School Re-Segregation and White/Black Difference in Property Values

Background and Purpose:
Beginning in the early 1990s, a series of decisions passed through the Supreme Court drastically changing the landscape of school desegregation enforcement. In 1991, the Supreme Court ruled in Board of Education of Oklahoma City v. Dowell that once school districts were declared unitary (that is, not separated into racially disparate sub-districts), they could be permanently released from court oversight. Freeman v. Pitts (1992), another Supreme Court case, made it easier for districts to qualify as being unitary. Missouri v. Jenkins (1995) limited the power of federal courts to enforce integration orders and emphasized that release to local control of school districts should be the end goal of all desegregation plans. As a result of these three rulings, hundreds of schools districts, more than half of all districts ever under court orders, were eventually released from court oversight requiring them to remain desegregated. Concurrently, racial school segregation in these districts began to gradually increase (Lutz, 2011; Reardon, 2012). This evidence of re-segregation, however, is essentially that all we know about the effects of slackening desegregation enforcement. Little work has examined the effects of this reversal of educational policy on the environments of minority children and families affected by them.

Methods: In this paper, I present an analysis of how property taxes – an indicator of housing values -- responded to changes in desegregation enforcement. Using Census data, I compare property taxes collected in counties hosting school districts that were released from desegregation orders to taxes from homes in nearby counties still under orders. I also conduct separate analyses by neighborhood racial segregation status to investigate whether effects of desegregation policy changes vary by the racial composition of neighborhoods.

Results: I find that White and Black property taxes in non-dismissed areas appear to move in tandem. In dismissed counties, the opposite is true – where White values trend up after termination, Black values trend down. On average, White property taxes increased post-termination, and the largest increases were found in segregated White neighborhoods. Black property taxes, on average, did the opposite, decreasing post-termination, and most steeply among segregated Black neighborhoods.

Conclusions and Implications: Since most Americans hold the majority of their wealth in housing, and as the ability to build wealth depends on how much wealth households have to begin with, these differences in property values may have compounding effects down the line. Further, as school quality is largely a function of how much funding is brought in via property taxes, racial gaps in wealth and educational attainment may increase over time. These findings describe a landscape of unequal opportunity for Black children and families in the United States, characterized by poorer chances of accumulating wealth. The goal of this study was to aid policymakers with an empirical portrait of what happened to the places school integration once thrived.