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Leland Ware and Theodore J. Davis

Permission Pending: Leland Ware and Theodore J. Davis, Ordinary People in an Extraordinary Time: the Black Middle-class in the Age of Obama, 55 Howard Law Journal 533 (Winter 2012) (380 footnotes omitted).


Conditions for African Americans are different and immeasurably better than they were before the enactment of the Civil Rights laws of the 1960s. At the present, it is almost difficult to imagine the extreme oppression African Americans endured under Jim Crow. In the southern states, schools, restaurants, hotels, theaters, and public transportation were segregated. The separation included elevators, parks, public restrooms, hospitals, drinking fountains, prisons, and places of worship. Whites and blacks were born in separate hospitals, educated in segregated schools, and buried in separate graveyards. Blacks were not allowed to vote in elections. There were, in effect, two criminal justice systems: one for whites and another for blacks. The system was codified in state and local laws and enforced by intimidation and violence. When the color line was breached, violence was unleashed against offenders by the Ku Klux Klan and local whites, often in concert with local law enforcement officials. Lynching and other forms of violence and intimidation were routine. In the North and South, blacks lived in segregated neighborhoods and were relegated to the lowest paying, least desirable occupations.

During the segregation era, however, a small black-middle-class managed to prosper. The roots of this group can be traced back to the antebellum period. Prior to the Civil War, there were house and field slaves in the South and free blacks in the North. The house slaves occupied a higher status and, in many cases, were the mixed-race offspring of slave owners. During the Reconstruction Era and into the early decades of the twentieth century, this mixed-race aristocracy occupied the top rungs of the social hierarchy. After World War I, as southern blacks migrated to urban industrial centers, a new middle-class emerged. This group consisted of small entrepreneurs, educated professionals, and clerical sales workers. Black businesses consisted of barber shops and beauty parlors, dry cleaners, restaurants, grocery stores, and the like. Physicians and dentists occupied a high social status as did other blacks with college degrees. After World War II, the middle-class expanded slowly as blacks in the North found work in unionized occupations that paid better than what they could otherwise have earned.

In the decades that followed the enactment of the Civil Rights laws, the black middle-class has grown rapidly. Levels of educational attainment are higher. Employment opportunities are greater. Family incomes are higher. Over the last twenty years, more African American families have moved to suburban communities than those who headed north during the great migration. The election of Barack Obama as President in 2008 signaled an unprecedented advance in race relations in America. Some heralded it as the beginning of a post-racial era.

As we enter the second decade of the 21st Century, an examination of the status of African American families reveals a mixed picture; the best of times for some, the worst of times for others. For those in a position to take advantage of the opportunities created by the Civil Rights revolution, the gains over the last generation have been remarkable. For those left behind in America's impoverished communities, the obstacles to advancement are more daunting today than they were a generation ago. They continue to be plagued by the many issues arising from poverty and residential segregation.

Conditions are only marginally better for lower-middle-class African Americans. For this group, wealth building has been difficult, and the current recession halted many of the gains that had previously been made. Middle-class blacks earn less than their white counterparts. Their average net worth is much lower than middle-class whites. African Americans have moved to suburban communities, but many reside in areas that are less affluent than white middle-class communities. All homeowners have been hammered by housing crisis, but black homeowners have fared far worse than whites.

This Article will evaluate the progress and current conditions of middle-class African American families, a group that has received far less academic attention than low-income families. Part I discusses the diversity in attitudes among African Americans along class lines explaining that they are not a homogenous group. Blacks are increasingly becoming geographically dispersed with different interests, competing claims, and little reason to identify with one another. Part II shows the substantial gains in educational attainment levels among blacks that have occurred since 1970. The next section delineates the advancement in occupational attainment levels over the last forty years. Part III shows that black family incomes have risen steadily since 1970. Part IV shows that the gains have not been evenly distributed; there are significant income disparities among blacks.

The next section examines the history and continuing problems caused by residential segregation. Until the late 1960s, the real estate industry, backed by the federal government, did everything it could to keep blacks out of suburban communities leaving a legacy that continues to haunt us. Parts VI and VII show that while integration has increased, levels of residential segregation remain high, especially in the ghetto belt located in Northeast and Midwest. Parts VIII and IX examine the movement of black families to suburban communities and, in some cases, electing to reside in all-black, upscale suburban neighborhoods. The final section shows how the housing crisis and the economic recession have had a devastating effect on the black middle-class.


Over the last twenty-five years, African Americans have been slowly dividing into three socioeconomic groups: one that is low-income, another with modest means, and a growing segment that is very affluent. Divisions in the attitudes and values of African Americans are growing along class lines. These divisions were highlighted in a 2007 survey conducted by the Pew Research Center, Blacks See Growing Values Gap Between Poor and Middle-class. The researchers documented the attitudes of African Americans on a range of issues. By a ratio of two-to-one, the respondents said the values of poor and middle-class blacks had grown more dissimilar over the past decade. Twenty-three percent of the respondents said middle-class and poor blacks share a lot of values in common. 42% said they had some values in common; 22% said they share only a little in common, and 9% said they shared almost no values. On the question of racial identity a significant minority, 37% said that blacks should no longer be seen as a single race. Only a slim majority, 53%, reported that it is still appropriate to view blacks as single race.

The diversity among African Americans' attitudes toward interaction with whites is illustrated in Professor Elijah Anderson's book, The Cosmopolitan Canopy. Anderson explained how individuals with different racial, gender, and ethnic backgrounds interact in public spaces. In the course of his analysis, Anderson describes the orientations of two groups of African Americans: ethnocentrics and cosmopolitans. Ethnocentrics view cross-racial contacts with deep suspicion. They consider most whites to be racist and remain vigilant for evidence of racial slights and other forms of discrimination. Ethnocentrics are defined by loyalty to their own group. They do not socialize with whites. Their attitudes are associated with working and lower-class blacks and are produced by years of social isolation in segregated neighborhoods.

