Housing Market Constraints and Spatial Stratification by Income and Race

This article addresses the extent to which housing market constraints contribute to spatial stratification of the U.S. population by income and race. Differential patterns of residence based on income and race may result from local and federal regulatory policies or from housing market discrimination by private and public actors. Income homogeneity within communities results directly from local control over taxes, public services, and land use. The empirical literature shows that local regulations have effects on housing prices that tend to exclude low and moderate-income households. These regulations are also likely to promote racial segregation because of the correlation between income and race, although the magnitude of this effect is unclear. Discrimination by government and private actors directly generates spatial segmentation based on race and ethnicity. While federal policy could alleviate these patterns, current and past federal policy initiatives have themselves increased stratification based on income and race.