The articles summarized below prove that Black Americans pay higher for certain goods and services than Whites.
- Dirk W. Early, Paul E. Carrillo, and Edgar O. Olsen analyzed an unusually rich data set to determine racial differences in the rents paid for identical housing in the same neighborhood in the U.S. Their research revealed that “households led by blacks pay more for identical housing in identical neighborhoods than their white counterparts.”
- Additionally, the research revealed that the rent gap increases with the fraction of the neighborhood white. “In neighborhoods with the smallest fraction white, the premium is about 0.6 percent. In neighborhoods with the largest fraction white, it is about 2.4 percent.”
Rent Application Fees
- An analysis done by Zillow indicated renters of color are disproportionately impacted by how application fees are charged by companies. The research was done to understand why the upfront costs of renting differ So widely.
- According to their analysis, only 56% of white renters pay application fees while 73% OF Latinx and Black renters are required to pay rent application fees.
Banking Costs and Fees
- Research done by New America revealed that racial discrimination exists between the fees blacks and other minorities are charged in order to maintain their checking accounts.
- According to New America, “the average individual white person can expect to pay a maintenance fee of $6.09 while average black, Latinx, and Asian individuals pay nearly $1 more for the same fee.”
- Another survey by Bankrate indicated that Blacks and Hispanics incur more checking account costs when compared to whites. Blacks incur on average a fee of $12.30 while whites incur on average a fee of $5.29.
- Michelle Aronowitz, Edward L. Golding, and Jung Hyun Choi conducted research to understand the unequal costs of black home ownership.
- Their research revealed that black homeowners pay higher mortgage rates at origination.
- Blacks homeowners pay about $250 per year more in interest charges for purchase loans. This translates to 33 bps more on their mortgages compared to white homeowners.
- Another research done by Realtor.com confirmed that black homeowners are being charged higher mortgage rates than their white counterparts. According to Realtor.com analysis, “Homebuyers in predominantly Black communities are being issued loans with mortgage interest rates that are 13 basis points higher than in predominantly white communities.
- Carlos Avenancio-León and Troup Howard conducted extensive research covering over 118 million homes aimed at identifying why local governments place a disproportionate fiscal burden on racial and ethnic minorities.
- Their research revealed that black and Hispanic residents are charged up to 10-13% higher tax burden for the same bundle of public services offered to Whites.
Auto Insurance Costs
- Research done by CFA analyzed the high price of mandatory auto insurance in predominantly African American communities. Their research revealed that:
- “In communities where more than three quarters of the residents are African American, premiums average 70 percent higher than in those with populations that are less than one quarter African American ($1,060 vs. $622).
- In the densest urban communities, the average premium in predominantly African American ZIP codes is 60 percent higher than the average premium in equally dense predominantly white urban ZIP codes ($1,797 vs. $1,126).
- In rural ZIP codes, the average premium in predominantly African American ZIP codes is 23 percent more than the average premium in rural, predominantly white ZIP codes ($669 vs. $542).
- The average premium in upper middle-income, predominantly African American ZIP codes is 194 percent higher than the average premium charged to a similarly situated driver in an upper middle-income, predominantly white ZIP code ($2,113 vs. $717). Communities where more than three quarters of the residents are African American, premiums average 70 percent higher than in those with populations that are less than one quarter African American ($1,060 vs. $622).”
- Another research done by ProPublica and Consumer Report also corroborated the conclusion that minority neighborhoods pay higher auto insurance premiums than white areas with similar payouts on claims. According to their analysis, “major insurers charge minority neighborhoods as much as 30 percent more than other areas with similar accident costs.”