Blacks with a cosmopolitan perspective tend to be more educated than ethnocentrics. They are usually middle to upper-middle-class. Cosmopolitans are more generous in their interpretations of the actions of whites and acknowledge the progress made in race relations. They are more accepting of people who are different from themselves. They are willing to give whites the benefit of the doubt in their interactions with them. They tend to live in integrated neighborhoods and socialize comfortably in black and white circles.

In a commentary on the differences among blacks, Disintegration: The Splintering of Black America, Eugene Robinson divided African Americans into four subgroups. One group is the Transcendent Elite, a small group of African Americans that reside in a world of wealth, power and influence. Examples of this group include the Obamas, Oprah Winfrey, Beyoncé, Kobe Bryant, and Vernon Jordan. Another group, the Mainstream Middle-class, represents the majority of black Americans who own their homes, are gainfully employed in a range of occupations, and live what some might consider the American Dream. There is another group, The Emergents, consisting of mixed-race families and recent immigrants from Africa and the Caribbean. Finally, there is The Abandoned, a large and growing underclass of impoverished, racially isolated families concentrated in America's inner cities. These four groups are geographically dispersed. They have different interests, competing claims, and little reason to identify with one another.

Today's black middle-class occupies an awkward position between poor and working class blacks and the white middle-class. Upper-middle-class African Americans' material success sets them apart from the rest of the black community. They can be recognized by their bearing, grooming, and dress. They purchase the best they can afford in homes, cars, clothes, and furnishings. The vast majority of this group takes pains to present themselves as respectable individuals. They maintain cultural and class distinction between themselves and other blacks although they occasionally visit the hood to purchase soul food or to visit an acquaintance.

Middle-class blacks take careful note of welcome signs in integrated social settings. They gravitate to restaurants and nightclubs where upscale blacks tend to congregate to relieve the stress they experience at work and in other integrated settings. They work hard to avoid being confused with their lower-class counterparts. Middle-class blacks are aware of how society views poorer members of their race, and they privately share some of those sentiments. Unlike the urban underclass, the black middle-class lives in a world filled with options. They are not restricted in the ways their forbears were by segregation. They are members of not just a race, but also an affluent, economic class. This Article is focused largely on the conditions of the group Robinson identified as the Mainstream Middle-class, the group with incomes above the poverty and working poor levels and below levels of the wealthy entertainers, athletes and entrepreneurs that constitute the Transcendent Elite.


Defining the middle-class has never been an easy task for social scientists. Over the years, scholars have used education, occupation, income, and home ownership as the primary measures of socioeconomic stratification. The advances in African Americans' educational attainment levels since World War II have been significant. In 1940, the vast majority of blacks (92.3%) had completed less than 4 years of high school. Only 6.4% had completed high school and 1.3% of the black population had completed four or more years of college. As shown in Graph 1, by 1970, the proportion of blacks 25 years and older with less than 12 years of school had declined by 26%.

Graph 1

Educational Attainment Levels of Blacks 25 Years and Older: 1970-2010


Source: U.S. Census Bureau, % of People 25 Years and Over Who Have Completed High School or College, by Race, Hispanic Origin and Sex: Selected Years 1940 to 2010, tbl. A-2 (2010), http://

By 2010, the percentage of blacks (25 years and older) with less than 12 years of school had declined to 15.8% from a high of 66.3% in 1970. It is not surprising that the decades with the largest decline in the proportion of blacks with less than 12 years of school were the 1970s (dropping by 17.5%) followed by the 1980s (declining by 15%). The 20 year decline between 1970 and 1990 was 32.5% compared to only 18% between 1990 and 2010. Despite the decline, in 2010, the percentage of blacks with less than 12 years of school was still relatively high at 15.8% when compared to 7.9% for non-Hispanic whites. The proportion of blacks in the moderate education group (4 years of high school and some college) rose from 29.2% in 1970 to 64.4% in 2010. The largest increase in this group occurred between 1970 and 1995, increasing by 31.4 percentage points. Since 1995, the proportion of blacks with 4 years of high school and some college has increased by only 3.8%.

Among black high school graduates in 1970, only 4.5% had 16 or more years of education. However, during the 1970s, many young African Americans took advantage of new opportunities consisting of governmental grants, low-interest education loans, and increased scholarship opportunities from institutions of higher learning, anxious to recruit black students. By 1980, the proportion of college educated African Americans had increased to 7.9%. During the 1980s, the growth in the proportion of the black population with 16 or more years of education equaled the advances that occurred of 3.4% during the 1970s. By 1990, the proportion of blacks with 16 or more years of schooling had increased to 11.3%. The largest increase in the proportion of blacks with 4 or more years of college occurred during the 1990s when the proportion of blacks with 16 or more years of education grew by 5.3 percentage points to 16.5%. Although the proportion of black college graduates continued to increase during the 2000s, the growth rate of 3.3% was slightly lower than it was in earlier decades.

Despite what appears to be a leveling off of blacks' educational attainment during the 2000s, there are two things worth noting. First, blacks experienced a significant increase in their educational attainment levels during the 40-year period between 1970 and 2010. This is especially significant since educational attainment is a key contributor to the rise in and indicator of the size of new black middle-class. Second, despite improvements in blacks' educational attainment, they still lagged behind whites. For example, in 2010, the gap between black and white college graduates was 13.4%.


During the first half of the twentieth century, blacks abandoned the fields of the agrarian South and found employment in factories in the industrializing North and Midwest. As the discussion in this sections shows, over the last 40 years, jobs have moved from factory floors to retail outlets and office suites. In 2010, 29% of employed blacks were employed in management, professional, or related occupations. An additional 25% were employed in sales or office occupations. Another 25% were employed in service occupations (such as food and beverage preparation, lodging, cosmetology, recreation, protection, personal services, etc.), and these occupations required modest educational attainment levels and afforded a moderate income.

