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INEQUALITY AT HOME

THE AMERICAN DREAM IS ROOTED IN HOME AND COMMUNITY. For many, home symbolizes stability and physical security; for others it signifies an investment, an identity, or a crucial mark of citizenship. A community can provide friends and neighbors, safety, parks, good schools, and a sense of belonging. Whether secured through renting, owning, or the generosity of others, home and community represent the bedrock of a family’s future.

Yet not every home and community offer all of these advantages, and not everyone takes the same path home. The dream of securing a foothold of one’s own can play out in vastly different ways based on race and economic circumstances. In recent years, buying a home has become more difficult. In the United States the age of first-time home buyers is about thirty-three; in the 1970s new home owners were four years younger. In 2014, the share of first-time buyers fell to its lowest point in nearly three decades: one-third of all sales. Rising rents, huge student debt burdens, limited job prospects, and flat wage growth all make putting money aside for a down payment an exceedingly problematic proposition for young adults in our post-Recession, toxic inequality era.¹

Both wealth and race matter. Nearly 70 percent of first-time buyers were white in 2015; 9 percent were black, 14 percent were Hispanic, and 7 percent were Asian; 26 percent had received a gift or loan from parents, a relative, or a friend to make the down payment. I am convinced the actual numbers are even higher. In our interviews, nearly every home owner, whether black or white, told us how important family financial help was in pulling together down payments and being able to afford homes in the desired community. In this area, family interviews uncover critical information that broader surveys miss or vastly underreport—perhaps due to the deep tradition in American culture of seeing accomplishment as earned or deserved and thus denying that help was necessary. Even so, Zillow analysts estimated that nearly a quarter of all buyers with moderate incomes in 2014 (between $32,250 and $54,500) received financial assistance from family members. Whites received family financial assistance in home purchases more than twice as often as blacks.²

The high cost of home ownership is just one of the many reasons underlying the stratification of secure housing in a strong community. Becoming a home owner requires a stable income and wealth, especially as the home-price-to-income ratio has widened in recent decades. In the early 1970s a typical home cost 1.7 years of median income; by the early 2010s it cost the equivalent of 2.6 years of income. It takes wealth to become a home owner, and housing wealth in turn forms the largest financial asset for the middle 60 percent of families; home equity represents two-thirds of their wealth. The adage “wealth begets wealth” is institutionally rooted in neighborhoods and housing markets for middle-class families.³

The resulting financial and social gains from home ownership are vastly distorted. Toxic inequality is created, magnified, and reproduced partly through the structures through which we seek homes in neighborhoods highly segregated by income, wealth, and race, which in turn confer inequitable opportunities and financial rewards. Only some neighborhoods offer access to good schools, low violent crime rates, parks and green spaces, and quality employment opportunities and services. Home equity generally rises in these communities, particularly in high-socioeconomic-status neighborhoods. In contrast, other communities have weak or failing schools and high crime rates and are physically isolated from service and employment centers. If home values rise at all in these neighborhoods, the appreciation is considerably lower. This pattern of spatial inequality is highly racialized.⁴

Disparities in neighborhood opportunity—public school quality, crime rate, home value appreciation, access to public spaces, availability of quality employment—create divergent living contexts. Families residing in high-opportunity neighborhoods benefit from heightened prospects and well-being. In contrast, families residing in low-opportunity neighborhoods with weaker schools, limited education, low-wage employment, higher crime rates, and fewer public spaces have constrained prospects and diminished well-being. The physical structure is an important component in shaping a home’s value, but neighborhood characteristics are also critical. Low community wealth and weak opportunity infrastructures like schools tend to further suppress already low housing appreciation. Meanwhile, high community wealth and strong opportunities and services are more desirable and translate into higher home prices and house appreciation.⁵

Neighborhood is the pivotal context for home. A neighborhood’s opportunity quality varies considerably by both its economic and racial composition and its institutions. Those who own homes in affluent communities rich with institutions and opportunities consolidate their advantages and get ahead, whereas home owners or renters in low-opportunity or unstable neighborhoods, often due to the legacies of residential segregation, are at a serious disadvantage.⁶

Toxic inequality also means that communities in decline continue to decline while communities on the rise continue to rise, creating further and starker economic and social separation. The combination of housing patterns, a shrinking property tax base, and predominantly low-income and minority residents usually means great effort and inspiration are required to turn a community’s fortunes around. Poor communities get worse and worse, while rich communities get harder and harder to break into. As communities diverge and the distance between high- and low-opportunity areas widens, inequality hardens.

FAMILY STORIES PROVIDE ONE WAY TO SHED LIGHT ON THE importance and multiple meanings of home; how families plan for mobility and build wealth through their decisions about where to live; and how neighborhoods increasingly divided by wealth and race parcel out opportunities to some and challenges to others, resulting in further inequality. Consider the unusual story of Rachel and Shawn Andrews, a professional, middle-class black family with the resources to live in a secure and opportunity-rich neighborhood. Their situation illustrates a specific dilemma many black middle-class families face: move to a more prosperous but largely white community or stay in a lower-opportunity neighborhood and negotiate weak schools, high crime, and poor services while attempting to improve community life for all. The Andrewses’ decision to take the latter course dramatizes the trenchant effects that neighborhood location and community wealth can have on family fortunes. Reaching for the American dream in what seems like a paradoxical manner, the Andrewses built their home, and their lives, in a devastated, largely neglected community. Their journey to a secure home in an insecure neighborhood reveals both what a truly exceptional family can accomplish and the constraints of toxic inequality.

