CENTRO JOURNAL

Volume XXI Number iSPRING 2009

SEGREGATION PATTERNSIN METRO AREAS:

LATINOS AND AFRICANAMERICANS IN 2000

WILLIAM VÊLEZ, MICHAEL E . MARTIN, AND EDGAR MÉNDEZ

ABSTRACT

This paper is based on a comparison of residential

segregation (D) scores for Anglos, Blacks, Latinos,

and Latino subgroups at the metropolitan area level.

The results for Puerto Ricans show that where

Puerto Ricans and Anglos have similar levels of

suburbanization and similar levels of income,

residential segregation declines. Similarly, as the

gap in owner-occupied housing values between

Puerto Ricans and Anglos narrows, their residential

segregation declines. Finally, in metro areas where

Latino denial rates exceed the Anglo denial rates,

residential segregation increases. [Key Words:

Residential Segregation, Spatial Assimilation, Place

Stratification, Discrimination, Suburbanization,

Immigration, Income Inequality}

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MASSIVE LATINO IMMIGRATIONAND CHANGES IN THE AMERICANECONOMY ARE AFFECTING THEnature of residential segregation of Latinos in the United States. Historically,residential segregation of immigrants has been viewed as a system of voluntarysocial and economic isolation in inner-city residential neighborhoods. As thesecond and third generations experience socioeconomic mobility, there isgeographical dispersion and movement into the mainstream (Park 1926: Lieberson1980). This model has been found to work best for immigrant groups who haveEuropean origins, but has been inadequate when dealing with the unique problemof racial exclusion faced by African Americans and Latinos of African origin(Myrdal 1944; Jackson 1985; Massey and Dentón 1993). Although there is nogenerally accepted theory of Latino residential segregation, it has generally beencompared to the spatial assimilation model and is not seen as related to structuralinequalities (Massey and Dentón 1987).

Massive increases in Latino immigration and the restructuring and globalizationof the American economy confound traditional explanations and justify the needto develop a residential segregation theory that relates specifically to Latinos andLatino subgroups.

Residential segregation plays a crucial role in perpetuating urban poverty andracial injustice in the United States (Massey and Dentón 1993). Residential segregationhas been linked to a host of social ills, including increased health risks factors,educational disadvantages, concentrated urban poverty, economic disinvestments,crime, social disorder, and housing inequalities (Settles 1996; Kasarda 1993; Masseyand Dentón 1993; Brookings Institute 2001). Racial segregation is also an importantfactor in the development of urban "ghettos," "barrios," and "slums" (Jargowsky 1997).

There is strong evidence that immigration patterns and economic restructuringare producing structural patterns of residential segregation for Latinos (Suro andTafoya 2004). This paper addresses the central issue of whether the residentialsegregation of Latinos, Latino subgroups, and African Americans in 2000 isconsistent with the spatial assimilation model or with the place stratification model.

This paper tests the adequacy of the spatial assimilation model (Charles 2003)in explaining Latino and African-American residential segregation. We divide themodel's predictors into two categories: human capital/acculturation and groupincorporation. The model assumes Latino and Black segregation will decline as

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their socioeconomic characteristics improve. In other words, as Latinos acquiremore education, earn higher incomes, increase their rates of homeownership,and move to the suburbs, they will become less residentially isolated from Anglos.Assimilation is also related to the increasing presence of second- and third-generation Latinos, so that as the proportion of foreign-born immigrants declines,residential isolation also decreases.

Group incorporation variables are based on measuring the relative disadvantagefaced by Latinos (and African Americans) vis-a-vis Anglos in different metropolitanareas. Rather than looking at straight measures of socioeconomic well-being,we argue that because of distant and recent historical developments in specificlabor and housing markets. Latinos have fallen behind Anglos in disproportionatelyhigh levels. For example, different levels of documented workers and differentmixes of industries might make opportunities for advancement more available inthe Southeast than the Northeast (Courtney-Smith 2008). It is the proportionalintensity of structural inequalities embedded in specific metropolitan areas thatexplains Latino/Anglo segregation. For example, it is the ratio of Latino medianhousehold incomes relative to those of Anglo households that is a better measureof structural inequality than using the variation of Latino median incomes acrossmetropolitan areas to measure their relative economic standing. Similarly, differentialwage levels vis-a-vis Whites also reflect the level of group incorporation acrossmetropolitan areas.

