Great Recession foreclosures fueled racial segregation, study finds

The widespread home foreclosures that devastated families at the height of the Great Recession also exacerbated racial segregation in communities across the United States, according to a new study.

From 2005 to 2009, segregation between Latinos and whites grew by almost 50 percent, and segregation between blacks and whites grew by about 20 percent as a result of families moving into or abandoning areas hit hard by home repossession, researchers estimated.

The gap was fueled by white families leaving homes in racially and ethnically integrated neighborhoods hit hard by foreclosures while blacks and Latinos moved into those neighborhoods, seeking affordable housing, according to the report, “Neighborhood Foreclosures, Racial/Ethnic Transitions and Residential Segregation.”

“Among its many impacts, the foreclosure crisis has partly derailed progress in achieving racial integration in American cities,” said the demographer who led the study, Matthew Hall, an assistant professor of policy and management at Cornell’s College of Human Ecology.

The exact cause of the white exodus from integrated neighborhoods and the destination of those residents remained uncertain in the findings.

It is unclear whether “white population loss from diverse neighborhoods is due to white foreclosed households moving to whiter neighborhoods or to other white households living in these [integrated] neighborhoods fleeing in the face of growing neighborhood distress,” the report says.

The report also found that black and Latino families were more heavily burdened by the housing crisis than their white neighbors. Foreclosures were reportedly much more likely among nonwhite households than among white ones. Foreclosure rates were, overall, three times as high in predominantly black and Latino neighborhoods as in predominantly white neighborhoods.

According to the report, white families tended to be “better able than black and Latino families to shield themselves from the social and economic distress often accompanying high concentrations of foreclosure.” 

The Cornell study, set to appear in The American Sociological Review in June, combed through demographic data from nearly all home foreclosures in the U.S. from 2005 to 2009.

About 9 million U.S. families lost their homes during the housing crisis.