A line from Achmat Dangor’s Kafka’s Curse reverberates in Rachel’s homestead: “It struck me that our history is contained in the homes we live in, that we are shaped by the ability of these simple structures to resist being defiled.”⁷

Rachel and Shawn Andrews owned a home in a poverty-ridden North St. Louis neighborhood where very few educated, professional, middle-class families raising children would consider living. Like over 95 percent of their neighbors, they were African American. Driving through their immediate neighborhood in 1998 I imagined that only a Katrina-like disaster could have left such devastation: grass covered the empty spaces where homes once stood, broken and boarded-up windows were everywhere visible, and condemned buildings were a frequent sight. Yet these sat alongside homes that had been maintained or fixed up, occupied by families who were holding on. The balance between pockmarked decay and vibrant life changed block by block. The Andrewses’ street was among the better ones—only a couple of boarded-up “zombie homes” and nine vacant lots, by my count. Large, beautiful trees shaded their three-story brick home.

Rachel was single, twenty-three years old, fresh out of graduate school, and new to St. Louis when she bought the house in 1979. She did not want to be a renter. Her parents were home owners and had taught her that homes are hedges against recessions because “jobs are never promised to you.”

Housing had been tough to find when she arrived in St. Louis the year before. The city was notably segregated, and she could neither build up credit nor find anyone willing to rent to her. Discouraged, Rachel went so far as to call her father to tell him she was coming home. His response: “Do not come back home, baby. We love you but do not come home. You have money… find a YWCA.” Taking her father’s advice, Rachel lived at the Y for a short while until she was able to take over the lease of a friend who was moving to California. Less than a year later, she bought the house in which she now lived.

When asked how she chose the home, Rachel replied, “I didn’t choose it, it chose me.” As an urban planner, she was working on a project to develop and rehabilitate 150 affordable homes. In an impoverished, largely African American neighborhood, she found a run-down, abandoned house that her firm did not want to rehab as part of the project. It was “raggedy as hell,” Rachel said, “and that’s what I was looking for.… It had to be raggedy for me to afford it.” It would become the Andrewses’ homestead.

Rachel paid $1,500 in cash out of her first paycheck to buy the house and could barely afford to eat for a couple of weeks. The house had belonged to the first black morticians in St. Louis, and their children had not wanted to keep it up. It had been vacant for five years, the windows and doors covered over with tin. The owners were delighted to get rid of it because they no longer wanted to pay the taxes or cut the grass. Most of the other houses on the block looked just as run-down as Rachel’s, some worse.

For Rachel, $1,500 was the price of admission into a community devastated by private disinvestment, a long history of residential segregation, and bad urban policy. Only in a hollowed-out African American neighborhood full of boarded-up homes and condemned buildings in a long-neglected part of the city could one find a three-story brick home at such a bargain price. But as low as that price might seem, home ownership remained a daunting and expensive proposition for a single young black woman on her own just starting her career. To make the house livable, Rachel needed to fix the roof, windows, plumbing, and heating system. She needed to refinish floors, tear out walls and put in new ones, renovate the kitchen and bathroom, and paint. A day after the purchase was finalized, she started with a front door. “I hung the front door the next day because it didn’t have one. It had been vacant for five years,” she said. Rachel recounted shoring up the house’s most basic systems, one by one. The amenities came later; the luxuries, much, much later.

It was hard work, but Rachel considered herself a pioneer. She put the necessary sweat equity into making her home livable and then, in her words, “moved into the dust.”

During our 1998 interview, she talked about her experience as a divorcée raising a son, the money spent on his private schooling, and society’s perceptions of a black family like hers. Her marriage to Shawn—the second for both of them—was relatively new, and in many ways she still thought of herself as a single mom preoccupied with the dangers of raising a teenage boy in St. Louis. When we talked in 2010, Rachel seemed more settled, thinking of herself as a wife, a mother, a professional, a home owner, and an anchor of her community. Rachel’s son from her first marriage was in his early thirties and, after a stint in the military, was working and attending nursing school full-time. Rachel and Shawn’s daughter, Stephanie, was attending high school.

In 2010, the Andrews family was a bright spot of success in the midst of an otherwise impoverished neighborhood. The couple earned $125,000 in a census tract where the median income, at $17,102, was well below the poverty line. Rachel valued their home at $160,000, but they were surrounded by houses with a median sales price of $11,250. “For sale” signs and foreclosure auction notices dotted their block in a neighborhood where foreclosure affected one in eight homes. Some areas near Rachel and Shawn’s house were coming back up, but St. Louis had still not quite recovered from the foreclosure crisis that devastated families and communities starting in 2007.

Rachel’s home was a block north of the major east-west boulevard that racially divides St. Louis to this day. To the south of that boundary are gated streets, Tudor homes, boutiques and antique shops, restaurants, a whiskey bar, and an independent bookstore. These neighborhoods are largely white. To the north of the boulevard, one sees collapsing houses, weeds popping through cracking sidewalks, and few stores or businesses. These neighborhoods are almost all black.⁸

Indeed, one might ask why the Andrews family, with a $125,000 family income and an estimated net wealth of $630,000, remained in the same neighborhood. The average real estate broker, financial advisor, or middle-class home owner would likely be shocked at the family’s choice and defiance of the tried-and-true pattern of American economic mobility of moving up by moving out. Yet African Americans have not always had this option. In the past, formal segregation prevented them from following this time-honored path, and even today segregation’s legacy poses challenges that whites typically do not confront. The Andrewses were clearly capable of affording a newer, bigger home in a more upscale and stable community. Yet their home was part of their identity. It represented growth and advancement dating back to Rachel’s first paycheck when it was still “raggedy as hell.” Against the odds, she made that house her home. Over the years employers cut jobs and downsized or moved industries away from North St. Louis. Rachel and Shawn were fortunate in that they worked in jobs not readily cut or moved, but as urban blight spread around them, the house itself remained a safe haven and a key part of who they were, just as her parents had told her it would.

