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On the Impact of Federal Housing Policies on Racial Inequality

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  • Omer Ali

Abstract

Using data on the value of Federal Housing Administration (FHA) mortgage insurance between 1935 and 1939, I estimate the effect of the agency's program on racial disparities in home ownership and home values. The distance between an FHA office and counties within its jurisdiction is used as an instrument. I find that insurance activity had a negligible effect on the racial gap in home ownership and a sizable effect on the gap in home values. Results suggest that while African American households continued to acquire homes, they may have chosen lower-priced properties, as they lacked the same access to credit as White buyers.

Suggested Citation

  • Omer Ali, 2022. "On the Impact of Federal Housing Policies on Racial Inequality," AEA Papers and Proceedings, American Economic Association, vol. 112, pages 229-233, May.
    • Handle: RePEc:aea:apandp:v:112:y:2022:p:229-33
    DOI: 10.1257/pandp.20221105
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    More about this item

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • N22 - Economic History - - Financial Markets and Institutions - - - U.S.; Canada: 1913-
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
    • R38 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Government Policy

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