Deck 8: Inequality in Housing and Wealth

Question 1

1 percent of Americans own nearly half of the wealth in the United States.

Answer 1

True

Question 2

The top 20 percent of the U.S. population controls over 80 percent of the wealth.

Answer 2

True

Question 3

In the early 1900s, U.S. cities were already hypersegregated.

Answer 3

False

Question 4

One of the primary factors responsible for inequality in the wealth portfolios of Black and White families in the United States is disparities in healthcare costs.

Question 5

Blacks are 2.7 times more likely than Whites to be denied mortgages.

Question 6

Native American homeowners were much more likely than Blacks to receive loans with unfavorable conditions such as prepayment penalties and high interest rates.

Question 7

The only group that, on average, lives in a primarily White neighborhood is Asians.

Question 8

Affluent Blacks and Latinxs live in neighborhoods with fewer resources than poor Whites.

Question 9

Blacks and Latinxs derived much less proportions of their wealth from their homes than Whites.

Question 10

One of the most longstanding consequences of segregation is that Black families in Black neighborhoods are unable to build up home equity and therefore lag far behind White families in wealth accumulation.

Question 11

Steering is a practice in which real estate agents show homes in White neighborhoods to Blacks and homes in Black neighborhoods to Whites in an effort to integrate communities.

Question 12

The Federal Housing Administration was established primarily to protect the rights of Black homeowners.

Question 13

Racial violence against Blacks who tried to move into White neighborhoods continued well after the civil rights movement of the 1960s.

Question 14

Racial disparities in lending practices are almost entirely due to lower credit scores among Black and Latinx applicants.

Question 15

Compared with other racial groups, Latinxs and Whites have the highest segregation index.

Question 16

What is wealth?

A) The net value of a person's house and cars
B) The sum total of a person's assets, minus debt
C) A person's annual income
D) The combined income of members of a family

Question 17

Melvin Oliver and Thomas Shapiro make a case for _______ as a proactive means of narrowing the wealth gap.

A) residential segregation
B) racially restrictive covenants
C) asset-based social policy
D) race-based channeling

Question 18

Which of the following is one of the primary driving forces behind racial disparities in wealth?

A) affirmative action
B) home ownership
C) job training
D) annual income

Question 19

James lives in low income housing in a neighborhood that is 90 percent non-White. James' neighborhood can be described as:

A) a racially restrictive covenant
B) residentially segregated
C) having high property value
D) an ethnic enclave

Question 20

Racial violence, racially biased real estate practices, and federal housing programs that favored Whites are all forces that resulted in:

A) income inequality
B) residential segregation
C) the wage gap
D) urban isolation

Question 21

Policies, such as the National Association of Real Estate Boards' guidelines which prevented realtors from selling homes to non-Whites in White areas, are an example of:

A) racially restrictive covenants
B) whitening
C) predatory lending
D) asset-based social policy

Question 22

What was the motivation behind real estate practices that prevented the sale of property within certain areas to non-Whites?

A) Real estate agents refused to work with African American clients and so they were able to justify their discrimination by claiming that there were no houses available to show in certain neighborhoods.
B) Real estate agents knew that Whites preferred to live in all White neighborhoods and that Blacks prefer to live around other Blacks to avoid microaggressions.
C) Federal housing guidelines dictated that real estate agents could only show Blacks houses in segregated communities.
D) Real estate investors believed that racially stable, all-White neighborhoods were the most likely to increase in value over time.

Question 23

When the Fair Housing Act made racially restrictive covenants illegal, which of the following tactics did real estate agents use to maintain residential segregation?

A) predatory lending
B) racial violence
C) steering
D) hypersegregation

Question 24

Whites disproportionately benefited from U.S. housing policies because it was easier for White people to purchase homes and:

A) to secure subprime loans
B) the homes that Whites bought increased in value more rapidly because of the perceived desirability of all-White neighborhoods
C) unlike Blacks who have more invested in stocks, most Whites' wealth comes from their homes, which never depreciate in value
D) Latinxs were unilaterally banned from taking advantage of FHA loans due to immigration policy reforms

Question 25

Not only are Whites able to significantly build their wealth though housing, but that wealth can help perpetuate wealth inequality because:

A) it will then be passed on to future generations through inheritances
B) these houses will continue to appreciate in value even during recessions
C) once a neighborhoods becomes primarily White, it will always remain White and keep property values up
D) Whites are more likely to invest their wealth in their local communities

Question 26

Pawnshops and high-fee check cashing services are examples of:

A) subprime loans
B) racially segregated services
C) predatory lenders
D) ethnic enclave economies

Question 27

Subprime loans are:

A) loans designated for use in urban markets
B) high-interest loans given to people at high risk of defaulting
C) loans reserved for home buyers who have at least a $100,000 down payment
D) low-interest loans subsidized through the Federal Housing Act

Question 28

Two tools which help us quantify residential segregation are:

A) the dissimilarity index and the isolation index
B) school busing maps and voting districts maps
C) the U.S. Census and the unemployment rate
D) the Gini coefficient and the employment-population ratio

Question 29

Why do scholars sometimes refer to African Americans in urban areas as hypersegregated?

A) Because African Americans prefer to live around other African Americans and therefore purchase properties in urban areas
B) Because urban residential segregation is unique in that it is also associated with higher property values and therefore more wealth
C) Because unlike other non-White groups, African Americans are keenly aware of the negative effects of residential segregation are constantly working to escape it
D) Because compared to other racial and ethnic minorities, African Americans experience notably high levels of segregation

Question 30

Racial segregation is often associated with ________, which in turn leads to under-resourced neighborhoods with poor public schools, high levels of crime, and high unemployment rates.