The neighborhood had become part of the Andrews family’s identity as well. In the 1990s, Rachel became keenly interested in starting a block improvement association. She and her group pushed to board up vacant homes, worked to keep drug dealers out, cleaned up empty lots, fought to bring back services, and sought to set up a neighborhood watch. This intensive level of engagement was necessary to make the community livable. Rachel still remained active in the block association over a decade later, though her work had expanded to involve more communities. “I’m very entrenched in what goes on in the city of St. Louis,” she said proudly in 2010. Against the standard American strategy of moving up by moving out into areas with a better school system or a private school, Rachel stayed behind to build. This commitment to improving her neighborhood made her both a pioneer and pillar of her community.

In 2010, Rachel’s neighborhood was changing around her, and she remained a keen observer of the transformations. When she bought her house in 1979, there were lots of vacant homes and a large senior population. The neighborhood consisted mainly of single-family homes, a few two-family homes, and some apartment buildings. These properties had been among the first that African Americans were able to buy in St. Louis, and they had been handed down through generations. Many of the families that originally came, African American families, had attended the neighborhood schools. They knew each other because they grew up together.

In 2010, the neighborhood was slowly attracting new residents. They tended to be younger, consisting of extended families with low and moderate incomes. Rachel noticed how the neighborhood was gradually changing economically and becoming more racially diverse. She noticed a few white families, a Hispanic family, a Bosnian family, firefighters, women walking with babies, men riding bikes, and people jogging—welcome signs of a stabilizing and improving neighborhood. There was no imminent danger of the kind of gentrification that displaces longtime or older residents or uproots families. Starbucks was not likely to set up shop in the near future. Home values, rents, and property taxes were not increasing so quickly as to make the neighborhood unaffordable to current denizens.

The value of the Andrewses’ home had increased with all these changes, despite the mortgage crisis and high unemployment. When we talked in 2010, Rachel thought her house would sell for about $160,000. Asked whether she viewed the equity she had built up in it as a special kind of money, she termed it “liquid,” considering it equity that she could use for emergencies or collateral on a loan, a safety net. Then she told a revealing story about when she first bought the house: “The day I was hanging the door this guy drove up and said, ‘I will give you $16,000 if you would sell your house to me.’ I looked at him and said, ‘My blood is in this house, man. I just cut my finger.’ He just started laughing, and he said, ‘I don’t have enough for your blood.’ I said, ‘You sure don’t.’”

The family continued to get unsolicited offers from time to time. But Rachel had no interest in selling. The home was a safety net and a hedge against inflation. If she and Shawn lost their jobs, they did not have to worry. Owning the house outright, as they had for decades, they could draw unemployment to pay their bills and live in their own home indefinitely.

But for the Andrews family, pioneering in a low-opportunity neighborhood lacking support structures came with heavy, hidden costs that the majority of middle-class and professional families never have to shoulder. Foremost among these were weak, poorly funded schools. Rachel succinctly summarized decades of social science studies with a simple observation: “Our school rolls with the housing patterns.”

In the city of St. Louis, housing patterns are highly segregated by race and income, the result of a history that includes a 1916 ordinance establishing “Negro blocks,” covenants restricting the buying and selling of property according to race, mobs enforcing segregation in housing and businesses, blatant discrimination by real estate agents, and a series of urban redevelopment policies, public housing measures, and zoning rules that contributed to the intense racial stratification. The city is predominantly African American, with the schools even more so. A high school eight-tenths of a mile from Rachel’s home is 100 percent minority, with 95 percent of students coming from low-income families and qualifying for subsidized meals. Rachel remarked that throughout St. Louis, families with greater wealth, especially those with school-age children, have tended to move out to the suburbs, leaving a city principally consisting of lower-income renters who cannot contribute to the shrinking property tax base supporting the school system.

This situation is all the more vexing because the children of the low-income families who remain in the city are precisely those most in need of attention and resources. These families experience a complicated set of social problems, including environmentally induced asthma, lead-paint health hazards, and the other illnesses and troubles that accompany them. Yet Rachel was not without hope. In her long experience in the community, she had witnessed students perform well so long as proven supports and well-resourced programs were in place both at home and at school to help them. In 2007 Rachel developed a tutoring program for students that were failing in schools and watched as math and language scores improved dramatically. “The resources and money isn’t there for lower-income students,” but they succeeded on Missouri statewide performance assessment tests “because an additional resource is in place to give them what they need.” She also pointed to “lighthouses” within the system, schools like the magnet school for bright, high-performing students that her daughter Stephanie attended, where “there’s little rays of hope.” Rachel proudly reported, “It’s the number one school in the state of Missouri and it’s maybe the number fourteen school out of the top one hundred in the nation.” Performance assessment tests indicate that just 15.5 percent of St. Louis high schoolers are college ready, while 78 percent are college ready at Stephanie’s school; 29 percent of students district-wide are proficient in English, compared to 91 percent at Stephanie’s high school.⁹ Stephanie’s school has less than half the students of many of the other St. Louis high schools; 58 percent are students of color, and 40 percent come from low-income families, both considerably lower figures than for other St. Louis schools. The day before Rachel and I talked in 2010, the school superintendent had announced that there would be no further teacher and school personnel layoffs that year. But three years later, facing yet another periodic budget squeeze, several more city schools were closed down, teachers let go, and class sizes increased.¹⁰

