Baltimore Urban League Minority Occupancy and Housing Values

[Draft Created by Crowdsourcing]
Minority Occupancy
and
Housing Values

BALTIMORE URBAN LEAGUE
2404 PENNSYLVANIA AVENUE
BALTIMORE 17, MARYLAND

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FOREWORD
Neighborhoods in Baltimore, as is generally true of all urban centers are in the process of changing from white to non-white occupancy. In Baltimore, this process took a spurt with the 1948 United States Supreme Court decision which held that a court as a state agency was barred from enforcing racially restrictive covenants. Additional factors which have accelerated this change-over include the pronounced increase in the local non-white population, a great rise in the income level of that group, the tremendous boom in construction of new homes for white purchasers and the general flight to the suburbs. But the expansion in the number of dwelling units and space occupied by non-whites has not kept pace with the need.
The Baltimore Urban League traditionally has had a deep interest in and concern for the problem of minority housing. That concern has been directed not only to the quantity and quality of the housing supply available to the minority family, but also to the stabilization of integrated residential patterns. The latter point looms large in importance precisely because, in its absence, intergroup relations can never be fully developed.
In addition to the educational program which is the hallmark of the Baltimore Urban League, the agency highlighted its housing effort but the issuance in January, 1957, of an 8-page folder "Is Yours A Changing Neighborhood?" Over 9,000 copies have been distributed and the publication has been given national recognition. That pamphlet dealt with the general factors that cause neighborhoods to change the racial occupancy and with the questions that almost always are foremost in the minds of white residents in a neighborhood into which non-whites are moving.
The tensions and unrest that accompany the entry of Negro occupants into neighborhoods formerly closed to them are detrimental not only to wholesome race relations, but also to general community development. The League, because of its special role in the promotion of effective community organization programs, with resultant sound intergroup relations, has sponsored the survey which this pamphlet reports.
The study reported below is the first section of a three-part survey dealing with the effect on non-white occupancy on housing values in Baltimore. This section deals with a specific area inhabited by upper middle-income homeowners. The second and third sections, to be released in 1958, will report studies of housing values in lower income areas. One of these will be a re-study of an area which changed racial occupancy more than ten years ago.¹ The three reports then will total a survey covering varying income levels and geographical areas of the city and should supply a comprehensive answer to the general subject under investigation.
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¹ See "Invasion And Racial Attitudes: A Study Of Housing In A Border City": Social Forces, Vol. 27, No. 3, March, 1949.

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In releasing this first section, the Baltimore Urban League acknowledges its special indebtedness to Dr Clifton R. Jones, who directed selected members of the sociology research class at Morgan State College in the task of gathering the statistical information and who wrote the body of this report. Appreciation also is expressed to Dr. Jones' students and to the members of the League's Research Committee, who reviewed this report and whose names are listed at its end.

FEARS AND FACTS
One of the fears expressed by those who oppose Negroes moving into a previously all- white neighborhood is that negro occupancy causes a decrease in property values and leads to eventual neighborhood blight. When a Negro family moves into a neighborhood, this widespread belief usually causes panic among white families and "For Sale" signs appear throughout the area. A sober analysis of the situation is likely to reveal certain factors that are not generally taken into consideration.
One of the primary factors to be considered is the acute shortage of housing available to Negroes. The segregated pattern of housing in urban communities leads to overcrowded conditions in Negro ghettos. Thus, there is a great demand for adequate housing in the Negro community. Real estate dealers and private owners can, and frequently do, take advantage of this situation by charging Negroes considerably more than the market value of property.
The demand for housing so far exceeds the supply that some Negro families, of modest incomes ($5,000 or less) tend to convert single family dwellings into multiple family dwellings in order to meet the high purchase price through the additional income obtained from rent. When this occurs, neighborhood deterioration inevitably becomes more rapid. Negroes in the upper-middle income brackets can afford new first-class housing; but it is not available to them. They too much accept inferior housing that has "trickled downward" from white owners.
The housing that is made available for Negro occupancy is most often located in the older, more deteriorated areas of the city. In many instances, white owners have permitted their properties to run down and, hence, decrease in value. Often, too, light commercial enterprises have begun to invade the racially changing area and to decrease the value of residential properties still further. Still another factor is the attitude of the municipal service agencies. There is evidence that when Negroes move into a neighborhood the city itself contributes to the deterioration process by reducing previous levels of inspection, sanitation, and police services. Thus, a neighborhood has usually become less desirable before it is made available for Negro occupancy.
These combined factors operate upon all minority

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groups, but they especially affect the Negro. The point to be emphasized however is that these factors are ignored by or are unknown to those who assert that Negroes lower property values. In order to determine the real effect of Negro occupancy on property values, the question should be stated What happens to property values when the only variable in the neighborhood is the race of the occupants and where deterioration has not already set in? No previous attempt has been made to determine this locally.
Therefore, the Baltimore Urban League, which for more than ten years has been interested in various aspects of housing in the Negro community, set out to investigate the problem. The basic assumption of the study may be stated as follows. In any given neighborhood presently inhabited by Negro families is comparable to that of the white families previously occupying the area, and if neighborhood deterioration has not begun, the physical character of the neighborhood and the real property values will be maintained by the Negro occupants. The following is a case study selected in order to test this hypothesis.

