In my last post, I discussed wealth inequality in Philadelphia, and I showed that almost all of West Philadelphia, North Philadelphia, and the southwestern portion of South Philadelphia are by far the least wealthy areas of the city—by at least a factor of 19. Now we can finally start to discuss why this is the case.


A Short History of Segregation in Philadelphia

My simple answer is the American legacy of racial segregation and discrimination. But, this is a very complex topic, so I can only hope to scratch the surface. I will focus on housing discrimination.

Philadelphia, like the rest of the country, still suffers from the legacy of legal discrimination based on race and ethnicity. It was only about 80 years ago that redlining went into effect. President Roosevelt established the Home Ownership Loan Corporation (commonly known as HOLC) and the Federal Housing Authority (FHA) in the early 1930s in order to combat the growing housing shortage and a stagnant real estate industry. These organizations were given the gargantuan task of evaluating every single property and neighborhood in American cities in order to determine which mortgages the federal government would insure. If the government did not insure the mortgage, it was too risky and expensive for any lender to issue.

HOLC and the FHA created an elaborate series of maps and other documents for their evaluations. Banks and other lenders would then use these documents as guidelines for issuing mortgages. These maps gave different grades depending on the risk of the neighborhood, and the worst grade was denoted by red—hence the term ‘redlining’. These grades were based heavily on race, ethnicity, religion, and the number of immigrants. Thus, the government created racial and ethnic segregation through regulating the private market.

HOLC created real estate maps for more than 250 American cities. Here is the clearest version of Philadelphia’s map that I could find. Check out Mapping Inequality for maps and details from each city, as well as the history outlined above.

holc-scanThe source where I found this doesn’t currently have the area descriptions that accompany the map, so I’ve taken some from Chicago to give an example of the language included.

D-“The population is largely lower class Jewish, but there is at the present time a moderate infiltration of Polish families. The favorable influence of this population shift is minimized by threatening negro infiltration along the eastern edge.”

C-“Future of the section is one of continuing slow decline with the gradual infiltration of somewhat less desirable population elements.”

B-“At the extreme eastern edge of this area there are a few Italian families living along Humphrey and Taylor Streets at the extreme north end. There is also some tendency towards infiltration of Czechs, Polish, and Hebrews in the same neighborhood.”

A-“This area is known as the most exclusive part of Beverley Hills. It is completely surrounded on three sides be a forest preserve. This acts as a permanent buffer against any encroachment of an undesirable nature. At one time, the area was restricted to homes costing a minimum of $40,000.”

These maps were based on the notion that any areas with residents who were non-white, non-native, non-Christian, lower-income, or of unpopular ideology (such as Communism) were undesirable for insuring mortgages. HOLC even denoted areas that might have an influx of these populations as risky. Conversely, areas with highly restrictive covenants (sets of rules determining who can live in a neighborhood), restrictively high prices, and physical isolation were deemed far more worthy of an investment.

However, this cannot be the whole picture. First, a lot has changed since these maps were created. The map above marks many areas as third or fourth grade that are today some of the wealthiest parts of the city, and by far majority white. It also marks some areas as first grade that are today some of the most economically depressed areas, such as the far edge of North Philadelphia.

Additionally, one professor at the University of Pennsylvania, Amy Hillier, makes a great point that these maps are very unlikely to have caused redlining. This is because very few bank executives were actually able to see these maps, and even then, banks often defied the recommendations. More often, a lender would simply give the borrower worse terms rather than flat out deny him. But, she argues, this does not serve to downplay the negative implications of redlining. These maps were the best example of a codification of widespread practices across many private and public sectors. That is, people were already racially discriminating in housing, and the federal government merely supported this trend and furthered its influence—everybody is guilty.

On the other hand, researcher Richard Rothstein emphasizes the role of the government, citing many instances in which local residents attempted to build integrated communities, but were forced to adopt segregationist policies in order to receive the financial backing needed. Rothstein and many others argue that segregation was not natural. To the contrary, integration would have been the natural state of things, since most people want to live close to work. Further, the federal government actively subsidized suburban construction, on the condition that the homes would be for whites only. Many restrictive covenants in suburban communities still have requirements barring non-whites. They remain, apparently, because of the legal difficulty of removing them, and because they have been deemed unenforceable.

Regardless of where we place the largest emphasis, it is clear that American cities were through-and-through segregated, and the federal government and private market both played substantial roles. The bigger questions is, what happened after these maps were made?

There is simply too much history for me to research or report on, but here is my basic understanding. After WWII, most Americans became homeowners through the GI Bill, which followed the racially-motivated guidelines of HOLC and the FHA. Therefore, few black veterans were able to take advantage of the government’s generous homeownership programs. Additionally, “white flight” began to sap cities of wealthier, white residents who wanted to live in the newly-built suburbs. These suburbs continued the trend of redlining, having restrictive covenants, restrictive zoning, and high price points. Post-WWII construction of the highway system went hand-in-hand with this trend, allowing white suburbanites to commute into cities for work. Finally, the post-WWII collapse of manufacturing, which was largely in cities, left most American cities economically depressed. The overall result of these trends was that wealthier, white residents concentrated just outside of cities in suburbs, while everybody else was forced to remain in city centers with an extreme lack of job and housing opportunities.