Rachel Andrews is a jewel any community would be proud to claim in its crown of assets. Her vision, since first hanging her front door in 1979, has rested on the increased prosperity of the neighborhood, allowing the Andrewses to stay in place. Instead of moving to a bigger house in a safer community with a richer educational environment and treating their home only as a financial investment, they stayed put, pioneered change, and navigated weak infrastructures of opportunity so that they and their children would not have to take on all the disadvantages of their community. Perhaps because of her St. Louis experiences, talents, and character, Rachel Andrews counts her blessings and wants to take her community-building talents and wisdom global, to something like the Peace Corps, when she retires. “God blessed me with tools and talents.… I’ve always felt that I should share what I have. I’ve never been without.… I can only imagine.” Because she has witnessed “being without” in the lives of others, she says, “If there’s something that I can give and I can be of service, I am.”

IT IS NO GRAND REVELATION THAT SOME NEIGHBORHOODS offer resources that make them more desirable than others. Most families would prefer to live in neighborhoods with good schools, low crime rates, stable or rising home values, nearby employment opportunities, trees, parks and recreation, accessible transportation, and reliable services such as police, fire, and garbage collection. Such high-opportunity neighborhoods have obvious advantages over those with failing schools, high crime rates, declining or unstable home values, poor services, and few employment prospects.

Families living in high-opportunity neighborhoods see real gains in financial, social, and physical well-being. Children who attend high-quality public schools receive more resources, support, opportunities, and encouragement; they also have higher peer expectations of graduating high school and attending college. Neighborhoods with low violent and property crime rates reduce the risks of physical and mental harm. Neighborhoods with stable or rising property prices increase the likelihood of household wealth growing through home equity. Neighborhoods with nearby employment mean less time spent commuting and increased opportunities for work. Transportation, whether public or private, ensures that families have easy access to employment and other amenities.

In contrast, those living in low-opportunity neighborhoods with poor-quality schools and high crime rates face challenge after challenge—less home-value appreciation, fewer physical and mental health services, lower educational outcomes—inhibiting their capacity to live well and move ahead. Students attending schools with high concentrations of poverty have worse educational outcomes.¹¹ Residents of low-opportunity neighborhoods are likely to pay more for groceries and services, as well as higher auto insurance premiums and mortgage rates. Such neighborhoods generally provide fewer local job prospects, and many have poor transit connections to growing job centers. Finding better employment is also harder because neighbors all tend to work the same kind of jobs offering neither secure employment nor opportunities to move up the ladder.

Communities with low or weak opportunities are often vulnerable in ways we do not think about, especially if they are communities of color. Legal judgments stemming from debt-collection lawsuits (usually small consumer debts) are clustered in black neighborhoods.¹² An exhaustive study of such settlements in three cities over five years of court actions found that judgments were twice as high in black neighborhoods, even after controlling for neighborhood income. The study concluded that generations of racial discrimination, along with fewer resources to navigate personal, health, or family crises, contributed to black families’ heightened financial vulnerability. Such stumbling blocks blight the lived experiences and budgets of families of color; yet they are invisible to those who live in white neighborhoods.

Parents universally express a strong desire to move into safe areas with good schools, realizing that neighborhood and peers can impact their own and their children’s life trajectories.¹³ While these outcomes are compelling, perceptions of quality and opportunity play an important role in residential choice. Although families are drawn to and choose neighborhoods within their budgets for many different reasons, most would indisputably prefer to live in an attractive, high-opportunity neighborhood where they can grow and thrive. To a large extent families know what they are talking about, and, indeed, they vote with moving vans. As families move, they help to both construct and reinforce these very patterns of neighborhood opportunity.

In short, neighborhoods in the United States are not created equal. As in St. Louis, although perhaps not always in as stark a fashion, dividing lines of color and wealth across the country are the living legacies of segregation, redlining, discriminatory local ordinances, steering by realtors, private disinvestment, and public policy choices. Adding to residential segregation, neighborhoods are becoming increasingly segregated by the quality of the resources and opportunities they offer. At the same time that income and wealth inequality has reached historic levels, the chasm between high- and low-opportunity neighborhoods has widened. Instant communication and social media connections cannot span our growing physical, social, and opportunity divides.

As the high- and low-opportunity divide sharpens, and as low-opportunity areas become more numerous, more families are living in concentrated poverty. The interview team witnessed this growing trend among the families in Boston, Los Angeles, and St. Louis. Since 1970, the number of high-poverty neighborhoods in the United States has tripled, and the number of poor people living in them has doubled. Due partly to the Great Recession, 5 million more Americans lived in highly distressed neighborhoods in 2012 than did so before 2006.¹⁴ One report looking at neighborhood inequality examined urban areas from 1970 to 2010 and found that census tracts populated by about 4 million people in total slumped from below the poverty line to high poverty (30 percent or more below the poverty line) during these decades.¹⁵ While living in poverty is difficult and challenging anywhere, it is made worse when a large fraction of one’s neighbors are also poor.

