Investors targeting historically minority neighborhoods

Your Questions Answered

At Ashlar, I firmly b that an educated home buyer or seller is best equipped to make their own decisions. That’s why I take time out of my day each and every day to answer someone’s real estate question.  And, when I think the answer can be useful to you as well, I share it here.  So without further ado:


Why do investors target minority neighborhoods?

While investors’ decision-making process is mostly money-related, not race-related (though I’ve certainly met a few investors/flippers with disdain for the neighborhood and original owners the worked in)…

This is the unfortunate result of decade after decade after decade of neglect and active discrimination.

Real estate moves and changes slowly, so much of this is fallout from decisions both by real estate professionals, city planners, and lenders in the 1900s – 1970s.

Read about blockbusting, steering, and redlining for just a sample of the discriminatory practices that have plagued the real estate industry and were sorta corrected by the Fair Housing Act of 1968. I say sort of because it did make those practices illegal but I can tell you I see textbook violations regularly (as in every week or two).

There have also been recent reports of racial bias with appraisers, where they produce lower appraised values if the appraiser believes it is owned by a person of color.

The sad part is that there is not necessarily an easy fix. I can say that investors are currently buying anything they can get at a decent price no matter the location, but this statistic is the result of a long term starving on an entire segment of Americans of the same access to knowledge, loans, and city services for decades. 

No easy answer other than doing better for these fellow citizens and neighbors for as long as it takes to correct it.

Fair Housing is something I take extremely seriously, so much so that I have declined clients based on the criteria they have asked me to search for them. Simplifying this to “well that’s where the lowest price homes are” ignores decades of discrimination.

Kyle Sasser

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