We also test the adequacy of the place stratification model by calculating theeffects of discrimination in the home mortgage market on the residential segregationof Blacks and Latinos.

Historical Background of Latino Settlements

Like the Southern-Eastern-Central (SEC) European immigrants (1880-1910),and African-American migrants (1910-1970), many Latinos are coming todifferent metropolitan areas in the United States to find work. The employmentopportunities for all these immigrant and migrant groups have traditionallybeen confined to unskilled and semiskilled jobs (Warner 1972; Lieberson 1980).European immigrants used manufacturing employment to get a foothold in theeconomy and move up the economic ladder, thus offering themselves and futuregenerations economic and spatial mobility. Structural barriers and racism in thehousing and employment markets prevented African Americans from obtainingthe same opportunities as SEC Europeans, thus limiting economic and spatialmobility (Lieberson 1980).

Although Latinos have a history of unequal treatment and racism, the natureof structural inequality facing Latinos is fundamentally different from whatearlier European immigrants experienced. Latinos have a long history of beingoccupationally niched into low-wage, flexible-type labor (Sánchez-Korrol 1983;Suro 1998). The U.S. federal government sponsored a contract labor program,known as the Bracero Program, that brought flexible, low-wage workers,primarily from Mexico, into the United States between 1942 and 1964. The numberof Latinos allowed into the United States was strictly regulated by the demand forlow-wage agricultural, manufacturing, and railroad labor. When demand was high,more Latinos were allowed in to the country; when demand shrunk. Latinos weredeported. All together, 4.5 million Latinos participated in the Bracero Programand were employed mainly in the Southwest and California, but also as far away as

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Michigan and Ohio. The Bracero Program gave many Latinos an opportunity togain a degree of familiarity with the United States (Suro 1998).

In addition to a history of exploitation in the secondary labor market.Latinos have been negatively affected by economic restructuring. The globalizationand deindustrialization of the United States economy has eliminated millionsof low-skilled, high-wage jobs replacing them with low-skill, low-wage service-sector jobs (Carruthers and Babb 2000). These new low-skill, low-wage servicejobs represent a new, segmented labor market for immigrants that often actsas an occupational mobility trap (Ortiz 1996). Segmented low-skill, low-wagelabor has helped keep per capita average income for Latinos below per capitaaverage income for Blacks in New York and Los Angeles. This has accountedfor the fact that increases in median household income between 1990 and2000 are lower for Latinos than Blacks and Whites for all metropolitan areas(Lewis Mumford Center 2002). This is because wages are rising faster at the highends of the labor market as the demand for these workers is exceeding supply,while the reverse is happening at the low ends of the labor market. Latinos arehurt by collapsing demand for less educated workers, especially in manufacturing.During the 1990s the restructuring of food processing industries fueled Latinogrowth in nonmetropolitan areas in the South and the Midwest, while increasingnumbers of Latinos moved to Orlando to work in the tourist and service industry(Vásquez, Seales, and Friedmann-Marquardt 2008).

THE GLOBALIZATION ANDDEINDUSTRIALIZATION OFTHE UNITED STATES ECONOMYHAS ELIMINATED MILLIONS OFLOW-SKILLED, HIGH-WAGEJOBS REPLACING THEM WITHLOW-SKILL, LOW-WAGE SERVICE-SECTOR JOBS.

The timing of America's deindustrialization had an exceptionally negativeeffect on Latinos. The 1970s were the beginning of market globalization in themanufacturing industry and the start of segmentation of immigrant labor forindustries that stayed in the United States (Lamphere, Stepick, and Grenier 1994).The 1970s were also the first full decade after the passage of the Immigrationand Nationality Act, which eliminated the European bias in immigration laws.The Immigration and Nationality Act of 1964 started the beginning of the currentLatino migration wave, and changed the demographic make-up of America and itswork force. While many Latino immigrants, especially Mexicans, used to settlein rural areas, in more recent decades Latino immigrants and migrants are movingoverwhelmingly to urban areas. Between the years 1995 and 2000 about 3 millionLatinos came to the United States from abroad (Saenz 2004). This immigration

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wave is particularly important to the discussion of residential segregation giventhe history of residential segregation of the previous two large immigrant andmigrant waves (SEC Europeans and African Americans). In addition to dealingwith low levels of availability and higher housing cost burdens in places likeNew York City and Los Angeles, Latinos also face higher levels of overcrowdingthan whites (Diaz McConnell, 2008). High levels of immigration are associatedwith the declining quality of Latino neighborhoods between 1990 and 2000and higher levels of ethnic isolation, when compared to non-Hispanic whites(Lewis Mumford Center, 2002).