Fewer than one in ten high-poverty neighborhoods in 1970 cut their poverty rates by more than half by 2010.¹⁶ Three times as many communities are joining the ranks of high-poverty neighborhoods as are escaping this sort of distress, indicating that we are headed in the wrong direction. Economically segregated neighborhoods inhibit family economic mobility more than inequality, per se.¹⁷ The double whammy here is that individual and location-based inequality are integrally connected, and both are increasing. Understanding neighborhood inequality is critical to deepen our understanding of wealth, poverty, and chances for mobility not because neighborhoods group families economically but because opportunities, networks, and services pass advantage and challenges along. Despite beacons of success like the Andrews family, the clear trend is toward neighborhood economic decline and segregation.

Many families cannot realize the dream of living in a high-opportunity neighborhood. A family’s wealth determines the choices available in maximizing neighborhood quality. While some families can draw on a rich set of resources to gain access to high-opportunity neighborhoods, parents with few resources are more often stuck in low-opportunity neighborhoods and cannot afford to pay privately for services like schooling or safety. These disparities in resources, which vary heavily depending on race and class, mean that race and class sort families into starkly different neighborhoods. The story of Freda Harmon offers a glimpse of what it is like to be trapped in a low-opportunity neighborhood without the benefit of the middle-class resources the Andrews family enjoyed. In Freda’s experience, we find challenges and choices most middle-class families would hardly recognize.

FREDA HARMON, A SINGLE MOTHER, HAD LIVED IN LOW-opportunity Boston neighborhoods all her life. Since we first spoke in 1998 she had moved six times, trying to find a safer neighborhood for herself and her three children. By 2010, because she could not afford to live anywhere else, she was renting in a neighborhood with regular gang presence, shootings, and robberies. “A lot of murders around the corner. I can be in my house [and] I hear gunshots at 2:00 in the afternoon,” Freda vividly recalled. In neighborhoods like hers, violence and fear are not confined to the streets. Freda remarked that “parks are supposed to be for kids to play, but if you don’t have the police patrolling these areas to make sure this is happening, anything can happen.” She remembered a little girl who was murdered. “It’s supposed to be a park where kids can play,” she lamented.

Fearing for the safety of her three children, two years earlier Freda had left her full-time job as a medical assistant in a suburban doctor’s office for more flexible hours working in customer service at a grocery store. The new job allowed her to be closer to home and to her children’s schools, enabling her to better protect her family, but it also paid $8 per hour less. Freda told her children not to play outside and took other precautions out of fear that a stray bullet might strike one of them. In an effort to navigate the poorly resourced local schools, she had put her seven-year-old in therapy to address poor academic performance, attempted to place her twelve-year-old in a program that might produce a scholarship to a private school, and moved her eldest son into an alternative charter school.

Some might ask why Freda didn’t move her family to safety and a strong community. If it were simply a matter of choice, she might have done so already. But she could not afford the rent anywhere else. The affordability constraint aside, moving would also take a kind of emotional toll, undermining her pride in the place she had made home. Freda said, “Every time I want a new, big kitchen, curtains. Some apartments don’t have curtains. The bathroom… I usually do it over. It cost money to move. So I’m like damn, I guess I can’t move again. I try to stay here. I’ve been here two years. So I’m tired of moving.” Place is neither fate nor legacy, but Freda knew its power firsthand. “Sometimes you can just be at the wrong place at the wrong time,” she said. “But this is not the wrong place ’cause we live here.”

The average income of families living in a neighborhood is a close indicator of its quality and opportunity. In 2010, nearly half of white families in America lived in high-opportunity neighborhoods, as compared to about one-fifth of African American families.¹⁸ These locational patterns are not simply a consequence of family income differences, however.¹⁹ Middle-income African American families with children live in very different neighborhoods than their white counterparts. In 2000, compared to African American families with similar incomes, white families lived in neighborhoods with much higher home ownership rates (74 versus 57 percent) and higher median home values ($150,726 versus $129,170), as well as more college-educated families (24 percent with a bachelor’s degree or higher versus 17 percent) and higher median incomes of neighbors ($67,672 versus $51,565). By 2010, the distance in median home values in the neighborhoods of middle-income African American and white families had increased by $18,811; the breach in college-educated families increased by 22 percent; the gap among neighbors’ median incomes also ticked up. Only the gap in home ownership rates closed, largely because of an increase in black home ownership.²⁰ It is difficult for low-income families like the Harmons to succeed in the neighborhood where they reside; yet even middle-income African Americans continue to live disproportionately in low-opportunity neighborhoods.

Persons of color bear the burden of concentrated poverty unevenly. In 2010, African American and Latino families accounted for three-fourths of poor families living in urban neighborhoods with concentrated poverty. In that year, African Americans were eight times more likely than white residents to live in high-poverty neighborhoods, and Latinos were five times more likely.²¹ These high-poverty concentrations create low-opportunity neighborhoods with severely diminished prospects.

Freda Harmon’s family was poor, with little choice but to live in a low-opportunity neighborhood. The larger picture shows that regardless of income, black families are more likely to live in such neighborhoods or in bordering communities that often share schools and public services. A third family’s story suggests another reason why that is true: because extending a long historical pattern, these neighborhoods become weaker and more poorly resourced. The story of these places is deeply rooted in past and present policy. To show how seemingly abstract explanations like residential racial dynamics, active real estate churning, and tipping points can affect a family’s arc and contribute to toxic inequality and the racial wealth gap, we turn to the Medinas.

THE MIDDLE-CLASS MEDINA FAMILY MOVED TO THE DIVERSI-fying municipality of Spanish Lake in northeastern St. Louis County in 1998. Spanish Lake was long ago an embarkation spot for the Lewis and Clark expedition. Bounded by the Mississippi River to the east, the Missouri River to the north, and highways to the west and south, the 7.5-square-mile Spanish Lake was once a model 1950s white working-class community. Over the years, however, its fortunes have fallen. Spanish Lake now represents a classic case of residential segregation, poor federal housing policy, and white flight.

