this trend and make themselves attractive places for young professionals and middle class families to live, work, and raise a family once again.

Feature Photo: cc/(Evan Leeson)