I do realize that a law itself doesn’t always stop something from happening in much the same way that a locked door doesn’t always prevent someone from entering. People find ways around things. I am certainly not that naive.
Even as a white family moving to Raleigh in the 1970s, we were steered by the RE community to where they wanted us to live. We were only shown properties where the “Yankees lived”, and those were the usual suspects of the time, either in north Raleigh or Cary. This is not to say that this is somehow equivalent to documented or de facto redlining practices. It’s just an example of how one isn’t fully in control of the world around us.
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Many southern towns did have racial seg housing laws. They tended to show up in new towns, and often not till the 1920s. What there were was clear understandings about where folks could or should live, and the general Jim Crow regiem and threat of violence was such that folks rarely challenged either law or custom. So towns like Chaleston and New Olreans look intgrated, even as there was great dispairity in the housing, whites in big houses on main streets, blacks in small houses in the alleys. This is also a legacy of slavery, slave owners wanted their enslaved people close.
Hargett St was the “black main st” for Raleigh, most towns had them, Auburn St in Atlanta for example. I think Parrish St was it in Durham
This a broad generalization, individual cities vary.
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Thank you
Stealing that
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That map is crazy to see. Thanks for sharing.
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I’m sure people know this but just to state the obvious, generational wealth accumulates over generations. So although we are 4 generations removed from redlining and 3 generations from restrictive covenants, wiping away the “original sin” of racist housing policy isn’t so easy. (Actually, considering only those who are born into money reap the full rewards that accrue from wealth, subtract 1 from both those numbers). A home is by far the most significant asset most non-wealthy people will ever own; we are still dealing with the consequences of the fact that many were denied that opportunity.
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I think you just made the argument for not living in urban areas as far more people own homes in rural areas. Case in point they’re practically building nothing but apartments downtown Raleigh nowadays.
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But if everyone moved to rural areas, everyone would be unemployed, not building much wealth
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Well, feudal serfs were technically employed.
Many people argue that a primary home is not an asset, but a liability. Arguments have also been made that you actually don’t have access to the cash from your house unless you get a home equity loan or sell your house. You still get charged interest on those loans which means your returns are less if you get one.
Has Real Estate or the Stock Market Performed Better Historically?.
Does the Stock Market Outperform the Housing Market?
Historically and generally the stock market outperforms the housing market, but the housing market is usually more stable than the stock market.
I rent and my money goes into investments. This is also a reason why I bike to work. Less money on maintenance or second car means I can throw more money into investments.
Link from Google / AI search: Annualized increased for last 20 years is 5.65%/year
General Trends Over the Past 20 Years
While there have been periods of rising and falling home values, the result is this: In the past 20 years, the average home price in the U.S. has grown from about $140,000 to about $420,400 as of the end of 2024. The trend of median sale prices versus supply and demand is projected to continue throughout 2025.
S&P 500 today: $6,061.48
20 years ago: $1,187.27
~ 8.49% average annual return not including dividends.
Obviously redlining is bad, but I just wanted to point out that home ownership is not the only way to wealth.
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i lived in reno nv for 10 years…some neighbors of my folks there sold homes in and around the bay area and lapped up nice places in reno at a fraction of the cost at their retirement…can the house be an asset when you liquidate and re-locate?
what are we looking at in terms of color codes? Was green which is labeled “first grade” supposed to mean OK to give mortgages down to, down to red “fourth grade” which was supposed to be NOT ok?
Or was virtually any color on the map going to be prevented from getting a mortgage? What about the numbers like C4 or B6 or A2? I assume they judged red worse than yellow, and green the “best”? but the blue confuses me. Actually the whole thing confuses me and makes me sad this was the way some/many people behaved and thought not all THAT long ago.
Durham Freeway took out a swath from red area D6 as you pointed out, but also chewed up a ton of C4, C6, and B6 yellow and blue (just NE of the tobacco campus area and where DBAP is today) for the downtown exit/entrance ramps on/off at South Duke, Vickers, W. Chapel Hill St, Swift
Anyway, it’s a curious map with a heavy message. thanks for posting it.
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i have no doubt that went on in nc and other states…for what is worth, my parents who worked for state govt (white but handicapped) were denied a loan from bb&t for wanting to add on a 20 by 15 room on a house in south raleigh in the late 60s.
wait, WHAT?
nobody has a job outside of the downtowns and suburbs? All the rural people are unemployed?
I don’t follow this at all! Rural people have employment, too, just not as many of them have employment in high rise office buildings downtown.
Many around here of course farm, there’s WFH (existed long before COVID), and tons drive (IN CARS) LOL to RTP and all the triangle towns.