In 1998, India Medina described what drew her to the house she liked in Spanish Lake: it was spacious, with a wide-open kitchen, and in the family’s price range. The neighborhood was really good, with a professor and his kids living next door. India emphasized how “everybody kind of was owning and stuff.” Yet over the ensuing decade, real estate brokers, speculators, and predatory lenders seized upon a vulnerable moment and transformed the community for the worse.

Spanish Lake may have fit the Medina family’s budget in 1998, but by 2010 it didn’t suit their needs or aspirations. They were not happy with the schools, but finding a community with quality schools, given their moderate resources, had proven difficult. Such a move, India said, “requires that we spend more money [on a home]. The correlation is, the more money you have, the better school district you’re going to be in.”

The neighborhood changed quickly after the Medinas moved in. Once anchored by a diverse set of home owners, by 2010 it consisted mostly of renters. As India explained it, “They’ve Sectioned Eight a lot of these houses [provided rent subsidies for low-income families].… [T]he brokers have bought them up when the people moved out.” India witnessed firsthand the white flight as the neighborhood tipped from owners to subsidized renters, from white to black. “Black people start moving in, white people start moving out, and then the neighborhood kind of was crashing down,” India said. There is hardly any diversity left, and now most of the community’s residents, like the Medinas, are black.

Alongside this demographic transformation, the Medina family’s home value sank quickly from $100,000 to $70,000. When we spoke to her in 2010, India believed it was undervalued and hoped that it would come back up. But hope was in short supply, and she seriously doubted the house’s value would rise. This had ominous financial implications. When we asked about the money the family had put into the house, India said, “Oh, yeah. Yeah, we can’t get our money out of this house now.” The Medinas contemplated following the white flighters who had departed before them. “We’ll probably be forced to do the same thing everybody else does, it’s rent it out,” India said. “Sell it out to a broker and let them rent it out, or rent it out ourselves.”

India was clear about who she blamed for transforming and destroying her neighborhood: real estate speculators and absentee owners. “They’re renting out houses,” she said. “You’re kind of destroying the whole structure of things, and I just don’t think you can bring the neighborhood back with people moving in and out, in and out.” Indeed, America’s number one home owner today is not an owner-occupant but one of the world’s largest and most successful private equity companies: Blackstone Group. With almost 50,000 single-family homes acquired since the housing crisis, it is fair to say that no single entity in history has placed a bigger bet on the US housing market. Financial speculators like Blackstone buy homes at depressed, often foreclosure, prices, perhaps spruce them up, and then rent them out, offering a rent-to-own scheme. Some utilize federal rental subsidies,²² the kind India referred to as Section Eight, and rent to low-income families. In Spanish Lake the landlords tended to be smaller hedge fund investment firms.²³ Private equity firms, hedge funds, real estate investment trusts, and other institutional investors spent more than $20 billion to buy as many as 200,000 rental homes in the United States between 2012 and 2014. They snapped up properties as housing prices fell as much as 35 percent from the 2006 peak and rental demand rose as a result of the almost 5 million owners who had gone through foreclosure since 2008.²⁴ Blackstone and others transform hamlets like Spanish Lake from communities of owner-occupied homes into blocks of renters and absentee landlords.

Rapid neighborhood transition like that which occurred in Spanish Lake causes devastating upheavals in families and communities. Speculators, real estate brokers, and financial investment firms purchase homes at bargain prices and profit at the expense of community stability as home owners are forced out, in many cases their life savings wiped out. Absentee landlords hold on to the properties, hoping they will increase in value as times get better, while benefiting from federal rent subsidies. And communities where the Medinas and families like them had hoped to lay the foundation for getting ahead have instead become low-opportunity areas. Before its rapid transition, India said in 2010, Spanish Lake had been a place where people stayed for a long time and someone like her could develop sustainable relationships and networks. But now, she did not see the neighborhood coming back; instead she saw it getting worse. “We aren’t staying.”

As neighborhood opportunity segregation widens and hardens, the rewards or disadvantages of community location become more visible. Families we spoke to like the Medinas seemed to understand this dynamic implicitly, and if they had the financial resources, most intentionally sought better-resourced and higher-opportunity locations. But most families who want to move to these neighborhoods find the costs prohibitive as access typically requires home ownership. Some who cannot afford the high real estate prices and property taxes common in these communities seek other ways of securing their unique benefits. They need to navigate schools and services, bearing the often hidden costs of seeking better opportunities.

RESEARCH SUGGESTS THAT ECONOMICALLY SEGREGATED neighborhoods harden advantage and disadvantage by making economic mobility more difficult.²⁵ The families we interviewed were enmeshed in the central dynamic that high geographic inequality is an additional mechanism by which parents transmit economic advantage and disadvantage to children, leading to lower overall levels of economic mobility. For example, the Los Angeles metro area has high economic segregation and lower mobility. Boston has lower economic segregation relative to many other metro areas and slightly higher economic mobility. These findings suggest that it is harder to climb up the economic ladder in areas that are more highly stratified economically, like Los Angeles, where wealthy parents are more able to pass along advantages to their children, than in more economically integrated areas like Boston.²⁶ While this finding is cold comfort for working Bostonians, especially for families of color in a city with high levels of residential segregation, it bolsters the notion that greater equity improves prospects for well-being and economic mobility. Greater inequity among neighborhoods solidifies toxic inequality because it decreases opportunities and chances for enhanced economic mobility for families.

