100 Years After Tulsa Massacre, Black Property Investment Has Never Recovered
A century ago, the Greenwood District in Tulsa, Oklahoma, was a mecca for Black entrepreneurs and business people looking to expand their investments, including into residential and commercial real estate. The 40-acre district became known as Black Wall Street, and at this moment 100 years ago, it was close to its peak.
But on May 31, 1921, a horde of White Oklahomans, angered by the success of the prosperous Black community, tore through the neighborhood, killing at least 75 people and destroying $1.5M in property, equivalent to over $20M in today’s dollars. Despite the loss, the Black community built the neighborhood back up again into the 1940s, when hundreds of Black-owned businesses thrived again.
It didn’t last. The widespread brutality and property theft of the Jim Crow era, followed by discriminatory zoning and lending policies, all but barred Black property investment. The country has made little progress toward rebuilding a new Black Wall Street, where the descendants of slaves can finally start to accumulate generational wealth.
“[Tulsa] was an example of how even in the face of Jim Crow segregation, how Black entrepreneurship thrived,” said Lamont Blackstone, principal at G.L. Blackstone & Associates and chairman of Project REAP, a mentorship program for people of color in commercial real estate. “We know full well the history of labor and how African Americans were deprived of the rights to their own labor, but we don’t see enough about the ugly history of how African Americans were deprived rights to property.
"One of the reasons why it’s important to have income-producing property is to overcome that historical legacy."
The wealth of the average White family is tenfold that of the average Black family, according to the Brookings Institute. The disparity is overwhelmingly driven by the racial homeownership gap, according to the Economic Policy Institute. Owning one’s own property is critical capital that has historically been used as a springboard for entrance into commercial real estate investment, experts say.
“Black people were systematically shut out of homeownership through policies like Jim Crow [and] redlining,” said Pablo Bose, a professor of geography at the University of Vermont, who has done research on the geography of race. “That’s not something that is just from the past, it still has an impact today.”
Black people are still denied mortgages 80% more than White people, according to 2020 data from the Home Mortgage Disclosure Act, CNBC reported. A Northwestern University study found that the rate at which Black people were denied mortgages hasn’t fallen much over the past 35 years.
There is no data for Black commercial property ownership rates like there is for mortgage and homeownership, said Kirk Sykes, a former chairman of the Boston Federal Reserve and board member of the Real Estate Executive Council who now runs development firm Accordia Partners. But commercial real estate is also key to closing the wealth gap, he wrote in a 2019 report for the Urban Land Institute.
“We can begin to address this inequity by exposing people of color in the next generation to the vast opportunities that exist in commercial real estate,” Sykes and his co-authors wrote in the report. “While we cannot go back in time to provide access to jobs, real estate and opportunities ... we can take proactive steps toward leveling the playing field through the commercial real estate industry.”
Closing those gaps would not only create a more equitable society, but a more vibrant and prosperous economy. If racial inequality across sectors of society, including property ownership, were remedied, $5 trillion could be added to the economy over the next five years, according to a September Citigroup report.
"The big point is that discrimination that targets Black families is a net drain on the economy," Center for Responsible Lending Executive Vice President Nikitra Bailey said.
Homeownership is a key factor in securing favorable underwriting for commercial mortgages, Blackstone said. There is a 30.1% homeownership gap between White families and Black families, according to the Urban Institute, even wider than it was 10 years ago. Without the capital that comes from homeownership, it is difficult to secure the financing needed to invest in commercial real estate, Blackstone said.
The dearth of Black-owned residential and commercial property in Black communities has a profound effect on the communities themselves. Companies without Black ownership are less likely to invest in predominantly Black areas.
“Anchor tenants in a particular community ... and the role that they play in it, often goes well beyond the transactional than that, there is a cultural significance,” UVM’s Bose said.
Homeownership is key in accessing commercial real estate in more ways than one. It gives people knowledge about the real estate industry and easier access to higher education, which gives generations within Black families the ability to access the skill set and resources to start out in and make it in the commercial real estate industry, Sykes said.
“It’s kind of every bit as important as getting that mortgage,” Sykes said. “You need to have that skill set.”
Urban Design Center is focused on community ownership of assets in communities of color. Right now, it is working with a family of second-generation landowners to develop commercial real estate on the land the family owns, including a hostel and some multifamily housing.
“I think no matter where you are or who you are, land is important,” said Urban Design Center CEO Sherri Franklin, who has spent 40 years working to direct community-centered development in Los Angeles. “So if you have someone else [outside the community] controlling the land … then they are controlling this life, they’re determining the life you should have, and that is not a democracy and that is not freedom.”
UDC is also looking to create funds that promote community ownership of residential and commercial real estate assets.
“It’s important for people to know in order to be effective in making sure that the local community is a benefactor we have to know what’s happening, we have to make sure to collectively pull resources,” Franklin said. “We also have to do some planning and visioning, we need to discover and create … when we do all that, to me, that’s the antithesis to gentrification.
As gentrification in cities around America continues, grassroots movements empowering Black property ownership have become more present in rapidly changing neighborhoods.
Local iterations of Buy Back the Block, a crowdfunding movement to support Black ownership of real estate, have popped up around the country.
“We’re anti-gentrification, and we’re unapologetic about it,” Buy Back the Block LA founder Daniel Carter told Curbed LA in 2019. “We don’t want to see people who grew up in these neighborhoods get pushed out. This is our neighborhood. This is our culture. These are our streets.”
Community-owned commercial real estate would empower Black businesses, and create a more equitable local economy, Blackstone said.
“It is overall a healthy thing, and it speaks to the democratization of American capitalism, if you have a property owner who is African American in an African American neighborhood,” Blackstone said. “It represents a certain degree of progress and could potentially spur growth in African American business and ownership … It is a healthy thing that there is some ownership and stake in their own built environment.”
But true equality in the commercial real estate industry will happen when Black developers not only own property in communities of color, but a variety of different types of places, he said. Beyond creating a new Black Wall Street, the original should have more pathways for people of color.
“African American property owners need not be limited to minority neighborhoods … we need not be restricted to only buildings in South LA and Harlem,” Blackstone said. “I think there should be Black property ownership on Fifth Avenue as well.”
