How racism in Richmond’s past and present harms Black homeownership
Lending discrimination, neighborhood devaluation harm residents’ economic opportunities.
Many of Richmond’s historically Black neighborhoods have seen large increases in home values — and tax assessments — in recent years, as new residents move into a city facing a 35,000-unit housing shortage.
While that may sound like a positive for long-time homeowners, it’s kicked off a wave of displacement, with many residents unable to keep up with rising rents and property tax bills.
Oak Grove resident Robin Andrews says she’s seen many of her neighbors move away in recent years. She said while some have died, others have sold their homes to companies hoping to flip them or been unable to keep up with the tax increases.
“My neighbor there, [investors] bought her house. Property taxes over there, that house. The people couldn't afford them, so they lost out on their homes,” she said.
Andrews has owned her house in Richmond since 2005, and she’s seen her property assessment rise dramatically in recent years. In 2018, the city assessed Andrews’ home at $58,000; her 2024 assessment is $162,000.
That’s about a 180% increase.
Andrews said she tried to apply for the city’s property tax relief program to help cover the increased burden, but was ineligible because at 63 years old, she’s too young. Only those over the age of 65 and people with permanent disabilities are eligible for relief in Richmond, a provision that’s required by state law.
She’s had to rearrange her finances to pay the property taxes, making it difficult to cover other necessities.
“It's hard putting food in here, because I'm robbing Peter to pay Paul,” she said. “It has been a burden for me to be able to visit my doctors the way I need to or should, because I have to not take the appointment or make an appointment because I can't afford the copay.”
While an influx of new residents may have caused the rise in home values, Richmond-based housing investor Damon Harris said the root of the issue lies deeper.
“Gentrification is the end result, right? Like, someone has to buy something for low in order to re-face the community. Even before they changed Blackwell to Manchester, they still have to be able to buy something low.” he said. “Gentrification happens in the areas that were redlined.”
“It’s almost as if people, when they look at Black neighborhoods, they see twice as much crime as there actually is, they see worse education than there actually is.”
Redlining stripped resources from Black neighborhoods
For decades, Black people were locked out of neighborhoods throughout the Richmond region by government or privately enforced segregation. Banks, homeowners’ associations and local and federal governments repeatedly discriminated against Black families to deny them housing.
“They wouldn’t give you mortgages, they wouldn’t provide insurance. You couldn’t get funding, so you had to rent,” Harris said.
Some Black families “bought homes that were abandoned or vacant,” he said, but homeownership was unattainable for most Black households.
In 1937, federal officials hoping to increase white homeownership mapped and graded Richmond’s neighborhoods based on “residential security.”
Those ratings, however, actually focused on race.
The Home Owners’ Loan Corporation, created during the New Deal, labeled neighborhoods as “hazardous” based on the presence of Black residents. In its explanation for deeming hazardous a section of Richmond titled “D8,” roughly aligning with modern-day Randolph and Oregon Hill, HOLC officials wrote: “[Black people] crowded out of D-1 are crowding white men out of the aged and obsolete structures of D-8.”
Even the proximity of Black people, according to those officials, was enough to recommend banks not lend money to individuals hoping to live in certain neighborhoods. One neighborhood, titled “C7” just north of what is now Ginter Park, received a grade of “definitely declining” with the blunt explanation: “respectable people but homes are too near [Black] area [Washington Park].”
Those neighborhoods, labeled as dangerous due to the presence of people who government officials deemed “lower grade” or “undesirable,” deteriorated.
A 2017 national study by the Federal Reserve Bank of Chicago concluded that by denying mortgages to those looking to buy or build in “redlined” neighborhoods, or increasing the cost to borrow money, the HOLC spurred disinvestment in those neighborhoods.
Harris said that disinvestment prevented home-owning families from building wealth.
“These areas that lost value, these homeowners never had resources to refinance because there was no boost in value of their property,” he said. “They never had an opportunity to pull any earned equity.”
While the federal government outlawed redlining by banning racial discrimination in housing with the 1968 Fair Housing Act, banks continued to discriminate against Black mortgage applicants well into the 1990s. Federal policy has also failed to address the racial homeownership gap.
In 1970, the homeownership rate for Black households was 23.6 percentage points lower than for white households. Today, that gap is even wider. While 43.4% of Black households in the U.S. owned their homes in 2020, according to the National Association of Realtors, 72.1% of white households did — a 28.7 percentage point gap.
Several neighborhoods in Richmond’s Southside, abandoned by white families during the fight for school integration, now have homeownership rates far below what’s characteristic for their housing mixture in the region. That accounts for the percentage of single-family homes, which are far more likely to be owner-occupied than multifamily properties.
In Richmond’s southernmost census tract, along U.S. Route 1, the homeownership rate is more than 40 percentage points below other neighborhoods with a similar housing mixture. In that neighborhood, where a majority of residents are Hispanic or Black, the Census Bureau estimates that about 38% of residents live in poverty, including about 200 children.
“People look at like, why doesn’t Petersburg turn around? Well, 70% of the homes are owned by people who don’t live there. There’s no motivation to do anything,” Harris said. “Same thing in Southside.”
Several of Richmond’s redlined neighborhoods — including Randolph, Blackwell, Fulton and the northern section of Church Hill — also have homeownership rates below what is typical given their percentage of single-family homes.
The lack of housing opportunities has direct, negative impacts on the lives of Black Americans. Nationally, people who live in formerly “redlined” neighborhoods are more likely to live in poverty, die at younger ages and experience numerous chronic illnesses.