We divided black workers into white- and blue-collar categories based on the Standard Occupational Classification System used to organize workers into occupational categories. White-collar occupations are defined as those who administer, supervise, or perform work that come in part under these groups and usually include managerial, professional, technical, sales, clerical, and other administrative support positions. White-collar occupations are knowledge based jobs involving little manual labor. Approximately half of the black population is now employed in white collar jobs. In 1972, only 34.8% of black workers were employed in white-collar occupations as shown in Graph 2. By 2006, the proportion of blacks employed in white-collar positions had increased to 49.5%. This was a 14.7% increase over the 34-year period. During the decade of the 1970s, the proportion of blacks in white-collar positions only grew by 3.8%. During the 1980s, the proportion of blacks employed in white-collar positions grew by 7.3%. During the 1990s, it grew by 5.9%, but it declined by 2.3% from 2000 to 2006.

Graph 2

Changes in Occupational Classifications: 1972-2006

Source: James A. Davis, Tom W. Smith, & Peter V. Marsden, General Social Surveys, 1972-2006, Roper Center for Public Opinion Research, University of Connecticut/Ann Arbor, MI: Inter-university Consortium for Political and Social Research (Apr. 12, 2009).

During the 1970s, the proportion of blacks employed in blue-collar occupations declined by 5%, and it further declined by 7.3 percentage points in the 1980s. The largest decline in the proportion of blacks employed in blue-collar positions took place in the mid-to-late 1980s. Between 1982 and 1990, the proportion of blacks employed in blue-collar occupations decreased from 63.1% to 54.1% (or 9 percentage points). During the 1990s, it declined by 8 percentage points, however the decades of the 2000s witnessed a 3% increase in the number of blacks employed in blue-collar occupations. Since 2000, the proportion of blacks employed in blue-collar and white-collar positions has been approximately fifty/fifty.

Changes in African American occupational characteristics can be seen from another perspective when white-collar classifications are divided into upper and lower categories. In 1972, 34.8% of all employed blacks were in white collar occupations. By 2006, the figure had risen to 49.5%. In 1972, 21.8 % of all employed blacks worked in upper white-collar occupations with 13% in lower-white collar occupations as shown in Graph 2. In 2006, approximately 26% of all black, white-collar workers were employed in upper white-collar occupations. The proportion of blacks employed in lower, white-collar occupations increased since 1972 from 13% to 23.5 in 2006. The proportion of blacks in upper- and lower-white-collar occupations has declined since 2000. The proportion of African Americans in lower-white-collar occupations declined from a high of 28.2% in 2002 to 23.5% in 2006. The proportion of blacks in upper-white-collar occupations declined from a high of 29.4% in 2000 to 26% in 2006.

Although blacks have made substantial advances in occupational classifications, they still lag behind whites in proportion to their population employed in white-collar occupations. In 1972, the difference in the proportion of blacks and whites employed in white-collar occupations was 22.5%. By 2006, the difference was down to 12.9%. The proportion of whites employed in white-collar occupations increased slightly from 57.3% in 1972 to 62.4% in 2006. These significant changes have contributed to a rise in the size of the black middle-class. However, much of the change in blacks' occupational classifications can be attributed to the change in the nature of work since the 1970s. Agricultural and many of the lower-blue collar and manufacturing jobs have declined, and many blacks have been left unemployed, underemployed, or employed in lower level white-collar positions.


The average family incomes of African Americans have increased significantly over the last 40 years. Describing the economic status of the black middle-class in the 1950s, E. Franklin Frazier wrote:

In 1949, the median income of Negro families in the United States was $1,665, or 51 percent of the median income of white families, which was $3,232. Only 16 percent of the Negro families as compared to 55 percent of the white families had incomes of $3,000 or more . . . . For the country as a whole, the incomes of members of the black bourgeoisie range from between $2,000 and $2,500 and upward. The majority of their incomes do not amount to as much as $4,000. In fact, scarcely more than one percent of all the Negroes in the country have an income amounting to $4,000 and only one-half of one percent of them has an income of $5,000 or more.

The data provides ample proof of a growing black middle-class after the late 1960s. For the purposes of this Article, black families were divided into three income groups based on constant 2009 dollars. For purposes of this study, the lower-income group consisted of families with incomes under $49,999, which was $10,089 less than or 83% of the national median. The moderate-income group consisted of families with annual incomes between $50,000 and $99,999. The upper-income group included families with annual incomes above $100,000.

In 1970, the proportion of black families in the lower income category was 76%; by 2009, this had declined to 61% as shown in Graph 3. Since 1970, the proportion of black families in the lower-income category has declined by an average of 5.3% per decade with the exception of the 2000s. The greatest decline in the percent of blacks in the lower-income group occurred during the 1990s, when there was an 8% drop in the percent of blacks in the lower-income group. Despite the overall decline in the percentage of blacks in the lower-income group since the 1970s, between 2000 and 2009, the proportion of blacks in the lower-income category increased by 3% points.

Graph 3

Distribution of Black Families by Income: 1970-2009


Source: U.S. Census Bureau, Families by Total Money Income, Race, and Hispanic Origin of Householder: 1967 to 2009 tbl. F-23 (2010), available at 2010.xls

The change in the proportion of black families in the moderate-income category between 1970 and 2009 was not as great as the changes among black families in the lower- and upper-income groups. In 1970, only 22% of black families were in the moderate-income group. By 2009, the proportion of families in the moderate-income group had increased to 27%. Since 1970, the proportion of black families in the middle-income group increased by roughly 3 percent per decade. However, since 2000, the proportion of black families in the moderate-income group declined by 2% from 29 to 27%.

In 1970, only 2.4% of the black families were in the higher-income category. By 2009, the proportion of black families in this category had increased to 12.1%. The largest increase in the proportion of blacks in the upper income category occurred during the 1980s and 1990s. During the 1980s, the proportion of black families in the upper-income category rose by 3.6%. Throughout the 1990s, the percentage of blacks in the upper-income category rose by 4.6%. However, the 2000s witnessed a decrease of 0.6% (or no significant change) in the amount of blacks in the upper-income category.

