A new understanding of why poverty and racial inequality plague Black America : Planet Money Homes in Black neighborhoods are valued lower than homes in white neighborhoods. Why? This episode, Dr. Andre Perry flips the narrative of the racial wealth gap. | Subscribe to our weekly newsletter here.

Rethinking Black Wealth

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When Andre Perry went to college, he was already becoming something of a policy nerd. He wanted to study history and political science and spend time in the basement of the library reading official government reports from the 1960s.

ANDRE PERRY: One of the first reports I read was the Moynihan report. And for those who don't know, it was a significant report in the '60s that provided the state of Black America, so to speak.


And this was something Andre knew a little bit about, seeing as he grew up in Black America. In fact, he grew up in the small, predominantly Black town of Wilkinsburg, Pa., surrounded on three sides by Pittsburgh.

SMITH: And the report was essentially about life in a town like that. It was written in 1965 by Daniel Patrick Moynihan. At the time, he was the assistant secretary of labor, but he would go on to become this famous liberal senator from New York. The report was called "The Negro Family: The Case For National Action."

SNEED: So the original goal of this report was to understand the roots of racial inequality and economic and sociological analysis. But when Andre read it, he thought, this conclusion seems very off.

PERRY: It set a horrible example of blaming poverty on Black women's marital behaviors and living arrangements.

SMITH: Moynihan argued that decades of segregation and oppression forced Black families into a matriarchal family structure - families headed by women. And for Moynihan, that was the problem right there. With women as the head of the family, the report argued that Black children would grow up into poverty and drugs and crime.

SNEED: So the solution he prescribed, it wasn't integrate the schools and redlining - stuff like that. And it wasn't, help Black families the way you've helped white families get out of poverty. Instead, the report said the country needs, quote...

SMITH: "A new kind of national goal - the establishment of a stable Negro family structure."

SNEED: As if, by definition, a family run by a Black woman is unstable.

SMITH: This didn't sound right to Andre. He was raised by a single Black woman he came to call his mom, Elsie Boyd, a woman who during Andre's time in her house had raised or fostered at least a dozen kids.

PERRY: Reading that report, I was completely offended because my mom did not put me in harm's way. She saved my life. She saved the lives of many.

SMITH: Young Andre Perry would go on to get his Ph.D. in education policy and leadership. He'd run a charter school network in New Orleans. And eventually, he went to work at a think tank, the Brookings Institution, doing research and coming up with big ideas.

SNEED: And as he was doing all this, he kept thinking back to the original intellectual sin of the Moynihan report, blaming people instead of policy.

PERRY: One of my favorite quotes from a philosopher - Vietnamese philosopher, it states something like, when you're growing a head of lettuce and it's not growing, you don't blame the lettuce. You look to see if the soil is rich. You see if it's getting sunlight. You see if it's getting water. You never blame the lettuce. But when we talk about Black communities and the lack of growth, we're constantly blaming the lettuce.

SMITH: Moynihan wrote this report back in the 1960s, and it framed the debate and drove policy for decades. But Andre thought, you know, we have all this new research. We have new ways of thinking of things. We have these new tools now. So why don't I dig into the data and see how it compares to Moynihan's conclusions?

PERRY: My policy journey began recognizing that something was framed incorrectly. So for me, when I hear policymakers talk badly about Wilkinsburg or my mother, I get mad. It's no different than when you're on the schoolyard and somebody talks about your mother. You know, you get hyped (ph). And so, obviously, you're - I'm not going around punching...

SNEED: Instead of throwing hands, you throw policy.

PERRY: Exactly. Now I've learned how to fight in a different way.


SNEED: Hello, and welcome to PLANET MONEY. I'm James Sneed.

SMITH: And I'm Robert Smith. Ladies and gentlemen, we have a treat for you tonight. In one corner, we have the pride of Wilkinsburg, Pa., Andre Perry. In the opposite corner, the liberal lion of New York, Senator Daniel Patrick Moynihan.