Understanding their resource-laden opportunities, some high-opportunity communities are seeking to protect their competitive advantages—perhaps none more notoriously than Orinda, California, in 2014.²⁷ Located just east of Berkeley, Orinda is home to many affluent suburban professionals who commute to downtown Oakland, San Francisco, and Walnut Creek. Forbes named it the second-friendliest town in America in 2012, based on its 90 percent home ownership rate, low crime, and highly educated citizens—the picture of a high-opportunity neighborhood. Orinda’s public schools are known for their academic excellence, and their performance scores are near the top. Striving parents, however, cannot simply enroll their children in Orinda’s public school system. Home ownership is the price of admission. In early 2015, the median Orinda home price was $1.25 million, or one could rent for $4,250 a month.²⁸ With a median income of $164,000, Orinda is 82 percent white, compared to 57 percent of California as a whole.

In 2014, Vivian, a seven-year-old Latina, was thrown out of Orinda’s public schools because a private detective hired by the school system determined that her family did not officially reside there. Vivian stayed with her mother, a live-in nanny for an Orinda family. Her case highlighted school officials’ limited sense of the “public” they served—although she stayed with her mother in the community where her mother lived and worked, because Vivian and her mother could never live in Orinda on their own, Vivian was seen as a trespasser, poaching a community resource to which she was not entitled. Vivian had crossed an invisible border, gaining richer educational resources without proper documentation. Her citizenship was not questioned; her address was. After a flurry of negative news reports, Orinda relented, and Vivian is back with her schoolmates.

Orinda’s methods may be exceptional—pursuit of a nanny by a private detective—but resource hoarding of this sort is becoming a standard practice in many communities. In 2011, for instance, Kelley Williams-Bolar, an African American single mother, was arrested, charged with felony larceny, and sent to jail for stealing resources from Copley Township school district in Ohio, all because she sent her two daughters to the predominantly white suburban public school without meeting the township’s residency requirements.²⁹ The Williams-Bolar family lived in an Akron, Ohio, housing project, where the dearth of good schooling options spurred Kelley to ask her father to use his address to enroll her children in his local school instead. Her children attended the school for two years until the school district filed criminal charges against her. As in Orinda, the school district spent thousands of dollars to hire a private detective to stop her from “stealing an education.” Due to public outcry, Kelley was ultimately released from jail, but the conviction stood and, as the judge harshly reprimanded, disqualified her from ever fulfilling her dream of becoming a teacher.

Stories like Kelley’s reflect parents’ high aspirations for their children and the lengths they will go to in an attempt to secure access to neighborhoods and schools that poise their children for a brighter future. We interviewed several families who used another family member’s home address or lied about where they lived to gain access to better schools. None faced criminal charges, although one student was removed from a school system because the child’s parents falsified an address. As the growing cleavages between high- and low-opportunity neighborhoods become demonstrably clear, and as the latter grow in number, moving from the latter to the former is growing ever harder. The Orinda and Copley Township resource hoarding reinforces the importance of place and wealth to opportunity. As toxic inequality rises, we will see more and more such conflicts, with all of their fraught racial politics. The California and Ohio cases serve as cautionary tales that inequality has become so toxic that crossing lines between poor and rich, between high- and low-opportunity neighborhoods, especially when it involves families of color, is potentially criminalized as a way to protect privilege.

RESIDENTS’ CONCERNS AND OFFICIALS’ RESOURCE HOARDING in high-opportunity communities contrast sharply with public policies in places like Ferguson, Missouri. In 1998 we talked to Linda Diamond. Then living in the heart of urban St. Louis, Linda was working hard, raising three children, and striving to move forward. Like other parents with young children, she aspired to a better life for her family and was willing to sacrifice so her children might advance. We asked where she would go if she could move anywhere. Linda hesitated. “I really haven’t given a thought to it.” But she quickly warmed to the idea. “I guess I’d like somewhere in the county most likely,” she said. “Like Ferguson.” When I asked what she liked about Ferguson, she said, “It’s like, they have good schools out there.” Anything else? “Just the area. It’s convenient; it’s like, shopping malls, stores.”

Later in our conversation, again pinpointing Ferguson as her dream destination, Linda drew a connection between good schools and diversity. Linda thought that mixing with more children of different ethnic groups would be important to her children’s future, because it “teaches them to get along with other people, even though their skin color is different.” Like Linda, whites and African Americans alike want their children to experience diversity in schools, although the threshold for what constitutes racial integration differs dramatically by ethnic group. Diversity as defined by whites, as opposed to members of other racial or ethnic groups, involves a much lower percentage of minority group members living in their neighborhoods and attending their schools. The number of black residents at which African Americans consider a neighborhood diverse far exceeds the threshold at which most whites consider the proportion out of balance and decide to exit.³⁰

This is precisely what happened in Ferguson, Missouri, Linda Diamond’s dream destination in 1998. Ferguson acquired a much more tragic reputation in 2014, when a white policeman shot and killed an unarmed black teenager, Michael Brown, there. The following weeks witnessed increasing tension, demonstrations, arrests, and hostility that turned violent at times. After a grand jury refused to indict the police officer, the Black Lives Matter national movement coalesced with Ferguson as a symbol of the criminal justice system’s mistreatment of African Americans. Demonstrations, lawsuits, Department of Justice investigations, and local commissions ensued. All helped to reveal how the roots of the fatal encounter between Michael Brown and the officer reached deep into the interaction between public policy, race, and a rapidly transitioning community.³¹

Ferguson, like many similar towns, including Spanish Lake, looks very different today than it did ten or twenty years ago, certainly different than the ideal Linda Diamond had in mind in 1998. In 1990, whites constituted 74 percent of the population, but that figure had plummeted to 29 percent by 2010. Blacks grew from 29 to 67 percent of the population over the same period. Many black families that moved to Ferguson were just achieving middle-class status by virtue of their income, occupation, home ownership, and education. Many were fleeing hollowed-out sections of urban St. Louis and North St. Louis, looking for suburban safety, good homes, better schools, shops, and opportunities. In 2011, 60 percent of Ferguson residents were home owners.

