A Duke economist who specializes in real estate economics says President Obama's plan to toughen rules against housing segregation is a good idea, though there's only so much government can do.
The Obama administration on Wednesday announced plans to strengthen the 1968 Fair Housing Act. Under the proposal local agencies would have to show how they use federal funds to reduce racial disparities. Failure could result in penalties. "There are limits as to what federal or other governments can do, because households naturally separate by socioeconomic class, demographics and to some extent by race," says Charles Becker, an economics professor at Duke University whose research interests include the economics of trailer parks. "Young, childless single people prefer to live in reasonably high-density areas near one another; older households with children prefer suburban communities, for example."
Some wealthy households with high demands for public services also try to avoid subsidizing lower income and other wealthy households that also want these services, in particular schooling, he says. "As much local spending is funded by local property taxes, the result is the formation of homogeneous suburban communities. In essence, zoning excludes poorer households that are property tax free riders," says Becker, associate chair and a research professor in Duke's Economics Department.
There is evidence that blacks and Hispanics face tougher barriers when it comes to obtaining home loans, thereby exacerbating racial separation, he added.
Becker's research interests include the economics of transition, economic demography, and urban and real estate economics. He also teaches a hands-on urban economics course that focuses heavily on Durham.
Becker says the proposed Housing and Urban Development rules and mandated goals are "a good idea, and the downside seems modest."
"However, I'd guess that natural social and economic trends may have larger impacts," he says.
Becker cited transitions in some central cities toward housing higher socioeconomic groups, which Becker says could increase the suburbanization of poverty.
"For that reason it is all the more important for suburban communities to recognize and address the need for racial and socioeconomic integration," he says.