It wasn’t a very serious reply. Ted was making the point that it’s difficult to buy a home and build wealth in the city, which is true if one has no generational wealth. But that isn’t an intrinsic property of the city as a place, rather of the city as a strictly controlled housing market. If we had the luxury (right) of complete market freedom, many low density neighborhoods in Raleigh that exist today would be small condo/townhome neighborhoods, and housing choices would be more abundant.
My point was that moving to a rural area where housing, food, and gas are less expensive only works for the first movers that have the most choices for work and housing. Rural areas would quickly become overrun with problems if a large group of city residents moved “there”. It would be no different than inner city gentrification
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A lot to unpack here. At an individual level, in 2025, is buying a home always a good investment, given other alternatives? No. But that’s not really what’s at stake here. When researchers try to explain the persistence of the racial wealth gap, the legacy effects of housing discrimination consistently show up at the top of the list. I’m not defending buying versus renting, except to point out that homeownership is a way to demonstrate credit worthiness and historically one of the main paths to the middle class.
https://education.nationalgeographic.org/resource/mapmaker-redlining-united-states/
https://dsl.richmond.edu/panorama/redlining/
More recent research urges that we not over-interpret the HOLC maps. They’re a powerful visual symbol, but they didn’t actually guide that many loans. Private banks had their own versions, but they’re not public. The FHA had similar maps which guided many more loans – but the FHA shredded its maps after the Fair Housing Act passed in 1968, whereas HOLC didn’t live to see the day (it was disbanded in 1954).
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In many urban areas, it’s common for individuals to rent their primary residence while investing their savings and retirement funds elsewhere. For instance, an individual with an annual income of $75,000 who maxes out their 401(k) contributions at $23,000 pre-tax is left with an effective income of around $52,000. After taxes, their net take-home pay would be about $41,000. With this budget, housing expenses should ideally be capped at $21,000 annually (roughly $1,750 per month), leaving around $20,000 for essentials like utilities, transportation, groceries, dining, and entertainment. Out of this, allocating $3,000–$5,000 for short-term savings is a prudent choice. If this individual continues contributing $23,000 annually to their 401(k) for 10 years, assuming an average annual return of 7%, their retirement account could grow to approximately $340,000.
Now, let’s break down the financials of homeownership:
Suppose you buy a $500,000 townhouse with a 3% down payment. Your mortgage payment would be $2,900/month at a 6% interest rate. When you include property taxes, insurance, and HOA fees, your total monthly cost increases to around $3,700. Over 15 years, you’d pay at least $666,000—though property taxes, insurance premiums, and HOA fees will likely rise over time. At the end of this period, you’d still owe approximately $345,000 on the mortgage, and the property may require $50,000 or more in renovations to modernize its 15-year-old interior.
Let’s say you sell the property in the future for $800,000. After accounting for real estate commissions and selling costs, you could net around $400,000. Over the 15 years, you’d have spent $660,000 from your checking account to eventually recover $400,000, assuming the property appreciated at 3% annually, taxes remained constant, and there were no unexpected HOA assessments.
Now, compare this to renting a similar townhouse for $2,400/month. This would allow you to invest $1,300 per month into a savings account earning 7% annually. After 15 years, this account would grow to approximately $450,000.
In this scenario, homeownership only makes financial sense if the property appreciates significantly, mainly due to increases in land value. Otherwise, the costs of ownership, especially for single-family homes can outweigh the benefits. The costs of maintaining and updating a home can be substantial, and many of these expenses are inefficient relative to owning larger properties or multi-unit buildings.
Additionally, ownership involves more than just a mortgage. Services like fire protection, EMS, road infrastructure, and parks require ongoing funding, and owning a property free of a mortgage doesn’t eliminate these ongoing expenses. For example, maintaining a house can become disproportionately expensive on a per-square-foot basis compared to larger properties. A roofer for a 3,000 SF home will charge more per square foot than for a 15,000 SF house due to economies of scale. Similarly, renovating a single home’s kitchen is far more expensive on a per-unit basis than renovating units in an apartment building.
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I think the debate between overall economic return of home ownership vs renting and the subsequent return on those investments (i.e., investing the difference between buying and renting) is predicated on the assumption that people will actually invest the difference. In practice, the majority of people do not/cannot. In that scenario, homeownership becomes a form of forced savings.
Agree that renting can be better at the individual level, but societally, homeownership has been a tried and true way to accumulate wealth through forcing behavior.
This doesn’t change the logical facts of the math problem but I wanted to introduce the behavioral elements to the convo.
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Think I was misunderstood – I don’t disagree with any of this – personally I would never want to own a home for both financial and lifestyle reasons. I like the flexibility of renting and not having to worry about maintenence headaches. I’m all about expanding Raleigh’s rental housing stock.
I’m on Team Rental.
My point was just that the long-term effects of discriminatory housing policy have something to do with the racial wealth gap. That doesn’t mean the path to equality in 2025 is building more single family homes.
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