A) low literacy levels
B) concentrated poverty
C) low-skilled jobs
D) hazardous waste sites

Question 31

Why did the housing crisis hit Blacks and Latinxs harder than Whites?

A) Blacks and Latinxs derive more of their wealth from their homes than Whites
B) because they also had significantly more investments in the stock market than Whites and so they were hit my housing market and stock market crashes
C) because their houses had appreciated in value much faster than those of Whites
D) because they were more likely to have paid off their homes, so they lost the entire value of their homes when they went into foreclosure

Question 32

Which group(s) was/were most likely to receive a subprime loan during the 1990s?

A) Whites
B) Blacks and Latinxs
C) Native Americans and Asians
D) Asians

Question 33

Thomas Shapiro, Tatjana Meschede, and Sam Osoro published a study that attributed the wealth gap to five factors, including years of homeownership, household income, years of unemployment, inheritances, and:

A) propensity to build savings
B) years of incarceration
C) college education
D) consumption patterns

Question 34

Mary is an African American woman who wanted to buy a home, but did not qualify for a traditional mortgage. She had no choice but to take a high interest rate loan, which initially she was able to afford but then the interest rates doubled and she was forced to foreclose. What type of loan did Mary likely have?

A) subprime
B) FHA
C) Pell
D) open-ended

Question 35

Which best describes how racial inequities manifest in mortgages for homeownership?

A) Black and White applicants are equally likely to be approved for mortgages but Black individuals are more likely to pay higher interest rates.
B) Black applicants are much more likely to be denied mortgages but when they do receive them, they pay the same interest rates as Whites.
C) Blacks are much more likely than Whites to be denied mortgages and when they do qualify they are more likely to pay higher interest rates than Whites.
D) New federal regulations have ended racial disparities in the mortgage process.

Question 36

What is the relationship between race and class in terms of neighborhood segregation?

A) Concentration in an underresourced neighborhood depends entirely on class, not race
B) Only poor Black and Latinx families tend to experience hypersegregation in underresourced neighborhoods
C) Both poor and middle-class Black and Latinx families experience hypersegregation in underresourced neighborhoods, but affluent families are shielded from segregation
D) Black and Latinx families of all economic statuses, including the affluent, are more likely than White families to live in underresourced neighborhoods

Question 37

According to a study by Krysan and Farley, which of the following statements is true about neighborhood segregation and preferences among racial groups?

A) Both Black and White individuals prefer to live in segregated neighborhoods.
B) Most White individuals prefer to live in predominantly White neighborhoods.
C) Most Black individuals prefer to live in predominantly Black neighborhoods .
D) Both Black and White individuals prefer to live in mixed neighborhoods.

Question 38

Which factor accounts for wealth gaps between Black and White families with the same levels of educational attainment?

A) African American families tend to purchase homes later in life because they face more obstacles in home buying than White
B) Black homeowners are less likely to build up equity over the years because of residential segregation
C) White families are more likely to receive financial assistance in purchasing a home from their family members.
D) All of the above

Question 39

Which of the following is an example of an asset-based social policy?

A) A city government invests money in a working-class Black neighborhood by building a transportation hub.
B) The federal government sets strict asset tests for qualifying for a mortgage that disproportionately advantages White applicants.
C) A mortgage company targets Black and Latinx families for loans with very high interest rates.
D) All of the above

Question 40

Explain how wealth inequality and income inequality are different, yet linked.

Question 41

Define residential segregation. Explain how racial violence, racially restrictive covenants, steering, and FHA guidelines led to residential segregation in the United States.

Question 42

Specify one way in which America's legacy of residential segregation has shaped wealth inequality between Blacks and Whites today.

Question 43

Identify and discuss how U.S. government housing policies, passed between 1933 and 1978, increased the wealth of Whites, while denying the same opportunities to African Americans.

Question 44

What is a subprime loan? How might you argue that banks' subprime lending practices illustrate contemporary racial disparity in the housing market?

Question 45

What is the difference between the dissimilarity index and the isolation index?

Question 46

Use the concept of hypersegregation to illustrate the difference between the typical residential patterns of African Americans and Native Americans.

Question 47

Is racial segregation in the housing market is still a problem in U.S. society? Provide two pieces of evidence for your answer.

Question 48

Explain how racial segregation exacerbates existing racial inequalities in the United States.

Question 49

Why is racial segregation a problem in need of a solution? In making your case, draw on at least three specific findings presented in Chapter 8.

Question 50

Is it correct to state that residential segregation is due to African Americans' preferences to live among other African Americans? Why or why not?

Question 51

Explain why, between 2007 and 2009, African Americans and Latinxs were twice as likely as Whites to undergo housing foreclosures. How might you argue that these disparities in housing foreclosure are shaped by the legacy of the U.S. government housing policies passed between 1933 and 1978?

Question 52

Discuss two specific reasons that Whites tend to have more wealth than African Americans. Do you think "asset-based social policies" could effectively reduce racial wealth disparity? Why or why not?

Question 53

Shapiro, Meschede, and Osoro conducted a study in which they sought to explain why the wealth gap between Black and White Americans tripled between 1984 and 2009. Do they find that this wealth disparity is due to behavioral differences, such as the inclination to build savings? Explain.