Home values in Ferguson plunged in the wake of the Great Recession and the massive outbreak of foreclosures that followed, and the city’s many first-time home buyers suffered. In late 2014, home values were still 40 percent below 2006 levels. In early 2015, close to three hundred homes in Ferguson were on the market; alarmingly, 70 percent were in foreclosure proceedings or had been foreclosed. Today, banks are foreclosing on Ferguson homes at four and a half times the national rate, whereas many communities experiencing similar drastic declines in home values are well along the road to recovery. Just a few miles from Ferguson, across Highway I-70, home values in many communities are at or near pre-2006 prices. These communities tend to be largely white and middle-class or wealthier.

Ferguson’s 2015 median family income was $37,000, above the official poverty line but just below the level defined as middle income. Ferguson’s median income was more than twice that of the inner-city St. Louis neighborhood where the Andrews family lives. Yet even high-income African American and Hispanic/Latino borrowers were more likely than similarly situated white borrowers to go into foreclosure in the wake of the recession, controlling for key financial variables. Studies examining communities like Prince George’s County, Maryland, show that the foreclosure crisis devastated many previously upwardly mobile African American and Hispanic/Latino families and, as a consequence, distressed many communities of color.³² Borrowers of color disproportionately received mortgages on predatory terms that studies have shown made foreclosures more likely.³³

As white flight rapidly transformed Ferguson from majority white to majority black, the municipality also began to rely more and more on fees from traffic and moving violations, as well as court fees, to finance local government. In 1980, Missouri passed the Hancock Amendment, which restructured how municipalities could raise revenues by putting severe limits on state and local property taxes. Intended or not, this measure radically changed the way cities and municipalities raised revenues, shifting from taxes levied on property owners to user and service fees, which remained unaffected by the amendment. By 2014, revenues resulting from traffic and moving violations accounted for almost a quarter of Ferguson’s revenue. Fifty-five patrolmen wrote more than 14,000 traffic violations in 2013. In some real ways, police became tax collectors, trolling for and extracting municipal fines, raising revenues for the city by routinely stopping cars and issuing tickets. The tax burden fell increasingly on working-class citizens utilizing public infrastructures like streets and essential city services, shifting away from home owners, businesses, and the Fortune 500 corporation Emerson Electric, which is headquartered there.³⁴ As Ferguson became blacker and poorer and opportunities for its residents diminished, the old-guard city leaders increasingly raised revenue from those who could least afford to contribute.

WE SPOKE TO LINDA DIAMOND AGAIN IN EARLY 2011. HER oldest son was working on his general equivalency diploma, her middle son was attending a local community college, and her sixteen-year-old daughter, Abby, was a high school junior planning for college. Linda’s family fortunes, like those of so many others, had been a roller coaster. Her income, at poverty levels in 1998, skyrocketed all the way to her $150,000 salary as an executive chef in 2008. Her success came to an end, however, when her younger son, afflicted with sickle-cell anemia, had a stroke, and she needed to leave her high-paying job to care for him until he started doing better. Working two jobs in 2011, she brought in less than half of her 2008 income. As fortune would have it, she had never ended up moving to Ferguson. For a short time, Linda and her family moved into a rental house less than two miles from that city, but juggling several jobs and tending to a child with acute and chronic medical needs, she found keeping up a house too burdensome. Linda moved back to urban St. Louis, not far from where we first met in 1998, hoping to save money to start a business.

Then tragedy struck. In late 2011, just before Thanksgiving, a stray bullet hit Abby Diamond. A shot from a vacant lot across the street tore through windows and walls, piercing the teen’s back. She died in her own home in her aunt’s arms.

As if grieving was not already hard enough, the family was stuck living in the apartment, where evidence of that horrible day remained indelible on the floor. To no avail, Abby’s mother and aunt tried several home remedies—bleach, milk, hydrogen peroxide, and water—to erase the bloody stain that served as a constant reminder of the girl’s death. The Diamonds planned to move as soon as they could. Just as the dream of Ferguson had turned into a nightmare for many who had moved to that community, the move back to St. Louis led to tragedy for Linda Diamond and her family.

Success and tragedy, optimism and desperation, are bound together in the stories of home that the Andrews, Harmon, Medina, and Diamond families shared with us. Some started in poverty; some were middle-class; all were African American. Some had moved many times in the period between our two interviews; some had not. No matter their specific choices, all faced greater hurdles in neighborhood opportunities, mobility, and well-being than they would have had they been white or wealthier. All of them faced advantage and disadvantage, opportunity and challenge, that hinged on their neighborhood location and community assets. In particular, opportunities allocated through neighborhoods are becoming increasingly disparate and crucial to success. Economics and race generate increasing separation between neighborhoods, with race conferring additional disadvantages even for families of color with comparable economic status.

Yet home is not the only source of opportunity, and community is not the only platform for, or stumbling block to, advancement. The next chapter moves from city streets and suburban lawns to the workplace, revealing how toxic inequality develops on the job.