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Social Justice Research

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01.09.2015

Bursting Whose Bubble? The Racial Nexus Between Social Disaster, Housing Wealth, and Public Policy

verfasst von: Kasey Henricks

Erschienen in: Social Justice Research | Ausgabe 3/2015

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Abstract

While prior research considers race a factor in the mid-2000s housing meltdown, few scholars have extended a structural interpretation to explain the racial nexus between social disaster, housing wealth, and public policy. Utilizing national-level data from the Survey of Income and Program Participation, I measure the housing crash’s before-and-after impact on home equity values by completing a series of ordinary least-squares regression models. My aim was to discern what extent racial disparity exists in housing wealth, how this disparity has changed since the housing crash, and what implications these trends have for the institutional maintenance of racial inequality. The evidence I offer confirms that race is an organizing principle for who can claim long-term benefits of homeownership. Having implications for ‘the sedimentation of racial inequality,’ my findings show how institutional restraints build upon one another in overlapping and interacting ways to reproduce racial inequality.

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Numerous analysts privilege the term ‘Hispanic’ over ‘Latina/o,’ or treat the two as interchangeable. I solely employ the term Latina/o throughout for political reasons. The pan-ethnic label Hispanic is intertwined with a history of European oppression, as it refers to those of Spanish origin but is imposed onto those of Latin American ancestry. Therefore, it is a symbolic imposition deeply rooted in conquest and colonization (Sáenz & Murga, 2011). At times, I also rely upon racial terminology to refer to Latinas/os but recognize the impression this entails. This group is often defined in ethnic terms, such as cultural markers like language, religion, or place of origin.

Though much work in the structural tradition emphasizes discourse as the crystallizing mechanism of racial structure, both Bonilla-Silva (1997) and Feagin (2006) recognize that the maintenance of racial hierarchy is not dependent upon ideology alone but the interacting nature of ideology and praxis. Throughout the analysis I advance, I focus on the latter since it has been understudied by those who endorse a structural interpretation.

This is not to say New Deal policies were first to offer racially exclusive property acquisition. Besides the institution of slavery, the federal government encouraged westward expansion throughout the nineteenth century by transferring millions of acres to mostly white families (Fuchs, 1990). These transfers were outright or sold at undervalued prices. Examples include President Andrew Jackson’s Indian Removal Act of 1830, President John Tyler’s Preemption Act of 1841, and President Abraham Lincoln’s Homestead Act of 1862, among others.

This new type of lending contributed to the rise and fall of the housing bubble because it permitted independent lenders to generate unsecured mortgages, which were sold to third-party investors who assumed the financial risk (Engel & McCoy, 2007).

All SIPP data were retrieved through the DataFerret tool made available by the US Census Bureau. This analysis and extraction tool permits researchers to customize SIPP data, as well as other federal, state, and local data held in the bureau’s digital repository. These data are publicly available and free to access. For those interested in replicating this study, or pursuing independent queries with SIPP data, please visit the following: http://dataferrett.census.gov/.

All models have been tested to determine whether the assumptions of OLS regression were violated, and little evidence is available to indicate the model specifications are problematic.

Though my mean scores show the average Asian household gained equity between 2001 and 2010, this observation is likely an overestimation for the general Asian population and an artifact of the sampling procedure. Asian households cluster in coastal, urban areas of the USA, areas that witnessed among the highest foreclosure rates (Kochhar et al., 2011). However, only homeowning households are included in my samples so these Asian subgroups are systematically omitted.

Perhaps this calculation is too conservative. Kotlikoff and Summers (1988), for instance, estimate as much as 80 % of a family’s net worth derives inheritance.

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Titel: Bursting Whose Bubble? The Racial Nexus Between Social Disaster, Housing Wealth, and Public Policy
verfasst von: Kasey Henricks
Publikationsdatum: 01.09.2015
Verlag: Springer US
Erschienen in: Social Justice Research / Ausgabe 3/2015
Print ISSN: 0885-7466
Elektronische ISSN: 1573-6725
DOI: https://doi.org/10.1007/s11211-015-0244-8

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