Since then, American cities have obviously made a comeback. The younger generations are increasingly finding cities more attractive than the suburbs. More people are moving to cities, and for the first time many American cities’ populations are increasing again, Philadelphia included. In fact, Society Hill was one of the first neighborhoods to gentrify as a result of new residents, becoming one of the richest neighborhoods in the city. The gentrification we see today in Fishtown, Northern Liberties, South Philadelphia, West Philadelphia, and the area around Temple in North Philadelphia is the continuing, outward push of this trend. Hence, these are by far the wealthiest neighborhoods with by far the largest white population.

Many claim that unofficial segregation continues today. For instance, Wells Fargo and Bank of America were recently accused of disproportionately denying loans and mortgages to non-whites. The City of Philadelphia is currently engaged in a lawsuit with Wells Fargo over this issue, since Wells Fargo is the largest lender in the city. But virtually every bank and financial institution is in the midst of lawsuits or accusations regarding discrimination. They all deny this, but the issues are mostly still pending.

The State of Segregation Today

Philadelphia remains highly segregated to this day. The Fair Housing Act of 1968 made segregation illegal, but did nothing to remedy the existing impacts of segregation. Below, I’ve explored the extent of segregation and its impacts.

Bear with me—there will be a lot of maps. But it is necessary, since this topic more than any is a spacial topic. Let’s begin by taking a look at the racial distribution of Philadelphia.

Race and Ethnicity

The vast majority of Philadelphians identify as black/African American or as white, and it is about evenly split. A large minority identify as Asian or “some other race”, and very few identify as anything else. It is also important to note that 13.8% of the population identifies and being of Hispanic or Latino origin, but the census considers this an ethnicity that can coexist with race. Of course, the categories are somewhat arbitrary, and force people to categorize themselves, but it is the best tool we have.

With this broader understanding, let’s take a closer look at the geographic distribution of each race or ethnicity by census tract. First, we’ll take a look at where black and white Philadelphians live.

Philadelphia, Black AFAMPhiladelphia, White

That is some pretty stark segregation. Black Philadelphians overwhelmingly live in the portion of West Philadelphia outside of University City, the western half of North Philadelphia, the southwestern portion of South Philadelphia, and somewhat in the northeastern portion of North Philadelphia and in North-Central Philadelphia. Conversely, white Philadelphians live overwhelmingly in Center City, the river wards, Northeast Philadelphia, University City, the western half of Northwest Philadelphia, and all of South Philadelphia except the southwestern portion. They live to a lesser degree in the eastern half of North Philadelphia. We may all disagree about what caused the segregation, but there is no doubt that segregation is alive and well.

The next largest groups are those identifying as “some other race” or as of Hispanic or Latino origin. I’ve grouped these together because they seem to overlap on the map, suggesting that many Hispanic or Latino Philadelphians don’t necessarily identify as the races listed on the census.

Philadelphia, One Race Some Other RacePhiladelphia, Hispanic Latino

Clearly, Hispanic and Latino Philadelphians are also heavily segregated, living mostly in the eastern portion of North Philadelphia. Interestingly, this is the same region that has a sizable, but not majority group of both black and white people.

Next, let’s look at the map of Philadelphians identifying as Asian.

Philadelphia, Asian

This is not nearly as clear as the other maps. However, what is evident is that most Asian Philadelphians live in Center City (around Chinatown), the eastern portion of South Philadelphia, University City, and in Northeast Philadelphia. It seems Asian Philadelphians are also somewhat segregated. But, I think because there are relatively few Asian Philadelphians, any trend in population distribution is much harder to see.

This holds true to an even greater extent for Native American populations in Philadelphia, who account for 0.5% of the population. I was curious to see if even such a small population is segregated in Philadelphia, but it seems there is no trend whatsoever.

Philadelphia, American Indian Alaska NativePhiladelphia, Hawaiin Pacific Islander

To wrap up the distribution of races and ethnicities in Philadelphia, take a look at this (fantastic) map that combines all of this data in a simpler way (I won’t show an image for copyright reasons). It uses the same data, but with less detail. It is good for an overview.

The Continuing Impacts of Segregation

Now, recall the distribution of income, wealth, life expectancy, and all of the other factors examined in earlier posts. I’ll pull up my earlier map of median household income as one example.

Philadelphia Income 2016_edited-1
Median household income, 2016 5-year average.

Now compare that to the distribution of race and ethnicity in Philadelphia. I’ve made my own attempt at a comprehensive map below. Overlaying it with the income map proved to be a bit challenging, so I made two versions to leave it up to the viewer’s taste—one combined and one not combined. Also, note that the individual tracts can overlap, and the colors combine in those areas. Finally, I couldn’t get rid of the word “Philadelphia”, so now there’s an imprint of it in Center City. That area is light to dark purple.

Race Ethnicity Maprace-and-income_edited-1.jpg

These maps may need some explanation. What I’ve done is overplayed the highest two population categories from the maps above for each race or ethnicity. None or almost none of the highest categories overlapped, but the second highest did. So, I made them transparent so we can see the overlaps. For the second map, I overlaid the median household income as the borders of census tracts so we can compare this with race or ethnicity. I personally find the map a bit “noisy” with information, but it is very useful if you take the time to break it down.