MIDDLE-CLASS NEGRO OCCUPANCY:
A CASE STUDY
The neighborhood selected for this study is located in the 2400-2700 blocks of Longwood Street, north of Gwynns Falls Parkway and facing Hanlon Park on the east. It exhibits the following characteristics. (1) It is a neighborhood previously occupied by white families only. Negroes have lived in the area for four years. They began moving into the area in 1953, by 1955 Negroes occupied the entire neighborhood. The former white inhabitants and the present Negro inhabitants are of approximately the same socio-economic class. (2) The area is relatively new in that most of the houses are under 20 years of age. In blocks 2400 and 2500 of this street the homes vary from 19 to 16 years old, and, in blocks 2600 and 2700 the houses vary from 16 to 8 years old. (3) This is a middle-class neighborhood in that the houses meet "typical" middle-class standards. The houses are two-story row houses of brick construction, consisting of six rooms and bath, each having a porch or patio, a landscaped front lawn and a back yard.
It will be well first to consider the cost of housing in the area to Negro families because it illustrates two things. (1) the comparative disadvantage of the Negro on the housing market, and (2) the consequence initial financial hurdle of the colored purchaser as he seeks to maintain the physical standards of a neighborhood that is undergoing the impact of succession from white to non-white occupancy. This survey of housing cost will be followed by a brief analysis of the socio-economic status of the occupants and a statement regarding their maintenance of real property values.

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COST OF HOUSING TO NEGRO FAMILIES IN THE LONGWOOD AREA
In the four blocks on North Longwood Street included in this study there are 45 properties. 5 in Block 1, 10 in Block 11, 15 in Blocks III and IV respectively. A total of 33 homes were included in the study on costs 2 in Block 1, 9 in Block II, 11 in Block III, and 11 in Block IV The analysis is based on 31 of the 40 homes (77.5 per cent) in Blocks II, III, and IV

1 Block II 2500 North Longwood Street

The nine properties in this block included in the study ranged in price when new (1936-1937) from $4,500 to $6,500. The two corner houses sold at $6,500 while the other eight were prices at $5,000. Two of them sold for $6,000.¹ Six of the properties were sold to white families between 1947 and 1951 The price at which these properties were sold during this period was taken as representative of the true "market price" or value of the properties. The sale prices during this period ranged from $10,000 to $15,000. It was the corner property, converted into two apartments, which brought the latter price. This property is now used as a one family dwelling. The average cost of these properties to white families, 1947-51, was $12,187 When these homes were sold to Negroes, the average cost per property was $13,389. This represents a differential of $1,202.

2. Block III. 2600 North Longwood Street

The situation in Block III is much the same as in Block II. The original price of the homes in the first half of the block, based on 1940-41 prices when the homes were opened for occupancy, was $5,000. The second half of the block was not built until 1949, at which time the houses sold from $10,000 to $15,000. The average cost to white buyers, 1949-51, was $12,000. The cost to Negro buyers, 1953-54, ranged from $11,500 to $17,500, or an average of $13,900 per property. This represents and average increase of some $1,900 in price to Negro buyers.

3. Block IV 2700 North Longwood Street

Since the houses in this block were not opened until 1949, their sale price is representative of the general level of market prices. During white occupancy, from 1949 to 1951, the cost of these properties ranged in price from $10,500 to $12,500 in fee or an average of $11,500. The average cost to Negro home-buyers, 1954-1955, was $12,409. The differential here was about $900. Obviously then, a white homeowner in these blocks suffered no dollar loss in the sale of his property to a colored buyer
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¹ In Baltimore there exists a system of ground rents whereby the original owner retains title to the land even when the house is sold. The purchaser of a house pays a ground rent which varies according to the value of the land. In this study, for purposes of uniformity, all purchases in which ground rent is paid have been transposed to "in fee" purchases.