Every metropolitan area in the United States experienced an increase in Latinosbetween 1990—2000 (Lewis Mumford Center 2002). Currently, 90.9 percent ofall Latinos live in metropolitan areas within the United States. Of the 32.1 millionLatinos who live in metropolitan areas, 9.1 million (28.3 percent) live in metropolitanareas where they experience high levels of segregation (Lewis Mumford Center2002). This represents an increase of more than 250 percent since 1980.

The Spatial Assimilation Model

The vast majority of the academic literature concerning residential segregationhas dealt with two models: (i) the spatial assimilation model, and (2) the placestratification model (Charles 2003). The spatial assimilation model was developed inresponse to the phenomenon of immigrants spatially concentrating into residentialenclaves during an initial period that usually includes the first two generations,followed by a process of spatial mobility due to acculturation and entrance intothe economic mainstream (Park 1926). Traditionally, newly arriving migrants andimmigrants have settled in declining neighborhoods near their workplace. Migrantsand immigrants choose declining neighborhoods because of economic factors,mainly the lower cost of housing and transportation (Warner 1972). The spatial andsocial isolation of these neighborhoods provides economic opportunity and shelterfrom the dominant culture, but also provide an opportunity for exploitation by fellowethnics (Portes and Stepick 1993). The level of segregation within the inner-cityenclaves intensifies in proportion to the size of the immigrant group (Lieberson 1980).

Gradually, migrants and immigrants become acculturated to the dominant societyand start the process of entering mainstream culture and economy. Second- andthird-generation immigrants become more comfortable with the dominant culture,speak the language, and become integrated into the economy and the community.Although some SEC European immigrants did experience unequal treatment inhousing opportunities outside of the enclave and in society, initial SEC Europeansegregation was mostly a function of cultural dissimilarity, population size, andsocioeconomic status, not of structural inequality or intentional discrimination(Lieberson 1980). The process of acculturation and subsequent increasedsocioeconomic status reduced social and spatial isolation of the ethnic enclaveand increases residential mobility (Lieberson 1980; Massey and Dentón 1993).

The spatial assimilation model was developed based on the experiences ofEuropean immigrants. Current immigration trends are different, however.More recently, immigrants are bypassing cities altogether to settle in both inner-ring and outer-ring ring suburbs (Vásquez, Seales, and Friedmann-Marquardt 2008).This trend might place a dampening effect on the predictive power of the spatialassimilation model. For example, Anglos might feel threatened by the rapidinflux of minority groups and react with greater discrimination against the latter.

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thus negating the effects of household prosperity on residential improvement.However, a study of neighborhood integration in five large metropolitan areas concludedthat the effects of spatial assimilation variables (including suburban residence) onLatinos were consistent between 1980 and 1990 (Alba, Logan, and Stults 2000).

It can be argued that the spatial assimilation model is limited to measuring theimpact of human capital variables on socioeconomic outcomes like neighborhoodlocation. The model in fact ignores how racialized an ethnic group might be ina specific location. In other words, the returns to education or income for anethnic group might be lower if for some historical reason it has been treateddisproportionately worse by the dominant group or has experienced a very negativeevent or process in a specific area. For example, Puerto Ricans in New York Cityexperienced high levels of arson and urban renewal in the 1960s and 1970s; theseevents displaced them from their thriving barrios with consequent negative effects(Suro 1998). That is why we have chosen to augment the spatial assimilation modelby including group-incorporation variables. The group incorporation variablespredict a decline in segregation scores as African Americans and Latinos approachparity or close the gap with Anglos in suburbanization levels, household income,and housing equity. They capture how successful a particular racial/ethnic group hasbeen in competing against Anglos in a metropolitan area.

It is important to remember that this study is focused on testing models at themetropolitan level, while previous studies have usually looked at intra-metropolitansamples. For example. Alba, Logan, and Stults (2000) selected neighborhoods inChicago, Los Angeles, Miami, New York, and San Francisco to test their locational-attainment models. The advantage of using metropolitan areas as the unit of analysisis that it allows us to test different models while capturing a bigger proportion of thepopulations under study.

