Modern Disintegration: The Effects of School Resegregation on Neighborhood Property Values and Foreclosure Rates

Background and Purpose: As of 2016, over half of all school districts that had ever been under court-ordered desegregation orders had been released from court oversight. Prior studies have found that districts released from these orders subsequently became increasingly racially segregated, effectively reversing the gains in school integration initiated by the Supreme Court ruling in Brown v. Board of Education and the Civil Rights movement.  Using a variety of sources of national data, this paper explores what happens to community wealth when a federally mandated commitment to the education of minority students is relinquished.

Methods: Utilizing the 2005-2014 American Community Survey (ACS), the Department of Housing and Urban Development's (HUD) Neighborhood Stabilization Program data, and a unique database of characteristics of districts ever under desegregation orders, this study exploits variation in the timing of release from court ordered desegregation orders to estimate changes in (1) demographics, (2) local property values, and (3) foreclosure rates among households in affected neighborhoods resulting from release from federal desegregation oversight. Results are stratified by race/ethnicity and by timing of release.

Results: Preliminary findings indicate that property values decreased for African American and Hispanic households while foreclosure rates increased among the same groups, while both remained unaffected for white households.

Conclusions and Implications: Understanding the effects of this reversal of social/educational policy is critical for policymakers seeking to serve vulnerable children and families as effectively as possible. My results indicate that current lessening enforcement of desegregation policy may have significant consequences for the resources available to minority families, which is likely to exacerabate racial and economic inequality in the U.S.