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SOCIO-ECONOMIC STATUS OF THE NEGRO FAMILIES
The socio-economic status of the families inhabiting an area largely determine the character of the area itself. Such factors as income, occupation and educational achievement have an important bearing on the attitudes of the occupants toward the neighborhood.
1. Occupational Status. There are 45 families in the area. These 45 families constitute a total population of 106 persons in the neighborhood. Of this number, 84 are employed. All except five of the employed persons are white collar workers and professional people. The five exceptions are skilled workers whose incomes are considerably in excess of that of some of the white-collar workers. Among the white collar and professional people there are 13 public school teachers, 5 college professors; 4 physicians, 2 dentists, 1 band leader; 1 lawyer; 1 social worker; 1 salesman and 1 policeman. This count is representative rather than complete.
Occupational status has an importance here which cannot be overemphasized. In the first place, occupational status is a good index of family income. For this neighborhood, a conservative estimate of family income is $10,000 annually. In view of the fact that, in most instances, both husband and wife are employed, family income may be above this estimate. If general acceptance can be given the "rule of thumb" that the price of a house should be between 1 1/2-3 times annual income it would appear that family income is sufficient to pay for the properties in this neighborhood without placing an undue strain on the family budget, even with careful adjustments made to fit individual family situations.
Secondly, occupational status is an index to educational achievement and cultural level. In 40 of the 45 families, the heads of the families are college graduates. It is obvious from the professions listed above that a considerable proportion of those have had professional and graduate training. Among the housewives, all but three were college graduates. In such a group, one would normally expect a great appreciation for orderly surroundings and neighborhood respectability. This is evident in the Longwood Street area in many ways such as the frequency with which lawns are cut, flowers planted and cared for; the maintenance of the physical appearance of the properties, interior decorating; demands for adequate municipal services and sensitivity to personal appearance on the street or when relaxing on the patio or in the back yard.
2. Family Structure: For the most part, the families here are middle-aged rather than young married couples. These families had acquired some degree of economic stability prior to moving into the area. It is unlikely that they will move again in the near future since they are

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settled people and have found the area desirable. Hence, neighborhood stability is relatively assured.
In these four blocks, there is a total of 9 children, none under five years of age. There are five children in the 5-9 age group; 2 in the 10-14 group and 2 in the 15-19 age group. In view of the age of the parents, it is unlikely that there will be any appreciable increase in the number of children in the area. Thus, the coming of non-whites to those blocks has not been accompanied by an increase in population density.

FAMILY EXPENDITURES FOR MAINTENANCE AND IMPROVEMENT OF PROPERTY
It is generally estimated that the annual cost of maintenance of new property (that property less than 15 years old) is 1 1/2 to 2 percent of the value of the property. For property 15-25 years old, the cost of maintenance is placed at 2 to 4 percent of value.
The properties of Blocks l-lll are 15-20 years old and we have assumed the median cost, or 3 percent of their value, for maintenance. Based on the average sale price of $11,843, maintenance would include painting, roofing, plumbing, wiring, and landscaping. To date, the average total amount spent on such maintenance has been less than $200 per year. This under-expenditure well might be due to the good condition of most of the homes when the present occupants took possession of them and to the care which the new owners have habitually exercised.
The major costs have been incurred in the improvement rather than maintenance of the properties. The average expenditure for improvements was $988.00, which does not include expenditures for furniture and other house furnishings. The improvements covered by the average cited here include painting, papering, installing floors, club cellars, and other features to make the homes more attractive and comfortable.

FAMILY ATTITUDES TOWARD THE NEIGHBORHOOD
Almost without exception, the families living on Longwood Street are proud of their homes. Their pride in their neighborhood and its location has made them sensitive to anything which threatens in any way to decrease the value of their properties or make the neighborhood a less desirable place in which to live. This is demonstrated by their activity in the neighborhood improvement association that covers in the area of which their blocks constitute a relatively small part. They attend the meetings of the association rather regularly, but do not attempt to dominate the meetings even though they hold an enviable position in the community and are conscious of it. The association itself has done a remarkable job in maintaining a high quality of

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community living throughout the area. It has encouraged supervised recreation for children, campaigned for clean streets and alleys, stimulated the beautification of homes, and opposed the establishment of taverns and other commercial enterprises in the area.

SUMMARY
Since 1953, when non-white families first began to move into the area, the property in the neighborhood has maintained its value and, in individual instances, the real value of the property has increased. This appreciation in property values has occurred despite the higher initial cost to the colored buyers. Negroes in the socio-economic and cultural level represented here are very proud. They are well aware of the traditional racial attitudes and beliefs that Negro occupancy usually results in the deterioration of the neighborhood. This has been an added incentive for the resident families to exert special efforts to keep up their property and to control its use as much as possible. They are determined to maintain neighborhood respectability at all costs. Changes which occur in this neighborhood in the future are likely to be changes that would come to any community irrespective of the racial composition of its inhabitants, changes over which the residents, whatever their race, would have little or no control.

CONCLUSION
If this neighborhood is any criterion, it would appear that change in racial occupancy-white to Negro-does not result in neighborhood deterioration and decreases in property values when the Negro families moving in have comparable income and cultural levels to the white families whom they succeed, and where the process of deterioration has not set in prior to Negro occupancy.

RESEARCH COMMITTEE:
MORTON HOFFMAN CLIFTON R. JONES
ROGER JOHNSON DANIEL WILNER
LORNE WOOLLATT
BENJAMIN QUARLES, Chairman
STANLEY BRAH, President, Executive Board
FURMAN L. TEMPLETON, Executive Director

"Let us work not as colored people nor as white people for the narrow benefit of any group alone, but together, as American citizens, for the common good of our common city, our common country"
MRS. RUTH STANDISH BALDWIN
Founder of the National Urban League 1910