Home Value Segregation Is Associated with Racial and Income Segregation

Unevenness of housing values is linked with racial and income segregation within a metropolitan region, according to Cheryl Young of Trulia. Using the Index of Dissimilarity, the Index of Proportional Distribution, and data from Census’s American Community Survey, Young created the home value segregation index that measures the share of neighborhoods, or census tracts, that contain homes with values in the lowest and highest tiers relative to the metropolitan area’s median home price. The index analyzes segregation along a 100-point scale, with more segregated metropolitan areas receiving a score closer to 100. Applying this measurement to the 100 largest metropolitan regions in the United States, the author compares the scores in 2011 and 2016 for each metro, ranking them by changes in home value segregation. Young considers the policy implications of her analysis, suggesting that identifying economic disparities could help policymakers target housing policies to address persistent economic and racial segregation.

Key findings

• Metropolitan regions that are more segregated by housing values also tend to be more segregated by household incomes and white-nonwhite residents.
• Detroit, Charleston, and New York experienced the largest increases in home value segregation index scores between 2011 and 2016. Phoenix, San Diego, and Cape Coral, Florida, experienced the largest decreases in home value segregation during this time.
• Segregation of rental and owner-occupied housing is associated with the population size of a metropolitan area. For example, more populated metros are less segregated by homes that are owned versus rented.