Closing the Racial Housing Wealth Gap

The racial wealth gap in Boston is probably best known by one of the most mentioned statistics in Massachusetts politics, derived from a Boston Federal Reserve Bank 2015 study that found the median net worth for white households in Greater Boston was $250,000 dollars while for non-immigrant Black households, it was just $8 dollars. The racial wealth gap persists across the US, with a Federal Reserve Bank of Minneapolis report identifying a gap of 277,967 of per capita wealth between the average white American ($338,093 in 2019) and Black American ($60,126 in 2019).¹ The racial wealth gap is widely recognized as a consequence of slavery and continuing post-slavery discrimination, with reparations seen as a mechanism to right past injustices. However, race-neutral ideologies sewn into the fabric of policies create barriers to effectively using tools of governance and economics to service reparations and close the racial wealth gap.

A new paper, “Race-neutral vs race-conscious,” models the use of algorithmic methods to understand and evaluate the potential of housing programs to shrink the wealth gap and provide reparations to Black Americans. Using a hypothetical scenario with race-conscious Special Purpose Credit Programs (SPCPs), the authors of the paper demonstrate how algorithms and computational methods could support outcomes aligned with movements for reparations more effectively than those that are race-blind.

“Housing is a critical asset for building household and generational wealth in the US,” said co-author, Wonyoung So, a doctoral candidate at DUSP. “Our models show that a race-neutral housing program increases white housing assets, demonstrating that these types of programs are not actually race-neutral. However, if one introduces race-conscious, people-based approaches, these same programs are two to three times more effective in closing the racial housing wealth gap.”

So is an urban researcher and designer, who studies how urban data and technology have been historically used to orchestrate, predict, and police public life and how the future of urban science can be different if we care more about empowering marginalized groups in the city.  

Catherine D'Ignazio, co-author of the paper and Associate Professor of Urban Science and Planning at DUSP, leads the Data + Feminism Lab which uses data and computational methods to work towards gender and racial justice, particularly as they relate to space and place. D'Ignazio is a scholar and artist/designer who focuses on feminist technology, data literacy and civic engagement.

Read their full paper in Big Data & Society, an Open Access peer-reviewed scholarly journal.

_{1. Derenoncourt, Ellora and Moritz Kuhn. “Wealth of Two Nations: The U.S. Racial Wealth Gap, 1860-2020.” June 10, 2022. https://doi.org/10.21034/iwp.59}