Week 5: Differential Access to Homeownership and the Creation of the Ghetto

(On Massey and Denton's American Apartheid Ch1-3
Shapiro's "Race, Homeownership and Wealth"
and Shapiro and Oliver's "Sub-prime as a Black Catastrophe")

Massey, Denton, Shapiro, and Oliver illustrate racial inequality, and the resulting wealth gap and poverty, with specific focus on African Americans in the context of homeownership. In American Apartheid Massey and Denton introduce the concept of 'segregation' as a concept that has disappeared in theory but one that still exists in practice. The authors provide information on homeownership and the extent of its influence. One-third of African Americans all live in a single urban area, out of 16. Many neighborhoods are so racially homogenous that there is no interracial contact. Such disassociation makes these racially segregated ethnic groups blind to other cultures and perhaps a better ways of life. They are unaware of what they deserve or how to work the system to satisfy their needs. They are merely helpless victims of the institutionalized racism and discrimination. The chapters of American Apartheid once again prove that poverty isn't necessarily, or maybe never, solely the fault of those in poverty.

The article by Shapiro and Oliver was on the economic crisis of "sub-prime mortgage meltdown" (A9), which made African Americans suffer from an increasingly widening racial-wealth gap. Basically, sub-prime mortgage crisis made it more difficult for people to borrow money, hence buying a house became evermore impossible for those who cannot afford it. Shapiro and Oliver calls this crisis a "Black Catastrophe." Although African Americans today have a better chance of joining the upward mobility and to accumulate wealth, the legacies of historical racial segregation and limitations are still keeping them poor, especially in the current crisis. In addition, "changes in the mortgage market [...] were not racially neutral," argues Shapiro and Oliver (A10). The writers maintain that sub-prime loans were racially targeted at the African American community. Honestly I don't understand their reasoning because I have very little understanding of this whole financial crisis, so hopefully the in-class discussions will clarify this.

Two years before writing the article discussed above, Shapiro wrote "Race, Homeownership, and Wealth" to highlight the importance of homeownership as a way of "closing the racial wealth gap" (p1). It seems that Shapiro had a much hopeful outlook as he observes that "increasing black homeownership and rising home values are optimistic signs of closing the racial wealth gap" (p6). Shapiro's later disappointment might explain how the article about the financial crisis holds a relatively narrow view. He has a stance that seems to believe that all odds are working against African Americans. On the other hand, in the "Race, Homeownership, and Wealth" he has a broader understanding. In the first new paragraph on page 8, Shapiro explains that racial pricing disparities "did not result from discriminatory lending practices." I should probably know the consequences of the sub-prime mortage crisis better to understand why and how Shapiro's perspective changed (if it did) and whether or not the resultant argument is credible. As of now, the "Black Catastrophe" article does not convince me.