SNEED: Today on the show, Andre decides he's going to write his own report, a new analysis of the state of Black America.

SMITH: And as he digs into the data, what he finds flips the narrative of the racial wealth gap.

SNEED: And this time, Black women aren't the problem; they're the solution.


SNEED: Andre Perry decided that the best place to start a study of Black America was in Black-majority cities, which makes sense. He had lived most of his life in places like that - D.C., New Orleans and Wilkinsburg, Pa., where he grew up.

SMITH: Andre remembers being a teenager there, jogging down the main street of this tiny town.

PERRY: And at the time, I had no idea when Wilkinsburg turned into Pittsburgh. There was a Nabisco cookie factory right at the Pittsburgh border. So when I started to smell cookies, I knew I was in Pittsburgh.

SMITH: This was before most of the factories and the jobs left the area.

PERRY: It's very different from when I started running it again 30-something years later as an adult.

SNEED: What had changed the most? Like, what were you missing?

PERRY: Yeah. Well, one, there wasn't the bustle that it used to be. The stores - many of them boarded up. As you approach Pittsburgh, you no longer smell the cookies. You never - you don't smell the vanilla wafers. But there is another marker that sticks out, and it's white people.

SNEED: The other, other vanilla wafer.

SMITH: (Laughter) The Nabisco factory had become the Pittsburgh headquarters for Google. In fact, they called it Bakery Square. And the money, it was flowing everywhere - to developers and the surrounding neighborhoods.

SNEED: Andre noticed Wilkinsburg, still majority Black, wasn't reaping the benefits of their new neighbors. Home values were still in the basement. Andre's childhood home - it was boarded up and abandoned.

PERRY: People are struggling in spite of seeing a major company within what used to be smelling distance of Nabisco. So when I go back, I go, why is that the case?

SMITH: At this point, Andre Perry is working at Brookings, the think tank. It is now essentially his job to answer questions like that. Why is this the case? Why are the same houses on different sides of a city border worth different amounts of money?

SNEED: So he started looking more closely at Black-majority cities.

SMITH: He digs into the data - education, employment, economic development, transportation systems, housing.

PERRY: These are generally called assets. So I started saying, well, they're just not investing in assets that are proximate to Black people.

SMITH: In other words, if there's an asset, like a house or a business, that's owned or rented or run or even nearby Black people, it doesn't merit investment.

PERRY: But then I started going, I got to find a way to prove that.

SMITH: He starts with housing - classic asset, lots of data.

SNEED: It's no secret that houses in Black neighborhoods are priced lower on average than houses in white neighborhoods. It's pretty obvious with a quick look at Zillow. But this disparity could be due to a whole litany of things.

SMITH: So Andre thought, I'm going to break this down and see if skin color is the real reason for price differences in real estate. He pulls a ton of data on neighborhoods where more than 50% of the population is Black, and then he compares it against extremely white neighborhoods.

SNEED: But he makes sure to compare identical houses. He controls for school district, neighborhood safety, walkability, socioeconomic status, all those fancy Zillow metrics you hear about.

PERRY: So we got apples to apples comparison. So we looked at middle-class homes versus middle-class homes, same educational levels, same crime levels. And what we found pretty much astounds - that homes in Black neighborhoods are underpriced, undervalued by 23%, and that's about 48,000 per home. Cumulatively, that's 156 billion in lost equity.

SNEED: A hundred and fifty-six billion.

PERRY: A hundred and fifty-six billion.

SMITH: Andre says there's a lot of reasons for this - things like real estate agents steering clients away from those neighborhoods or banks making loans harder to get for certain people.

PERRY: Right now, there's a lot of news on appraisals. There was a New York Times story that talked about a multiracial family changing out the Black pictures for white ones so that they could get a higher appraisal, and which they did. Now, in my research, that was all too common. What is absolutely clear - that home prices in Black neighborhoods should be higher. They should be higher.