Thus, since 1970, there has been a steady expansion in the proportion of black families in the upper-income category (up by 9.7%) and a substantial decrease in the proportion of black families in the lower-income group (down by 15%). The percentage of black families in the moderate income category has changed by only 5 percentage points since the 1970s. Nevertheless, in spite of significant improvements in the percent of blacks in the moderate- and upper-income group and the decline in the percentage in the lower-income group, over half of black families still have annual incomes that are less than $50,000. While the proportion of blacks in the moderate- and upper-income groups increased steadily between the 1980s and 1990s, these changes appeared to have leveled off for all three groups during the 2000s.

If we combine the moderate- and upper-income groups to garner an estimate of the proportion of the black population that would represent the middle-class group, we would see that there has been a significant expansion in the size of this group as shown in Graph 4. During the 1970s, the estimated proportion of families in this group increased by 4.9%. During the decade of the 1980s, it increased by 5.1% and by another 7.3% during the 1990s. However, during the 2000s, the estimated proportional size of the black families in the middle-class decreased by 2.6%.

Graph 4

Proportion of Families with Incomes Above $50,000 by Race: 1970-2009

Source: U.S. Census Bureau, Families by Total Money Income, Race, and Hispanic Origin of Householder: 1967 to 2009 tbl. F-23 (2010), available at 2010.xls

In spite of significant improvements, the median income of black families is still less than two-thirds the income of white families. In 1970, the median income for black families was $29,921 (in constant 2009 dollars) compared to $48,777 for white families. By 2009, the median income for black families had increased to $38,409 compared to $62,545 for white families. This meant that, in 1970 and 2009, for every one dollar earned by a white family, a black family earned sixty-one cents. In essence, there has been no measurable change in the black/white income ratio since 1970. The black family/white family income ratio did get as small as 0.64 (or to put it another way, the average black family earned 64 cents for every dollar earned by the average white family) in 2000.

Despite a significant rise in the proportion of black families in the moderate- and upper-income groups, the proportion of black families in these income groups in 2009 was still more than twenty percentage points smaller than that of white families as shown in Graph 4. However, it should be noted that between 1970 and 2000, the proportion of black families in the middle-to upper-income groups increased at a faster rate than the proportion of white families. During this 30-year period, the proportion of white families in the middle-income group increased by 13.8%, while the percentage of black families in this group grew by 17.3%.

During the 2000s, both percentages of black and white families in the moderate- and upper-income groups have declined roughly 2%. Nevertheless, according to a PEW Research Center Report, the median wealth of white households was 20 times that of black households, and this was the largest gap between the two groups in over 25 years. Some of the income and wealth disparities between blacks and whites can be attributed to the high proportion of blacks clustered into lower-level white collar occupations (such as sales and clerical), while middle-class whites tend to be evenly split between higher level occupations (professionals and managers) and lower level jobs. Another socioeconomic reality that impedes the wealth development of middle-class blacks is their relationships with family and friends. A large proportion of the black middle-class is first or second generation. They are more likely to have grown up poor and are likely to have siblings or other family members and friends who are poor. Middle-class blacks are more likely to provide financial assistance to their relatives which interferes with their wealth accumulation.


The opportunities made available by civil rights legislation of the 1960s have not been evenly distributed. Some blacks financially are much better off than others. This has resulted in a population that is increasingly segmented by income. The blacks that prospered as a result of civil rights advances are in a much higher socioeconomic position than their forbears. The more prosperous blacks are often better educated, they have more occupational opportunities, and enjoy a higher standard of living in comparison to the less affluent blacks. Not surprisingly, affluent blacks receive a greater proportion of the income of blacks as a group.

As previously mentioned, the proportion of black families in the higher-income group (over $100,000 annual income) grew from 2.4% in 1970 to 12.1% in 2009. While a significant proportion of black families are financially prosperous, a larger proportion continues to struggle financially contributing to economic disparities among blacks.

One way of assessing the growing economic disparities is by examining the distribution of income within the black population. Populations are often divided into quintiles, and the aggregate income received by each group is then determined. Graph 5 shows changes in the uneven distribution of income among blacks over time. In 1970, the top 20% of black households accounted for only 43.1% of the all of the black household income during that year. By 2009, the top 20% of black households received half of the income received by black households that year. Among black households, the top 20% of black households was the only quintile that saw an increase in its share of income received over the past 40 years. In 1970, the top 5% of the black households received 15.2% of all the income received by black households that year. By 2009, the proportion of the income received by this group had increased to 21.3%. The bottom 20% of black households earned an average of $8,131, the second quintile earned an average of $23,128, and the top 5% earned an average of $225,392 in 2009.

Graph 5

Growing Economic Disparities Among Black Families Based on Shared Aggregate Income


Source: U.S. Census Bureau, Mean Income Received by Each Fifth and Top 5% of Black Families: 1966 to 2009, tbl. F-3 (2010). This information is derived from the U.S. Census Bureau, Current Population Survey, Annual Social and Economic Supplements. For information on confidentiality protection, sampling error, nonsampling error, and definitions, see[PDF].

While the proportion of the income received by the top 20% of black families has increased steadily since 1970, the proportion of income received by the middle 40% (third and fourth quintiles) and bottom 40% (or two lower quintiles) has declined. The proportion of the income received by the middle-income group declined from 41.7% in 1970 to 38.2% in 2009. In 1970, the bottom 40% received 15.2% of all of the income received by black families that year. By 2009, the average share of income of the bottom 40% declined by 3.4% to 11.8%. Researchers predict that 65% of blacks who start in the bottom half of the income distribution will not improve their economic status.


Homeownership is another indicator of the economic disparities among blacks. Perhaps equally important, it is a gauge that can be used to measure the continuing significance of race in the accumulation of wealth. As shown in Graph 6, since 1994 there has been an increase in black home ownership. Between 1994 and 2003, the proportion of black homeowners increased from 42.6% to a record high of 49.4%. From 2003 to 2010, however, the proportion of black homeowners declined to 44.9%. Much of black home ownership resulted from whites moving to the suburbs and blacks purchasing older homes in central cities or as in recent years sub-suburban communities.