People living in many of Richmond’s redlined neighborhoods are expected to die before they turn 70, according to a Virginia Commonwealth University study. In the West End, life expectancy instead tops 80 years; in the area’s Mary Munford neighborhood, people are expected to live to be nearly 90, about 23 years longer than those who live in Richmond’s most disinvested communities.
Harris noted that negative social outcomes — like infant and maternal mortality, police violence and lack of access to healthy food — are concentrated in redlined neighborhoods.
“Those areas remain stagnant because there's no resources, no infrastructure that puts them back in there,” Harris said. “You can't replace wealth, you can't replace opportunity, you can't replace possibilities simply by saying it.”
Devalued and vulnerable to displacement
The actions of past government and banking officials alone cannot explain the current devaluation of Black property. Racism continues to drive down home prices in Richmond’s majority-Black neighborhoods.
Were the devaluation of Black property only caused by past disinvestment, then controlling for factors that affect home prices, such as crime rates, school quality and access to amenities, should eliminate the price discrepancy. It does not.
Instead, according to research conducted by the Brookings Institute, even when controlling for a variety of factors, homes in majority-Black neighborhoods are still undervalued by the real estate market. In Richmond, homes lose 17% of their market value simply by existing in majority-Black neighborhoods.
That robs the median homeowner in those neighborhoods of more than $30,000 in home equity. Nationwide, homeowners living in majority-Black neighborhoods lose $156 billion from property devaluation that cannot be explained by other factors.
“That equity that is lost is the money that people use to send their kids to college, to start a business,” said Andre Perry, who co-authored the Brookings Institute study. “If [their] homes were at market rate, Black people would be a lot better off than they currently are.”
According to Perry, that value is lost directly to racism.
“There’s a perception of Black neighborhoods that is distorting the market in bad ways,” Perry said. “It’s almost as if people, when they look at Black neighborhoods, they see twice as much crime as there actually is, they see worse education than there actually is.”
With their homes undervalued by those who live around them, Black Richmonders are left vulnerable to displacement. In recent years, a rapid increase in home prices across the region has contributed to that.
“Northside increased 36% in one calendar year. Petersburg, it increased 120% in four years. … [O]ur clients, we weren't seeing 100, 120% increases in income,” Harris said. “So, that's a whole lot of folks that are now no longer able to afford a home, even in the most affordable places.”
In several historically Black, formerly redlined Richmond neighborhoods, more than 1 in 5 residents were evicted from their homes in 2016. That contributed to the city having the second highest eviction rate in the U.S. that year, according to data collected by the Eviction Lab at Princeton University. While eviction rates decreased as a result of pandemic-era programs aimed at keeping people in their homes, they’ve risen to near pre-pandemic levels in recent months, concentrated in Southside and the East End.
Many of those same neighborhoods have seen more than 1 in 10 homes foreclosed upon or forced into a tax sale since 2014, according to city records.
Because homeowners in devalued neighborhoods are often unable to pull equity from their homes, it can be difficult to maintain them. Harris said that can make it difficult for people who want to sell their house to get the value it’s worth.
“The house may need a roof to be sold. It costs money to sell your houses. Sometimes you have to put money in it to make money or just at least to get it to be able to be sold,” Harris said. “So someone walks into your door and says, ‘Hey, I'll write you out a check right now. I’ll even let you stay here for six months for free,’ ... that's hella pressure.”
Harris said large tax increases — and the stern warnings that come when they aren’t paid — add to that pressure.
Wyetta Sledge has owned her house in Southern Barton Heights for 36 years. From 2022 to 2023, her assessment jumped 60% from $138,000 to $222,000; it climbed another 10% for 2024 to $244,000. Sledge said that additional cost has made it difficult to fund repairs on her house.
She said she’s seen several of her neighbors sell their homes in recent years, and she’s thought about it as well. But she doesn’t know where she’d be able to move to.
“What I paid for mine, when I moved here, I could never, I couldn't even buy an apartment for that price now,” Sledge said. “So selling it, basically, you look at what it's going to cost you to replace your residence for your next spot to live in. And it's just too much.”
Harris said his company — Teal House Company — tries to work with long-time residents in gentrifying neighborhoods so they can benefit from their property’s increase in value.
“Instead of it being sold to an investor that can change the market by pricing it any way they see fit, especially now, we make it market ready,” Harris said. “Instead of them just making small bits of money because they're gonna sell it for cash and sell it to an investor. They're able to get full value of their property.”
Teal House recently worked with a Northside resident who’d owned their house since 2008. Harris said the homeowner originally listed the house to sell as-is for about $125,000. He said as-is sales are often attractive to homeowners who can’t afford repairs but want to sell their house. But they also significantly lower the price a homeowner can get.
“As-is means the it’s reserved to people that could buy in cash, and anyone who does not need a traditional loan,” Harris said. “When you see the city changing, it’s because a lot of homes were sold either through auction or as-is sales. And that as-is sales, it’s important to kind of remove that from the market.”
Harris said his company aims to do this by working with homeowners to repair their homes before selling them — instead of buying the house and flipping it. Teal House invested about $70,000 into repairs on the Northside property, which sold in September for $285,000 — $160,000 more than the price the owner originally planned.
While Harris said his company will get its investment back, the rest of the increase in value will go to the homeowner.
“The main winner, it has to be the homeowner, because we want to establish their ability to gain wealth from their home,” Harris said. “Especially in this house and other homes that were in redlined communities.”
Still, leaving a home is about more than finances. Oak Grove resident Andrews, for example, said she won’t leave her home — no matter the tax increases.
“I come from a family that didn't have much. I'm the first one of my family members to graduate, the first one of my family to own a home,” she said. “Coming from that type of life, it's hard. So I take pride in what I have accomplished. And I refuse to sell my home that I worked hard for.”