SNEED: And it matters because housing is like the bedrock of wealth and savings in this country. If you have 23% less, compound that over a lifetime, there's no winning. It adds up.

SMITH: And this is when Andre Perry has his Moynihan moment. Obviously, the problem is not with Black families, but what if the problem is with the way the world values the things around Black families - the value of their houses, their assets, the things that Black people own or use? And he came up with a new name for this concept.

PERRY: Devalued assets.

SMITH: Devalued assets.

PERRY: These are assets and which should be priced higher, valued higher, but there is a purposeful suppression of that value. And so the reason why I say devalued, I want to put action on that. I want to show that there's a intentional lowering of value on assets that are proximate to Black people. I say it's because of policy. So when I say devalued assets, that's what I'm talking about.

SMITH: It sounds very cold and clinical. Was that by design?

PERRY: I hang out with a bunch of economists, so that probably rubbed off on me.

SMITH: (Laughter).

PERRY: But people get it. When I talk about this in areas where devaluation happens, there's always a grandmother that stands up and says, yeah, we know that, baby. You ain't teaching me nothing, baby. We've been knowing that. We can walk down the street and see that. And for me, I love that because it shows that Black people are right, that the ideas can be held up empirically.

SNEED: This was my experience, too. For me, when I first heard this term, it sounded exactly true. It sounded exactly right. And now that I've heard this term, I can't really think about the world in any other way.

SMITH: Devaluation - Andre starts to see it in everything. He does a very similar study on small businesses in Black neighborhoods versus small businesses in white neighborhoods.

SNEED: He uses the same research tricks he used in the housing study, controlling for location and rent and Yelp review rating. And he finds businesses in Black neighborhoods have lower revenue than equivalent businesses in white neighborhoods.

SMITH: Has anyone ever said that this is kind of a unified field theory of racism in society?

PERRY: Yeah, yeah. Some people think devaluation is much bigger than an economic term. It's a theory. It's a phenomenon that transcends discipline and sector. But what we found in home prices is largely a metaphor for what's going on in society as a whole.

SMITH: And what had gone on for all of Andre Perry's life. Take, for example, his father, Floyd Perry (ph).

SNEED: Andre doesn't really remember meeting his father. He'd only ever heard stories about him, heard how much he looked like his father, and about how his father had fallen into drugs and ended up in a prison near Detroit.

PERRY: I can't remember the exact time I learned that he died in prison. It was one of those family secrets, so to speak. The one story I had to hang on was that he died breaking up a fight in prison. And for me, it was a way to humanize him.

SMITH: For most of his life, Andre tried not to think too much about it. But when he started to research majority-Black cities, he knew his research would lead him to Detroit.

PERRY: I was looking at homes. I said, I'm going to look at my - where my father lived as a way just to get started.

SNEED: In Detroit, Andre looked at neighborhoods where his father had lived that now had boarded-up houses. So did the businesses where his father might have gone to. They were abandoned. And the schools - they were failing. And with this new lens he had now coined, devaluation, his father's life started to make more sense.

PERRY: Because when I saw the areas in which he lived and the areas in which he died, I said, this was not his fault. I said to myself, wow, he deserves my attention. He deserves to be redeemed.

SMITH: There was one last thing Andre had to do as part of his research in Detroit. He visited the penitentiary where his dad died to get his medical files.

PERRY: They direct me to the hospital and a few hospital records. And it showed that he died from a single stab wound to the heart. It was a day before his 27th birthday. I asked the medical staff, does this look like a fight to you? And they said it's probably more likely someone got him while he was sleeping. And that's how I met my father.

SNEED: Andre walked down the stairs out of the prison but stopped before he got to his car. He wanted to read every part of the report again carefully, not skipping anything. There it was - his theory, as lived by his father.

PERRY: If he was a white man in Detroit, he would've had better schools, better job opportunities. Drug behavior wouldn't be criminalized. And if it was, he would've probably ended up in a drug treatment facility. And so, yes, he died at the hands of another inmate, but you can't tell me that devaluation was not an accomplice.