Clearly, areas of the city with primarily black or Hispanic residents are earning far less than any other areas—especially predominantly white areas. Likewise, majority white areas earn far more than anybody else. There are some exceptions. Notice that the far edges of West, Southwest, and North Philadelphia are closer to middle income. Also, the majority-white areas have incomes from the middle of the range to the highest end. Mixed-race areas seem to be closer to the middle of the range.

To illustrate this disparity more clearly, I’ve pulled data on all of Philadelphia for each race and ethnicity classification, as seen in the chart below.


We can see from this that the racial segregation maps out almost one-to-one with the economic segregation of the city. The same holds true for life expectancy, most health outcomes, wealth, and really any aspect impacting quality of life.

Perhaps one of the most important indicators to look at is homeownership. Remember, homeownership is by far the largest form of wealth that Americans have today. Unless you are incredibly wealthy, your home is probably your only substantial asset, even including cash in the bank and your car. Therefore, looking at the homeownership rate and home values is the best way we have of determining the wealth disparity of races or ethnicities in Philadelphia.

Let’s take a look at the data. One major note—data on home value by race or ethnicity is not currently available online for any year but 2000. A lot has happened since then, including the 2008 Crash. I’ve scaled the data to 2016 dollars, but there has clearly been a lot of appreciation of home values as well. Since we don’t know how this impacts different races, I did not scale the inflation-adjusted values to the overall appreciation of values.

Homeownership Rate by RaceHome Value

Surprisingly, the homeownership rate doesn’t vary nearly as much as I would expect. Still, there is an overall trend of a higher homeownership rate for white Philadelphians. The same trend holds true for median home values, but with a much more extreme disparity. I believe this disparity has likely grown considerably since then. This is based on comparing the maps of racial distribution and median home values in 2016, and the chart of median home value by race in 2000.



From these maps, we can infer that median home values have remained fairly steady in the non-white areas, but have increased considerably in the majority-white areas. For instance, the areas with median home values ranging from $40,900 to $109,000 in 2016 are also predominantly black and Hispanic. Eighteen years ago, black and Hispanic Philadelphian’s homes were worth a median of $62,856 and $55,918, respectively. That is still within the lowest range in 2016. White Philadelphians’ homes were worth $100,319 in 2000. However, the majority-white areas of Philadelphia today have home values  of several hundred thousand dollars. Clearly, the economic growth of Philadelphia has not touched each neighborhood equally. In this way, homeownership is by far the largest driver of the racial wealth gap, and this all began with discriminatory practices almost one century ago.

Unfortunately, due to the limitations of the data, I cannot tell you the exact extent of today’s racial wealth gap in Philadelphia. But this is a popular research topic nation-wide, and I can show you one such example. This source, based primarily on the Survey of Consumer Finances, shows that the wealth gap is larger than ever. In 2016, the median white family’s wealth was $171,000, the median black family’s wealth was $17,409, and the median Hispanic family’s wealth was $20,920. In other words, the typical white family is 10 times wealthier than the typical black family and eight times wealthier than the typical Hispanic family.


Like Richard Rothstein, I argue that all other racial disparities stem from this. Non-white families were denied homeownership opportunities and equal terms in mortgages for homeownership opportunities. This is continuing today, though illegally and less explicitly. Since homeownership and home value by far account for the largest portion of American wealth, this means that non-white families have been denied significant resources. This has continuing effects. For instance, families have passed on their homes to their children, and their homes have appreciated greatly in value. Further, white families have had the benefit of living in neighborhoods with far better opportunities, such as better schools (funded largely by local property taxes), job opportunities, transportation, healthy food access, and overall quality of life. Non-white families were forced to live in city centers with very few of these opportunities.

This discrimination accounts almost entirely for the stark inequality and poverty that we see today in Philadelphia. While I believe it is equally important to examine all of the other manifestations of discrimination, such as in the disparity of life expectancies, I think these are the symptoms of systematically denying a population resources.

In sum, Philadelphia’s immense inequality and high poverty rate can almost entirely be explained by racial discrimination. Non-whites were forced to live in city centers, and they were denied homeownership opportunities. Philadelphia is one of the most prominent examples. Therefore, today Philadelphia has a very large non-white population with a much lower homeownership rate, homes worth far less than their white counterparts, and far fewer job and education opportunities. The suburbs and recently-gentrified parts of the city, on the other hand, have a very high proportion of white homeowners with valuable homes.

Understanding what has caused this disparity is essential for remedying it. This was not an accident, nor is it the fault of work ethic or luck. Rather, our society has been carefully engineered to keep (certain kinds of) whites separate from everybody else, and to ensure that resources are heavily concentrated within this group. If we engineered it this way, we can just as well undo this.

Soon, I will start posting on my recommendations to change Philadelphia into a more equitable and fair society. But first I still need to cover at least education, food, transportation, and the role of government in social services. I was eager to put this post out there, since it is so central to my argument.