Place Stratification Model

The place stratification model focuses on the structural obstacles that havereinforced abnormally high levels of racial segregation for African Americans.It argues that historical institutional racism in housing markets favored dominantculture and segregated Blacks in order to maintain Anglo neighborhoodhomogeneity. Added to historical racism, current structural obstacles keep Blackincomes and housing values lower than Anglos and prevent Blacks from gettingequal housing equity and moving to more lucrative housing values in suburban areas.In other words, racism created Black residential segregation, and current systems ofinequality maintain residential segregation.

Historically, institutional practices severely limited where Blacks couldlive. Racism in the form of exclusionary zoning, racially restrictive covenants,blockbusting, and unfair lending practices legally denied Blacks the opportunity tolive in desirable neighborhoods or outside traditionally Black areas (Squires 1994).In addition, government housing programs often aided segregation by redliningBlack homeowners and central city areas, and local governments oftenused redevelopment as a way to buffer White neighborhoods from Blackneighborhoods (Hays 1985). Fair Housing Laws, enacted since 1968, have madeinstitutional racism in housing markets illegal, but the legacy of institutionalracism is that Black neighborhoods are in parts of the city with the least potentialfor housing equity, a situation that has severely limited Black families fromgaining wealth through homeownership.

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Like housing markets, employment has a history of institutional racism.After World War I, Blacks from the Deep South began moving to Northern citiesfor jobs in manufacturing and the service sectors. The jobs filled by Blacks inNorthern industrial cities were those at the bottom of the labor queue and offeredlittle or no opportunity for advancement. Racism in the form of prejudicial hiringpractices, occupational segregation, lack of unionization, and unequal salariescreated structural barriers to entry into the labor market and limited the earningpower of Blacks compared to Anglos. Income inequality limited housing optionsfor Blacks and assisted in segregating Blacks within lower income communities.After the passage of the Civil Rights Act of 1964, many institutional racistemployment practices were made illegal, but Blacks still face institutional barriers toequal wages. Deindustrialization has eliminated many of the high-wage, low-skill jobsheld by Blacks, and economic restructuring replaced those high-wage manufacturingjobs with low-wage service sector jobs. Income inequality has created a structuralobstacle for Blacks trying to purchase homes outside of the Black community andhas reinforced current levels of segregation.

THERE IS AMPLE EVIDENCE THATLATINOS, LIKE BLACKS, WEREVICTIMS OF INSTITUTIONALPRACTICES THAT LIMITED WHERETHEY COULD LIVE.

Blacks have faced structural problems in their opportunities to purchase homes inthe suburbs and outside of Black communities. Traditionally, SEC Europeans wereable to gain equity in the housing market and to purchase more expensive housingin suburban areas, where schools are better, housing values increase more quickly,and are in general seen as more desirable than areas in the traditional inner-cityenclave. Unequal housing values have limited the ability for Blacks to purchasemore expensive housing in suburban areas and have limited Black spatial mobility.

Limited spatial mobility had a two-prong effect. First, unequal housing valuesreinforced Black segregation because Blacks faced structural problems in movingbeyond their first home or "starter" home. Second, it limited the options of thefew Blacks who were able to suburbanize. Suburban areas are not all the same.Traditionally, inner-ring suburbs are less desirable and are less expensive thanouter-ring suburbs. Unequal housing values have forced Blacks to move to iimer-ring suburbs. This has reinforced residential segregation because those Blacks whocould suburbanize were limited to the same suburbs, and those suburbs were oftencontiguous to the traditional Black neighborhoods.

For the purposes of this paper, blatant racism in housing markets will be testedby analyzing the effects of mortgage loan denial rates on the residential segregationrates experienced by Blacks and Latinos. We assume blatant racism still existsfor Blacks and Latinos in housing and labor markets; and that conditions existingbefore the Fair Housing Act and Civil Rights Act still affect minority residentialsegregation (Diaz 2005; Friedman and Squires 2005).

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There is ample evidence that Latinos, like Blacks, were victims of institutionalpractices that limited where they could live. Issues of historical importance toLatinos include legal segregation of Mexicans in Texas (Montejano 1987), de factosegregation of migrant farm workers in railroad colonies (Valdes 2000), and blatanthousing discrimination in urban barrios (Sánchez Korrol 1983).

