Households led by people of color residing in King County, Washington — the area that Seattle sits in — lost an estimated $12 billion to $34 billion in wealth since 1950 due to racist housing policies. This is according to a report commissioned by King County, which was first reported on this week in the Seattle Times.
The report, conducted by consulting firm ECONorthwest, found that the sizable totals of lost wealth were not only attributable to racially discriminatory policies and practices including redlining, but also to money that went to rent payments that did not help to establish the growth of a household’s wealth.
The report also accounts for “wealth lost because of lower home value appreciations for homes owned by people of color compared with white people,” according to the reporting.
When specifically looking at King County’s Black households, the estimated intergenerational wealth loss since 1950 is estimated to be between $5.4 billion and $15.8 billion, and also included a rundown of some of the policies the report identified as racist.
“The lower estimate is based on inflationary adjustments and the higher estimate is based on the growth of the S&P 500,” a summary of the report issued to county leaders said.
This includes a policy going back as far as 1855, 34 years prior to the admission of the territory to the Union as a state, when “Washington’s first territorial governor compelled Indigenous Tribes in the area to cede their lands and move to reservations,” according to the summary.
The report also identified federal policies tolerated by state and federal governments that contributed to the depression of wealth for people of color, including the 1934 establishment of the Federal Housing Administration (FHA) which “incentivized communities to embrace single-family zoning and racial deed restrictions to be considered for mortgage insurance, feeding into the practice of redlining,” the summary said.
“Discriminatory practices and policies in government, the banking, and real estate industries continue to impede access to homeownership for [Black, Indigenous, People of Color (BIPOC)] households today,” the summary explained. “These discriminatory practices negatively affect credit scores, mortgage access, and the general financial security of BIPOC households, such that obtaining homeownership has been, and continues to be, a significant and unacceptable hurdle.”
One such bill is intended to “help people who were affected by racist housing covenants designed to keep ethnic and religious minorities out of certain neighborhoods, as well as their descendants, with down payments and closing costs,” according to previous reporting by the Seattle Times. Sponsors say it’s the first statewide bill of its kind.