Graph 6

Blacks' Homeownership Rates: 1994-2010


Source: U.S. Census Bureau, Homeownership Rates by Race and Ethnicity of Householder: 1994 to Present (2010). This information is derived from the Current Population Survey/Housing Vacancy Survey, Series H-111

Residential segregation has long been a formidable barrier to black progress and the accumulation of wealth. When northern and midwestern cities began to industrialize at the beginning of the twentieth century, thousands of African American families migrated from the rural South to cities in the Northeast and the Midwest. They joined the thousands of immigrants from Western Europe to provide the labor needed for a rapidly industrializing economy. When they arrived in urban communities, black migrants encountered many residential obstacles. Municipal ordinances were enacted that prohibited African Americans from occupying properties except in designated neighborhoods. The ordinances were challenged and declared unconstitutional in a 1917 decision, Buchanan v. Warley.

After Buchanan, the real estate industry devised another tactic, racially restrictive covenants. The covenants were clauses in deeds that prohibited property owners and subsequent purchasers from selling their homes to racial and religious minorities. The Supreme Court implicitly endorsed the covenants in a 1926 decision, Corrigan v. Buckley. The Fourteenth Amendment applies only to state action which consists of actions taken by state and local governments. The Court declined to decide the merits of Corrigan on jurisdictional grounds, but it issued an opinion that stated the Fourteenth Amendment did not prohibit private parties from controlling the use and disposition of their property.

As the migration from field to factory continued, an already severe housing shortage for African Americans grew worse. Blacks were shoehorned into existing ghettos that expanded as whites moved out of adjacent neighborhoods. In the 1940s, the National Association for the Advancement of Colored People (NAACP) launched a litigation campaign that challenged restrictive covenants. In 1948, the Supreme Court held in Shelley v. Kraemer that restrictive covenants were private arrangements, but the judicial enforcement of discriminatory agreements constituted state action that violated the Fourteenth Amendment. After Shelley, the covenants could not be enforced. This was an important victory for the NAACP, but it did not end discrimination in the nation's housing markets.

The federal government played a critical role in the institutionalization of discrimination and the perpetuation of segregation. The modern American middle-class emerged during the post-World War II era. Before the war, working class whites lived in ethnic enclaves in cities or in small towns and rural communities. The 1944 G.I. Bill provided returning veterans with financial assistance for college, businesses, and home mortgages. Millions of servicemen were able to afford homes for the first time. In 1947, real estate developer William Levitt purchased 4,000 acres of Long Island, New York farmland and converted it into the largest privately planned community in American history. Similar suburban communities were constructed in metropolitan regions across the nation. Residential construction rose from 114,000 new homes in 1944 to 1.7 million by 1950. All of this was facilitated by the introduction of fixed-rate, 30-year mortgages insured by the Veterans Administration and Federal Housing Authority (FHA).

Blacks were excluded from post-war suburbanization. The Home Owners' Loan Corporation (HOLC), a federal agency established during the 1930s depression, fostered residential segregation through redlining. Land economists believed that property values were closely linked to the racial composition of neighborhoods. The HOLC rated every urban and suburban neighborhood in America A, B, C, or D using color coded maps. The lowest quality rating, D, was colored red. Neighborhoods rated A had to be homogenous and occupied by the families of business and professional men who were white and usually native-born. Neighborhoods in which blacks resided were rated D and coded red. Lenders were discouraged from making loans in neighborhood that were redlined.

The FHA used HOLC's system to develop criteria for selecting the mortgages it would insure. The FHA's underwriting standards reflected the model of neighborhood change developed by economist Homer Hoyt. In his influential 1939 book, The Structure and Growth of Residential Neighborhoods in American Cities, Hoyt described the patterns of development residential neighborhoods according to the succession theory of neighborhood change. Under the succession theory of urban development, ethnic and racial groups entering a new area settle in older neighborhoods until they achieve economic parity with more affluent groups. As the newer group becomes economically successful, it moves out to a better residential area. With continued immigration, new ethnic groups settle in the older neighborhoods replacing those who moved on. This pattern continues, creating a succession of groups moving through the neighborhoods over time.

In this invasion-succession model, newly constructed neighborhoods were occupied by white families. Over time, the neighborhood transitioned from white Protestant to Jewish and finally black as the housing stock grew older and began to deteriorate. The FHA assigned every neighborhood a place somewhere along this continuum. FHA's Underwriting Manual warned lenders that neighborhoods could retain their values only if the properties were occupied by the same social classes and racial groups. The agency urged the use of restrictive covenants to maintain neighborhood stability.

After the decision in Shelley, the FHA made some cosmetic changes to its Underwriting Manual and removed the explicit references to race. However, the Manual continued to warn against the introduction of adverse influences that would diminish desirability or lower property values. Local real estate boards warned members not to be instrumental in introducing elements into a neighborhoods that would be detrimental to the property values and explicitly included blacks among the undesirable elements. Real estate publications used in college and university courses and by practicing realtors continued to urge segregating inharmonious populations. Revised editions of Hoyt's Principles of Urban Real Estate toned down some of its racial references but did not abandon its message that white neighborhoods needed protection from inharmonious groups. From the 1940s though the late 1960s, federal housing policies barred African Americans from the largest wealth-producing program in American history: single family, suburban homes purchased with federally insured mortgages.


The Fair Housing Act of 1968 prohibited discrimination based upon race, color, religion, sex, and national origin in connection with the sale or rental of residential housing. Not long after the enactment of the 1968 legislation, however, fair housing advocates recognized the shortcomings of the statute. The original administrative enforcement mechanism was limited to conciliation, a process encouraging voluntary compliance that the real estate industry largely ignored. Congress eventually became aware of these failings. In 1988, a comprehensive overhaul of the Fair Housing Act was enacted. Despite the enhanced enforcement mechanisms that the 1988 Amendments added, discriminatory practices are pervasive in the nation's housing markets. African American families do not enjoy the residential options that are available to white families with similar incomes and credit histories.

A Department of Housing and Urban Development (HUD) report, based on data derived from matched pair tests conducted over several months, found that African American homebuyers and renters continue to encounter discrimination in the nation's housing markets. White homebuyers were favored over blacks in 17% of tests. White homebuyers were more likely to be allowed to inspect houses and to be shown homes in more predominantly white neighborhoods than similarly situated blacks. Whites also received more information about financing than comparable black homebuyers.