Recent studies continue to show high levels of inequality in the United States forLatinos and recent immigrants. Puerto Ricans in New York still experience manystructural barriers in that housing market (Rosenbaum 1992), and Mexicans in Chicagoare often victims of racist and illegal real estate practices (Betancur 1996). Californiahas denied government resources to legal immigrants during the immigration boomin the 1990s (Suro 1998). A study sponsored by the U.S. Department of Housing in2000 concluded that about a quarter of all real estate encounters for Latinos seeking arental unit will involve discriminatory behavior, and that discrimination against Latinorenters had remained essentially unchanged since 1989 (Austin-Turner, Ross, Galster,and Yinger 2002). And residential segregation leads to school segregation, so that inthe academic year 2002-03 more than three-quarters (77 percent) of Latino studentswere attending majority minority schools (Orfield and Lee 2005). Thus, evidence ofstructural inequalities supports the notion that Latino residential segregation is basedon more than just acculturation, demographics, and low economic status.

The foundations of Latino residential segregation theory are closely linked toa series of papers published by Douglas Massey and colleagues, leading up to thepublication of the groundbreaking work of racial residential segregation AmericanApartheid: Segregation and the Making of the Urban Underclass by Douglas Masseyand Nancy Dentón (1993). They were the first to do a comparative study ofMexican, Cuban, and Puerto Rican segregation. Their findings suggested PuertoRicans were more segregated from Whites, and less segregated from Blacksthan the other Latino groups (Massey and Dentón 1989). In this and in anothercomparative study (Massey and Bitterman 1985), Massey and his co-authorsattempted to explain the Puerto Rican disadvantage vis-a-vis other Latino groupsto being poorer and "blacker." But the argument for Puerto Ricans being darkerthan other Latinos has been questioned by other researchers (see Baker 2002).In looking at the more recent 1980-90 period, Jargowski (1997) concluded thatneighborhood poverty among Latinos was explained more by income and incomeinequality than by residential segregation. But his study only included a relativelysmall number of metropolitan areas.

We test the place stratification model by looking at the effects of the denialrate for conventional mortgage loans for Blacks and Latinos for the year 2004.Conventional loans offer the best interest rates and have lower costs (i.e, front-end fees) than loans obtained in the so-called "subprime" market (Apgar andCalder 2005). Recent research has unveiled the development of a dual marketstructure where minorities, even those having higher incomes, have lower access toconventional prime loans than White borrowers (Joint Center for Housing Studies2004). The geographical discriminatory practice of mortgage "redlining" has beenlinked to producing and maintaining the high levels of segregation that exist in mostU.S. metropolitan areas (Friedman and Squires 2005; Bond and Williams 2007).And studies of the lending patterns of both prime and subprime lenders consistentlyestablish the presence of high denial rates for minorities even after accounting forfinancial reasons like credit worthiness and employment history (Ross and Yinger1999; Ezeala-Harrison and Glover 2008). Finally, it has already been established in

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the literature that increasing levels of lending to black homeowners contributes toneighborhood racial integration (Bond and Williams 2007).

We considered but rejected the idea of using subprime loan levels (often called"predatory lending") for metropolitan areas because there is not a generallyaccepted definition of what constitutes a subprime loan at this time and alsobecause a significant proportion of these loans are not reported to federalagencies (Squires 2004). A recent study of home loan denial rates found thatBlacks were denied home loans more frequently than Whites by both prime andsubprime lenders (Ezeala-Harrison and Glover 2008). In comparing the effectsof conventional loans and subprime lending on residential segregation. Bond andWilliams (2007) concluded that only increases in traditional lending to blackhomebuyers decreases black-white segregation.

Sources of Data and Methodology

Our study is based on geographical data from the 332 U.S. Census definedmetropolitan areas or MSAs (U.S. Census 1990, 2000, 2002). Data were collectedfor four racial/ethnic categories: Blacks, Latinos and two Latino sub-groups(Mexican and Puerto Rican). We also collected data on Anglos (Whites) to createthe Anglo-differential ratios (see below). Since MSAs with small racial/ethnicpopulations skew the data, population minimums were set at 5,000 for Latinosand Blacks, and 2,000 for Latino subgroups.

The decennial census offers the most in-depth survey of population,socioeconomic, and housing data available. The U.S. Census Departmentrecognizes 16 different measures of segregation clustered into five key dimensions:evenness, exposure, concentration, centralization, and clustering. The vastmajority of segregation studies have relied on one of these statistics, the Index ofDissimilarity (evenness).

