A tool meant to help minorities buy homes is instead speeding up gentrification in D.C.

Diego Zuluaga

More than 50 years after the passage of comprehensive anti-discrimination legislation, American cities remain highly segregated. The nation’s capital is a glaring example: The D.C. area’s African American residents are concentrated in the Northwest D.C. neighborhoods of Brightwood, 16th Street Heights and Petworth — and, above all, in Northeast D.C. and east of the Anacostia River, where 25 census tracts (the U.S. Census Bureau’s geographic subdivisions) have African American population shares exceeding 90 percent.

Yet Washington is also the most rapidly gentrifying metropolitan area in the United States. Since 2000, 22 percent of D.C. census tracts have seen a large influx of wealthier residents. Gentrification has demographic implications, too. Between 1990 and 2010, the two tracts covering the section of Columbia Heights between 14th and 16th streets saw the black share of the population drop by 20 and 30 percentage points, respectively. The white share in each jumped by more than 20 points.

As they renovate dilapidated buildings and attract new businesses, “gentrifiers” are having a positive impact on many communities. Yet a common downside of gentrification is the displacement of historic low-income residents, particularly renters, who struggle to keep up with a rising cost of living. Now evidence suggests that a major financial regulation enacted to promote financial inclusion may in fact be accelerating displacement, at least in the D.C. area.

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