In a 2002 survey, researchers found that while housing discrimination declined, it still exists at high levels. In rental and sales markets in metropolitan areas nationwide, black and Hispanic home seekers experienced significant levels of adverse treatment, compared to similarly situated white homes seekers. The extent to which whites were consistently favored over blacks was 17%. Blacks experienced adverse treatment, compared to equally qualified whites, about half the times that they visited real estate or rental offices to inquire about the availability of housing advertised in the major metropolitan newspaper.

Showing black and white buyers homes in different neighborhoods is referred to as steering. It is driven by real estate agents' assumption that whites will not want to live in neighborhoods with more than a token number of minority residents. This unlawful practice is widespread and researchers have found that real estate agents are now using schools as a proxy for race. White home seekers were discouraged from considering homes in racially mixed neighborhoods on the grounds that the local schools were bad. This was a coded message which meant the schools had high minority enrollments. The researchers also found that neighborhoods from which whites were steered were recommended favorably to African American and Latino purchasers.

Studies have consistently shown that whites will desert neighborhoods when they reach a tipping point and become too black. This was confirmed more recently in Tipping and the Dynamics of Segregation, where the authors found strong evidence that white flight occurred in most cities when neighborhoods reached tipping points ranging from 5% to 20% minority populations. In Dynamic Models of Segregation, Thomas Schelling showed that extreme segregation can arise from social interactions and white preferences.

White flight is fueled by the perception that the presence of African Americans in a neighborhood causes property values to decline. This belief is driven by stereotypes, overt bias, and unconscious discrimination. Polling data indicates that most whites believe residential segregation reflects the preferences of African Americans. However, the empirical evidence rebuts these claims. Kryson and Farley found that African Americans prefer mixed communities in which the racial balance is 50% white and 50% black.

A great deal of progress has been made over the last 40 years, but high levels of residential segregation persist. A study using census data from 2005-2009 determined that progress toward housing integration came to a halt during the first decade of the 21st century. The data showed that the average white person lives in a neighborhood that is 77% white. The average African American resides in a neighborhood that is majority black. African Americans are the most segregated minority, followed by Hispanics and Asians.

Social scientists measure neighborhood segregation using an index of dissimilarity. This calculates how evenly different racial groups are distributed across metropolitan areas. The lowest possible value, zero, indicates that the percentage of each racial group in every neighborhood is the same as their overall percentage in the metropolitan area. For example, if African Americans constitute 20% of the population in a metropolitan area, a zero on the index means blacks are 20% of the population in each neighborhood. The highest value, 100, indicates that racial groups reside in completely different neighborhoods.

An index of 60 or higher denotes high levels of segregation. A neighborhood with an index of 30 or lower is considered integrated. By this measure, black-white segregation averaged 65.2 in 2000 and 62.7 in 2009. Hispanic-white segregation was 51.6 in 2000 and is currently 50. Asian-white segregation has grown from 42.1 to 45.9. This was a nationwide measure. The levels of segregation in many of America's largest cities are much higher.


Between 1970 and 1995, 7 million blacks moved to suburban communities. This number is considerably larger than the 4.5 million blacks who moved from the South to the North during the great migration that took place during the first half of the 20th century. The movement of middle-class blacks to suburban communities has contributed to cultural and spatial divisions within the black population. In the mid-1970s, more than 60% of blacks lived in cities in which the population was greater than 50,000. Only 7.3% of the African American population lived in suburban communities. By the mid-2000s, the proportion of blacks living in suburban areas increased to nearly 30%. The numbers living in cities declined to approximately 30%.

However, many suburban blacks live in older, inner-ring suburbs that are less affluent, less white, and have higher levels of crime and social disorganization than suburban communities where comparable whites reside. Blacks live in neighborhoods that are, on average, 15 to 20% less affluent than other groups with a comparable status. Middle-class and affluent blacks in the most segregated U.S. cities live in areas with substantially more whites than their poor, inner-city counterparts. The suburban areas where middle-class and affluent blacks live are significantly less white and less affluent than their white counterparts.

Despite increased economic opportunities and Fair Housing laws, there are still high levels of residential segregation. Middle-class blacks who live in racially mixed neighborhoods tend to have higher levels of education and income than their white neighbors. However, blacks in the higher socioeconomic category (those in the top fifth) were more integrated than blacks in lower socioeconomic categories. Blacks in the higher income category have more white neighbors, fewer poor neighbors, and they reside in neighborhoods with higher housing values.

In Black Picket Fences, Patillo-McCoy studied a black, middle-class neighborhood located adjacent to the south side of Chicago. Her book chronicles the evolution of Groveland a fictional name for a neighborhood that Patillo-McCoy studied for three and one-half years. Her focus was the interplay between race, class, and structural inequality in black communities. As blacks entered Groveland during the 1950s and 60s, whites quietly moved out. Within a few years the neighborhood became entirely black. The residents were a mix of college educated professionals and unionized factory workers with good salaries and benefits. Some of the men worked two jobs to support their families. The residents maintained their homes and manicured their lawns. They attended neighborhood churches and created civic and social organizations for themselves and their children.

As time went on, the neighborhood took on a black identity. As white merchants moved out, black entrepreneurs moved in. At the intersection of one of the main thoroughfares in Groveland, one corner was occupied by a branch of a Chicago bank that served that neighborhood's more affluent residents. Across the street, a check cashing service catered to lower-income residents. Another corner was occupied by a black-owned service station. A soul food restaurant was located on the other corner.

As the children of the Grovelanders grew up, many were unable to replicate their parents' middle-class status. Some did not attend college at all. Others enrolled, but dropped out before finishing. Several second generation Grovelanders continued to reside in the parents' homes into their adulthood. Some of the young women bore children out of wedlock. Others returned to their parent's homes with children after divorcing their spouses; intergenerational households were not uncommon.