The Index of Dissimilarity or (D) score, is a measure of how evenly two groupsare spatially distributed. Conceptually, the (D) score measures what percentageof a population would have to relocate, within a geographic unit, to achieve aneven distribution.

The dependent variable for this paper is the (D) score for the year 2000.The source of data for the dependent variable is the Lewis Mumford Center forUrban and Regional Research, which is based on the full-count PL-794 and SFi files.The independent variables were obtained from the 2000 U.S. Census SF-4 files.The following formula was used to generate segregation scores. Scores weregenerated from U.S. Census data at the tract level:

B W

The example given here is for White/Black indices, but the same formulas may beused for all group combinations. The (D) scores were downloaded from the website:http://mumford1.dyndns.org/cen2ooo/data.html. For the purposes of this researchwork, all (D) scores will compare minority groups against Anglos.

The authors will operationalize the spatial assimilation model by measuring thenumber and percentage of Latinos and Latino subgroups who are foreign bornin each metropolitan area. We also include measures for median family income,college graduation rates, unemployment levels, and owner occupancy rates.

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According to the ethnic assimilation model, residential segregation fromAnglos will decline as the income and educational levels of our targeted groups(Latinos, Blacks, Mexican Americans, and Puerto Ricans) increase. Similarly,increasing rates of homeownership will lead to decreases in housing segregationfrom Anglos. Also, rising unemployment rates and rising proportions of theforeign born in metropolitan areas will cause the dissimilarity scores to increase.

The group incorporation variables predict a decline in segregation scoresas the targeted groups approach parity or close the gap with Anglos insuburbanization levels, household income, and housing equity (as expressed inmedian housing values).

The authors will regress (D) scores for Blacks, Latinos, and Latino subgroups toa subset of independent variables. These variables will be measured separately foreach racial/ethnic group. In addition, a measure called the Anglo Differential (AD)will be determined for all four racial/ethnic groups. The AD is a ratio of a specificindependent variable for Latinos compared to Anglos. For example, a metropolitanarea with a median household income for Latinos of $30,000, and for Anglos at$40,000, would have a household income AD of .750 or S3o,ooo/$4O,ooo.The AD will measure disparities between Latinos and Anglos and will highlightpossible structural issues in racial/ethnic residential segregation. Data for Latinosand Blacks will incorporate (D) scores from 1990-2000 and for Latino subgroupsfor 1990 and 2000 to present changes over time. Only the data on (D) scores for2000 will be used in the multivariate analyses.

We operationalize the place stratification model by including the denial rate forconventional mortgage loans for Blacks and Latinos for the year 2004. The data onloans were provided by the Federal Financial Institutions Examination Council aspart of the Home Mortgage Disclosure Act. Unfortunately, HMDA data does notbreak down Latino applicants into national origin groups, so we can only test the fullmodel on Blacks and Latinos.

Our analyses also call for controlling for the effects of demographic trendsamongst Latinos and African Americans; these effects include population size,percent of the population, and population growth. Previous studies suggest thata groups' size and sudden and large increases in immigration can disrupt housingmarkets and cause temporary rises in housing segregation (Lieberson 1980).

The variables for the overall regression model were: i. Number of Persons in 2000;2. Percent of Persons in 2000; 3. Percentage Growth 1990-2000; 4. Percent ForeignBom in 2000; 5. Suburbanization AD in 2000; 6. Median Household Income; 7.Household Income AD in 2000; 8. College Graduation Rate; 9. House Value AD in2000; 10. Owner Occupancy Rate; 11. Unemployment Rate; 12. HMDA Loan DenialRate; and 13. HMDA Loan Denial Rate AD.

RESULTS

(D) Score Analysis

Our analysis shows that Latinos were segregated from Anglos at a moderate rate(Weighted Mean (D) Score=5i.7).' Of the 234 metropolitan areas used in this survey,19 were highly segregated, with a (D) score of above 60.0. In those highly segregatedmetropolitan areas 9,282,757 Latinos reside (28 percent of all Latinos in SMSAs).