SMITH: After the break, Andre Perry rewrites the Moynihan report.


SMITH: Andre Perry assembled all of his research and his father's story into a book just published this spring. It's called "Know Your Price: Valuing Black Lives And Property In America's Black Cities."

SNEED: In the book, Andre argues against Moynihan's thesis that Black folks need to be better bootstrappers or should've just capitalism-ed (ph) harder. But the solution he offers isn't just to restore value to devalued communities. He says there's a problem with that approach.

PERRY: If you would wave a magic pricing wand at the homes of Black neighborhoods and raise the prices, guess what you would do. You would lock people out from buying.

SMITH: A lot of the fixes that people have suggested over the years fall into this trap. For instance, one of the common suggestions when people talk about depressed home values is for the city to pour money into these neighborhoods and let the market take care of the problem. Home values will get bid up if there are new sidewalks and streetlights, new parks, murals.

SNEED: Lots of murals.

PERRY: There's a lot of programs, including opportunity zones, that encourage the investment in brick-and-mortar and streets and infrastructure. And let's be clear that if you invest in place and not people, that's encouraging gentrification.

SNEED: All those new parks and streetlights - they bring in rich families who say, wow, that is a beautiful mural, and those brownstones are so cheap. It's a 23% discount.

PERRY: And so we need corrections, but you've got to - we got to find a way to restore value in ways that allows renters to become homeowners so that Black people have an opportunity to invest and benefit from being in those communities.

SMITH: A lot of what Andre suggests involves getting more money into the hands of Black families, whether through better access to loans or by simply sending checks. But he also came up with a proposal that doesn't usually show up on the list of economic solutions.

SNEED: His solution - invest in Black women.

SMITH: Like his mom, Elsie.

SNEED: And like my mom.

SMITH: Frances (ph).

SNEED: (Laughter) Let me go through what Andre is saying here. He's saying there's a cycle of devaluation of Black lives that begins even before birth. Black babies and Black mothers - they receive less prenatal care, have the highest rates of mortality. And this follows Black children and their moms through adolescence and, really, through the rest of their lives.

SMITH: So Andre argues you have to break that cycle somewhere. And there isn't one magical policy to do it. But he thinks it might be as simple as getting more Black women into positions of power - teachers, CEOs, politicians.

PERRY: Policy reflects people's values, and so representation matters. So when Moynihan wrote his infamous report, he clearly did not have Black women by his side because if he did, he would see and understand the value. That's why representation matters, because if they're not there, they will not get the policies they deserve. More likely, they'll get policies that extract wealth and value and respect and dignity from them.

SMITH: And if Black women are there, things like the Moynihan report would read a lot different.

SNEED: Remember that quote that we read from the Moynihan report at the very beginning?

SMITH: I have it right here - "a new kind of national goal - the establishment of a stable Negro family structure."

SNEED: We asked Andre Perry to take one last look at that line and rewrite it, taking into account all the data and research he had done over the past few years.

PERRY: A new kind of national goal - removal of the drag of racism in various markets and the establishment of a federal government that invests in Negro families. Or more plainly, the federal government must see Black people as equal citizens in policy and practice.

SNEED: That's perfect.

PERRY: Yeah. You know, if we're going to take down monuments of all kinds, let's also have a plan to replace them.


SMITH: We always love to hear your feedback, what you think of the show. We're planetmoney@npr.org, also @planetmoney on every one of the social networks - Instagram, Facebook, Twitter and the TikTok.

SNEED: We're on TikTok now. Today's show was produced by Nick Fountain, editing help from Karen Duffin. Thanks, Karen. Alex Goldmark is the senior producer. Bryant Urstadt is our editor. Special thanks to Dr. Nathan Connolly for the book recommendation.

SMITH: I'm Robert Smith.

SNEED: And I'm James Sneed. This is NPR. Thanks for listening.

SMITH: I like it.

SNEED: It's my official radio voice. This is NPR.


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