Starting in the 1930’s, America started finding ways to separate Whites and Blacks when it came to housing. The first was Redlining, a scheme approved by the FHA (Federal Housing Administration) that approved mortgage loans to white areas, while not approving loans to black areas.
As a result, most of the Blacks (and minorities) ended up living in “Public Housing”, usually located a city’s downtown area. Urban Renewal was supposed to make all areas livable — instead it further displaced Black and Latino homes, usually in exchange for more highways. Also another byproduct of keeping Blacks away from owning, is that usually the best they could do is to rent homes. You don’t gain wealth by renting.
In 1968, President Lyndon Johnson signed the “Fair Housing Act”, therefore eliminating “race” when it came to getting housing. This in effect allowed Blacks (and minorities) to finally own homes in white suburban areas. However, real estate agents and others introduced Blockbusting, which was the process of making white owners sell their homes (playing on the fears that blacks will eventually make home rates go down), and in exchange the agents would sell their homes to minorites at a much higher rate than before. This also greatly contributed to what we know as “white flight”.
In the end, as white people left neighborhoods, so did the resources and loans. Therefore, areas that were once white, that became mostly black, were run-down as years passed. In addition, the property value of these homes in majority black neighborhoods were significantly less than the property value in a white neighborhood, mostly due to lack of demand.
And since most American families’ wealth is directly attributed to the value of their real-estate (homes/property), that means that by default the average black family was worth less than the average white family (1/8th to be exact). Doesn’t matter if the income at work is the same amongst both races, the wealth is what matters the most — especially when passed down to future generations.
This was all due to institutional racism brought by government housing associations and real-estate agents, all because of the color of one’s skin.
And that’s the real reason why there’s a huge Black / White wealth gap in America today.