The high-paying factory jobs that supported the pioneering black families slowly disappeared as a result of automation and globalization. When the second generation Grovelanders' inherited their deceased parents' homes, some could not afford to maintain them. Some of the homes fell into a state of disrepair. Others were rented to outsiders; some of the second generation residents were lured into the world of drug and crime. Their presence was tolerated because the neighbors had known them as children. Eventually the neighborhood became the home of one Chicago's most notorious gangs. In the end, Groveland became a mix of middle, working class, and low-income occupants. It was not as crime-ridden and impoverished as most of Chicago's inner city neighborhoods, but it was not like white, middle-class communities.


There are upscale, all black neighborhoods in Dekalb County, Georgia (which is adjacent to Atlanta) and Dade County, Florida and in neighborhoods north and west of St. Louis, Missouri and Atlanta, Georgia, which have a large and rapidly growing middle- and upper-middle income African American community. For more than a century, the colleges in the Atlanta university system have produced generation after generation of highly educated African Americans. Economic institutions such as black-owned banks and other business establishments have long been pillars of Atlanta's African American community. In Cascade Heights, an upscale, African American neighborhood in Atlanta, developers constructed a gated community in which the price of homes is just under a million dollars. There are similar enclaves of affluence in other metropolitan regions.

In The Failures of Integration, Professor Sheryll Cashin examined neighborhoods located in Prince Georges County, Maryland (a Washington, D.C. suburb). One of these was a gated, 350 acre development that contained trophy homes with three-car garages, vaulted ceilings, glass encased foyers and elaborate entryways with Doric columns. Unlike the neighborhood in Black Picket Fences in which black homeowners replaced whites, this development contained newly constructed homes where blacks were the first buyers. The neighborhood's residents are physicians, lawyers, white-collar professionals, high level federal employees, professional athletes, and successful entrepreneurs.

Professor Cashin explained that many upscale blacks choose all black suburbs as a result of integration exhaustion. The black enclaves in which they reside provide a comfortable retreat from the stresses of an integrated workplace. The residents can relax and interact with neighbors who are like them. They do not want to be isolated in a neighborhood in which they would be the only black family. They do not have to fear being racially profiled by police; their expensive cars and clothing are not seen as curiosities. Their neighbors understand the problems that African Americans experience in a society in which race still matters. The residents are members of the same black churches, fraternities, sororities, and other social organizations. They do not need to live next door to whites to experience self-satisfaction or personal fulfillment. Their neighborhoods provide a stimulating and enriching social environment.

In Blue Chip Black, Professor Karyn Lacy examined the black middle-class and identified some socioeconomic divisions. Lacy divided the black-middle-class into three distinct groups: the black lower-middle-class earning less than $50,000; the stable, core black-middle-class earning $50,000 through $99,999; and the elite black-middle-class, earning more than $100,000. She examined two majority black neighborhoods in suburban Prince Georges County and another, mostly white neighborhood in Fairfax, County Virginia.

Lacy concluded that the racial and class composition of a black family's suburban neighborhood shaped the ways in which individuals viewed themselves and the ways in which they interacted with others. She found that structural conditions that maintain housing segregation adversely affect opportunities for the black middle-class, especially those in the middle- and lower-middle-class. However, the socioeconomic characteristics of the group earning more than $100,000 closely resembled their white counterparts.

Despite the affluence of the black residents, there are some conditions that make Prince Georges County different and less desirable than other Maryland and Virginia suburbs. It is adjacent to low-income communities in Washington D.C. and Maryland. It has a higher level of low-income residents than other Washington, D.C. suburbs. The public schools in Prince Georges County have the second lowest test scores in the state of Maryland, ranking the school system just above Baltimore. Compared to other suburban communities in Maryland and Virginia, Prince Georges County has a much higher rate of crime, a higher tax rate, and a lower level of municipal services. High end retailers do not locate to Prince Georges County, and it does not have the restaurants, shopping, and other amenities that would normally be found in an affluent suburban community.


Blacks have been disproportionately affected by the recession. In May of 2011, the black unemployment rate was 16.2%; for whites the unemployment rate was 7.9%.

In 2010, 45.5% of black families owned their homes. This was down from 49.1% in 2005 and much lower than the 71.1% of white families that are homeowners. The decline in home ownership is attributable to the housing crisis which has disproportionately affected African Americans. Part of the problem is historic. For most of the twentieth century, redlining prevented African Americans from obtaining mortgage loans. A recent development, reverse redlining, is essentially the opposite; minority populations are targeted by lenders who provide mortgages with higher fees and costs than loans made to similarly situated white customers. The loans, many of which were made with insufficient regard for the borrowers' ability to make payments, have resulted in defaults, massive foreclosures, and the loss billions of dollars in home equity.

The products that created this problem are subprime mortgages. Prior to the emergence of subprime lending, most mortgage lenders made mainly prime loans to borrowers with incomes and credit histories that indicated they were unlikely to default on their obligations. In the early 1990s, technological advances in automated underwriting allowed lenders to predict with improved accuracy the likelihood that borrowers with blemished credit histories would repay loans. Lenders viewed subprime loans as an attractive product because they were able to charge higher interest rates as compensation for the increased risk of default.

With the introduction of mortgage-backed securities, banks could obtain more funding from outside investors. The process involved pooling financial assets, such as mortgage loans, and issuing securities representing interests in a pool of assets. Pooling prime and subprime mortgages allowed banks to obtain returns that were higher than other investments with similar risks. It was thought that the aggregation of large numbers of prime mortgages and subprime mortgages mitigated the risk of borrower defaults.

The growth in subprime lending began in the early 1990s. By the early 2000s lenders dramatically increased their marketing of these products. There were many types of exotic mortgage products. One example is the 2/28 ARM, which was shorthand for adjustable rate mortgages on which the interest rate was fixed for two years and reset to the interest rate index after the two year teaser rate expired. Borrowers hoped that when interest rates were reset, they could afford the new payments or refinance their existing mortgages based on rising home values.

