This June, CNN Business published an op-ed by Zillow Chief Economist Svenja Gudell about systemic racism in housing, citing seven separate Zillow reports that show “people have been left behind because they are black or brown.”
The reports were created by the Zillow Economic Research team, seven analysts who, among other things, analyze and publish data that sheds light on racial inequities housing. This spring’s wave of protests became a new impetus to “go deeper” on the research, says Zillow economist Treh Manhertz. “Home prices are rising, but for who?,” he says. “Who has a house, who doesn’t? And how can we shed light on systemic racism in housing?”
Manhertz and his colleagues are now continuing to build Zillow’s body of work on racial inequalities that will be shared with industry partners, government policy makers and nonprofits to advocate for change and solutions to systemic racism in housing.
Leveraging Zillow data
Zillow senior economist Cheryl Young has led much of the company’s research on fair housing. She got curious about why people live where they do while riding the subways as a college intern with the New York City Transit Authority. “In some ways, it’s very equalizing in that everyone takes the subway,” she says, “but if you take certain lines through certain places, the demographics of the car completely change.”
It was an inspirational moment that Young thinks about it with respect to her work at Zillow. Racial segregation “isn’t a problem that just exists and there’s nothing we can do about it,” Young says. “At Zillow, we have so much data we can leverage it in a way that’s actually useful and insightful to everyone.”
“I would like to see Zillow continue to have an impact in a measurable way, to lead the charge to dismantle some of these structures that create disparities in the real estate market”– Cheryl Young
In 2019, Young’s research on disparities in amenities (banks, healthcare centers, parks) between white and non-white communities was part of Congressional testimony Zillow gave in partnership with the National Fair Housing Alliance (NFHA). Her analysis of the impact of low-income housing on nearby home values has informed policy debates on gentrification and affordable housing across the country, including the impact of building low-income housing in established neighborhoods.
Zillow is now working on a new round of research with the National Fair Housing Alliance (NFHA) that will highlight key placed-based structural inequities and downstream outcomes for communities of color. Young hopes this work will assist Zillow’s partners in the fight against structural racism. “I would like to see Zillow continue to have an impact in a measurable way, to lead the charge to dismantle some of these structures that create disparities in the real estate market.”
Sources of data for research
To analyze the impact of housing policies and practices, Zillow economists use data the company collects around housing values and real estate transactions, as well as consumer data that people consent to share. They also tap government data, primarily U.S. Census data. The key, says Young, is that the information be “as granular as possible,” with categories like race, income and location.
A project Young led recently married Zillow home value (ZHVI) data to Census and mortgage application data available under the Home Mortgage Disclosure Act. The analysis revealed that lenders deny Black applicants mortgages at a rate 80% higher than for white applicants. Moreover, the research showed homes owned by Black and Latinx homeowners lag behind in value compared to other racial/ethnic groups, illustrating how mortgage denials stymie wealth creation for these groups. Young and colleagues are able to go to policy analysts with this unique and nuanced data to make the case for change.
What’s also important is data integrity and transparency. When possible, the researchers make code and underlying data available so work can be replicated independently. Methodologies are clearly explained. There are honest discussions among team members about personal biases. “Data itself are objective,” says Young, “but the interpretation of it may not be.”
“We need to keep the light on these issues and make sure that, in time, this will not be a new conversation for anyone”– Treh Manhertz
That’s one reason the team has a consulting relationship with members of Zillow’s Black/African Ancestry Network, an employee affinity group. “We brainstorm and try to figure out if there might be different issues that hit home,” says Zillow economist Manhertz. That’s led to a lot of new research topics and new findings, including a recent surge in Black homeownership in a few key regions.
Change takes time
Overall, though, according to Census figures, the black and white homeownership gap remains as wide today as it was 100 years ago. Narrowing that gap will likely take decades, says Zillow’s Chief Economist Gudell. In the meantime, Manhertz and his team will continue to “beat the drum” about research Zillow has on discrimination. “To gain any ground, we need to keep the light on these issues and make sure that, in time, this will not be a new conversation for anyone.”
Young ponders how to find the elusive common ground that can be the foundation for change. For now, she says she’ll continue to point to the foundation of evidence from her team and her belief that truth will prevail.