By Robert Davis
Part II of a four-part series examining gentrification in Denver, its history, causes, and where our city is going next. Part II explores the connection between gentrification and historical segregation in Denver neighborhoods.
Tom Romero keeps a stack of old Denver neighborhood covenants in his office.
As a law professor at the University of Denver, Romero uses the covenants for his personal research and to pose a question to his students: what does skin color have to do with property law?
“There’s a lot of documentation of people coming to Denver who don’t see a color line,” Romero said. “I think that people still don’t see it today.”
During the early 1900s, Denver was 95 percent white. That number dipped to 52 percent in 2012, according to data compiled by Confluence Denver.
Now, Denver’s white population rests around 68 percent and shows no sign of dipping any time soon.
Though past local ordinances show Denver never had a de jure (by law) color line like Atlanta’s Ponce de Leon Avenue, which divided the black and white sides of town, de facto (by circumstance) economic segregation has always thrived in the Mile High City. Evidence of which can be found in the state’s housing market and public school system.
“We are definitely seeing a significant composition shift in the racial and ethnic makeup of the Denver region and that rate of change is the biggest change,” said Jennifer Newcomer, director of research at Gary Community Investments.
The Metro Denver Economic Corporation estimates the city’s Hispanic population has decreased by about nine percent, while the Black population has been slashed in half since the last census in 2010.
At the same time, The State of Working Colorado 2017 report published by the Colorado Center on Law and Policy states that “people of color in Colorado are disproportionately low-income, face higher unemployment and poverty rates, and are more likely to live in high poverty neighborhoods.”
According to analysis by Zillow, these economic factors increase the competitiveness of the housing market for Blacks and Hispanics, with each group having roughly 40 percent of Denver’s homes available to them based on their median income.
Using Zillow’s analysis, which accounts for a homeowner spending no more than 30 percent of their median income on housing, Black and Hispanic residents would be restricted to purchasing homes under $340,000. The median home value in Denver is currently $416,000.
If a person of color were to purchase a single family home at this price, they would have to look primarily in Stapleton, Montbello and Elyria-Swansea. Each neighborhood has poverty rates above 20 percent, and have high concentrations of people of color.
Data complied under the Home Mortgage Lending Act from 2017 shows that mortgage lending for people of color is still denied at twice the rate of whites.
Conversely, white homeowners in Denver, who have a median income of nearly $30,000 more than people of color, can afford nearly 77 percent of Denver’s homes. These economic conditions force families of color to look for cheaper housing outside of the city, where work can be both scarcer and further from home.
This is starkly reticent of Denver’s past.
One example of how restrictive Denver’s housing market was in the past can be found in the story of the city’s first registered black dentist, Thomas Ernest McClain, great-grandfather to Terri Gentry — a board member at the Black American West Museum, a Curtis Park monument to black history — who had a cross burned on his front lawn after a white neighbor found out a black man had paid to have a house built in his neighborhood. Gentry told her grandfather’s story to the Colorado Trust.
McClain attempted to move onto York Street in Whittier during the 1920s. At that time, real estate agents could have their license revoked for selling property to someone of color, including African Americans, Jewish people, Asians and Latinos. White neighborhoods often protected their racial composure with bombings, arson, vandalism, and death threats.
If a white private owner was caught selling a home to a person of color, the ramifications could be just as bad.
In the 1930s, President Roosevelt created the Homeowners’ Loan Corporation to design “safety maps” with real estate brokers. These maps ultimately guided the FHA’s practice of redlining neighborhoods so banks knew which ones to lend in and which ones to avoid.
These factors made it much more difficult for people of color to purchase houses, oftentimes resulting in paying a premium price to their real estate agent for housing if they were lucky enough to coerce one into selling them a home.
McClain ended up purchasing another house on Marion Street near 26th Avenue, where he could enter through an alley and not be seen by his white neighbors.
Today, a similar restrictiveness abounds. Analysis by the National Bureau of Economic Research shows that people of color are more likely to be offered a high-cost mortgage than whites, even if they have a similar financial profile.
Wells Fargo, Colorado’s largest housing lender, agreed to pay over $175 million to settle a lawsuit accusing the bank of racially restrictive mortgage lending practices in 2015. In 2018, the bank settled another mortgage suit, this time for inflating the earnings of some applicants so they could qualify for a subprime loan, to the tune of $2.09 billion.
Predatory lending of this sort has roots in the post-Civil War era. America was beginning to develop its financial economy where stocks, commodities, and other get-rich-quick schemes emerged for the entrepreneurial capitalist class.
A study by the Brookings Institute shows that banks were given free reign of assigning interest rates to loans as they saw fit. Ultimately, that meant lower rates for whites and higher rates for people of color.
“In many ways, Denver has a hard time defining what [development] is ‘good,’ and that inability greatly affects what we’re seeing today,” Romero said.
Romero points to the Denver public school system to make his point. In cities such as Stapleton, which was named after the state’s first Klan member mayor, Benjamin F. Stapleton, school board meetings have largely dealt with the tenant boundaries which draw from predominantly black neighborhoods.
According to enrollment projections by Denver Public Schools in partnership with Gary Community Investments, Stapleton is expected to see a 1,100 student increase by 2021 because of nearly 5,000 additional homes being built in the area.
“There are a lot of apartments being built in the area. Not many of which are capable of supporting families. And, even if they were at that size, they are not at price point to support them,” Newcomer said.
Gentrification of this character and magnitude can be successful only if the community witnessing it is indifferent to its larger effects. Denver has seemingly made an art form out of its redevelopment. As new Denverites continue to cycle in, it remains unclear whether the city’s past will remain it’s present, or become buried in a landfill. ■