From 2000 to 2005, housing prices rose dramatically so many borrowers viewed adjustable rate mortgages as a good bet. A steady rise in the value of homes fueled speculation in the nation's housing markets. Inflated housing prices sparked a building boom that rapidly increased the nation's housing supply. In 2006, home values started to decline and by 2008, the United States found itself in a housing crisis. Supply outstripped demand and home values declined for the first time in many decades.

In many cases, borrowers could handle the monthly payments at the teaser rate, but after the new interest rates went into effect, they could not afford the new payment. Declining home prices pushed a record number of borrowers under water, meaning the balances owed on their mortgages were higher than the market value of their homes. An oversupply of homes, declining home values, rising unemployment levels, and other problems significantly decreased the demand for homes. These conditions have resulted in a massive wave of defaults and foreclosures.

African Americans have been disproportionately affected by the housing crisis. In one study, researchers used regression analyses to measure foreclosures in the top one-hundred U.S. metropolitan markets on measures of black, Hispanic, and Asian segregation. They controlled for market conditions, including average creditworthiness, the extent of coverage under the Community Reinvestment Act, the degree of zoning regulation, and the overall rate of subprime lending. They found that black dissimilarity indexes and spatial isolation were powerful predictors of foreclosures across the nation's metropolitan housing markets. The researchers concluded that racial segregation was an important contributing cause of the foreclosure crisis, along with overbuilding, risky lending practices, lax regulation, and the decline in home values.

In Whiteness as Property: Predatory Lending and the Reproduction of Racialized Inequality, the authors examined 2004 data from the Home Mortgage Disclosure Act database to determine racial disparities in lending. They found that African Americans were less likely than whites to receive loans from regulated lenders. They also found that regardless of lender type and income level, African Americans were more likely than whites to receive higher priced loans.

Reverse redlining is at the center of a suit against one of the nation's largest banks. The City of Baltimore (Baltimore or the City) sued Wells Fargo Bank claiming it engaged in reverse redlining practices. The civil action claims, among other things, that a Wells Fargo loan in a predominantly African American neighborhood was nearly four times as likely to result in foreclosure as a Wells Fargo loan in a predominantly white neighborhood. The suit alleges that a disproportionately large percentage of Wells Fargo's high-cost loans in African American neighborhoods were refinance loans indicating a deceptive and predatory practice of encouraging minority borrowers who already had loans to refinance at excessive costs with little benefit. Baltimore contends that this practice increased the likelihood of foreclosure and has contributed to the disproportionately high rate of foreclosures in Baltimore's African American communities.

Baltimore also alleged that Wells Fargo's pricing practices had a disproportionate impact on African American borrowers. It claims that Wells Fargo's African American borrowers and borrowers residing in African American neighborhoods paid more than comparable white residents of predominately white communities. The City also claims that there was a significant disparity in the speed with which Wells Fargo loans in African American and white neighborhoods went into foreclosure. Black homeowners went into foreclosure much faster than whites. The City contends that the disparity in foreclosure timing showed that Wells Fargo engaged in irresponsible underwriting in African American communities.

The suit also alleges that a significant portion of the bank's foreclosures in African American neighborhoods involved unusually risky and deceptive loan products. Baltimore claims that Wells Fargo did not properly underwrite loans made to African Americans and did not adequately consider the borrowers' ability to repay the loans. The loans resulted in default and foreclosure for many African American borrowers, a result that should have been anticipated at the time the loans were made.

Baltimore also contends that the use of risky, adjustable rate mortgage products subjected African American borrowers to unfair and deceptive loan terms and has contributed significantly to the high rate of foreclosures in Baltimore's African American neighborhoods. If Baltimore prevails, the case will provide an example of one of the largest banks in America systematically discriminating against African Americans and other minorities.

The housing crisis has been devastating for African Americans. A PEW Research Center Report stated the median wealth of white households was twenty times that of black household, and this was the largest gap between the two groups in over twenty-five years. Researchers at the Center for Responsible Lending found that African Americans are 47% more likely to be facing foreclosure than whites. 11% of African American homeowners have already lost or are likely to lose their homes compared to 7% of whites. The researchers estimated that the lost equity resulting from lower property value will, between 2009 and 2012, cost African Americans $194 billion. The questionable lending practices were not limited to minorities. Millions of white homeowners were adversely affected. The scope of the damage is massive, and it inflicted injuries that threatened the entire American economy. It will likely take years for this sector of the nation's economy to recover.


The black middle-class has benefitted from the opportunities created by the civil rights laws of the 1960s. Over the last generation, there have been significant advances in their educational attainment levels, occupational classifications and family incomes. The proportion of blacks who are middle-class has grown significantly. However, our analysis also shows that despite its remarkable advances, the black middle-class still lags behind its white counterpart. In 2009, the wealth ratios between blacks and whites were the largest since the government began publishing this data in the 1980s.

African Americans are segmenting along class lines. Middle-class blacks have moved to suburban communities in significant numbers. Educated, upper-middle-class African Americans residing in suburban communities have little in common with their impoverished, inner city counterparts. Some middle-class blacks reside in upscale, all black communities that are not adjacent to low-income neighborhoods. They live comfortably among people like them and do so as a matter of personal choice. However, black families with incomes under $100,000 tend to live in inner-ring suburbs that were formerly white neighborhoods. These are often contiguous to low-income communities. This proximity means that they are exposed to the deleterious conditions that plague inner city communities.

The most significant impediment to black progress is the high levels of discrimination and segregation that persist in the nation's housing markets. This impairs wealth building since a home is usually a family's most valuable asset. Segregation adversely affects living conditions. Educational opportunities are limited as public schools in segregated neighborhoods invariably lack the quality of schools in white suburban communities. This is also the case for upscale, all black enclaves, which tend to be located in school districts where student test scores are lower and higher end goods and services are scarce. The current trends indicate that the black middle-class will continue to grow. Some have achieved socioeconomic parity with their white counterparts, but most others will continue to lag behind.


. Leland Ware, Louis L. Redding Professor of Law & Public Policy, University of Delaware

.Theodore J. Davis, Jr. Ph.D., Associate Professor of Political Science and International Relations, University of Delaware.