Latino segregation has increased between 1990 and 2000. The weighted mean (D)increased by 0.8 points between 1990 and 2000. In addition, the number of highlysegregated metropolitan areas (those with a (D) score of .60 or higher) increased

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TABLE 1: WEIGHTED MEAN (D) SCORES BY RACIAL/ETHNICGROUP IN METROPOLITAN AREAS

(D) Score

Latino/Anglo (N=234)

Black/Anglo (N=254)

Mexican/Anglo (N=235)

Puerto Rican/Anglo (N=129)

Gap between Black/Anglo

and Latino/Anglo (D) scores

1990

50.9

69.0

51.6

62.2

18.1

2000

51.7

65.0

53.2

57.3

13.3

Latinos andBtacks: Metropolitan Areas withMore Than $,ooo.Mexicans and Puerto Ricans: Metropolitan Areaswith More Than 2,000.

by 4 from 15 to 19. Lastly, the number of Latinos living in a highly segregatedmetropolitan area increased from 6,804,251 in 1990 to 9,282,757 in 2000.

Latino increases in segregation compare with Black decreases in segregation.The weighted mean (D) score for Blacks was 69.0 in 1990 and decreased by 4.0points to 65.0 in 2000. Although Blacks remain more segregated than Latinos,the difference in their weighted mean (D) scores decreased from 18.i points to 13.i.

When analyzing Latino subgroups, Puerto Ricans are more segregated thanMexicans, but Puerto Rican segregation is decreasing and Mexican segregation isincreasing. The Puerto Rican segregation rate in 2000 is 57.3. This is a 4.9 pointdecrease from the (D) score of 62.2 in 1990. The Mexican segregation rate in 2000is 53.2. This is a 1.6 point increase from the (D) score of 51.6 in 1990.

Testing the Spatial Assimilation Model-Mexicans and Puerto Ricans

The results for the Mexican-origin population reveal that the following predictorsexplain segregation from Anglos: Suburbanization AD in 2000; Percent ForeignBorn in 2000; Median Household Income; Household Income AD in 2000;and House Value AD in 2000. Metropolitan areas with a larger proportion offoreign-born Mexicans experience higher levels of residential segregation.In areas where the Mexican-origin population has incomes and home valuesthat are similar to those of Anglos, segregation is lower. Similarly, in areas whereMexicans and Anglos enjoy similar levels of suburbanization, the segregationscores trend lower. One unexpected finding is that higher Mexican incomes leadto increasing levels of segregation. This finding contradicts the spatial assimilationmodel. Thus, three group incorporation predictors support the spatial assimilationmodel, while one human capital/acculturation variable supported the model andanother contradicted it. These findings suggest that for Mexicans achievingsocioeconomic parity with Anglos is a crucial requirement for attaining residentialintegration with the dominant group.

For Puerto Ricans the significant predictors of segregation are Number of Personsin 2000, Suburbanization AD in 2000, Household Income AD in 2000, and HouseValue AD in 2000. The results of the multivariate analysis suggest metropolitanareas where Puerto Ricans and Anglos have similar levels of suburbanizationexperienced significantly lower levels of segregation. As the number of PuertoRicans goes up, their segregation from Anglos also increases. The results for incomeshow that as the gap in the household income distribution between Puerto Ricans

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TABLE 2: MEANS AND STANDARD DEVIATIONS OF INDEPENDENT VARIABLES

Independent Variables

Number of Persons in 2000in thousands

Percent of Persons in 2000

Suburbanization AD in 2000

Percent - Foreign Born in 2000Í

Percentage Growth 1990-2000

Median Household Incomein thousands

Household Income AD in 2000

College Graduation Rate

Unemployment Rate

Owner Occupancy Rate

House Value AD in 2000

HMDA Loan Denial Rate

HMOA Loan Denial Rate AD

BlackN=255

118.417

243.937

13.6

10.6

.522

.266

4.6

6.6

29.7

24.0

33.238

7.014

.722

.092

17.230

6.020

10.266

3.528

53.043

7.804

.691

.127

24.0

5.2

1.783

.407

LatinoN=234

135.936

373.652

13.2

IS. 8

.724

.278

13.3

9.8

123.3

132.4

38.116

6.749

.811

.099

19.634

6.889

7.900

2735

56.751

9.Î73

.787

.133

20.8

4.0

1.590

.348

MexicanN=23S

85.941

269.334

9.5

14.7

783

.277

35.8

16.1

191.9

230.0

33.997

5.829

.735

.088

10.035

5750

8.927

3.69)

41.838

)Z9/6

.771

.J43

N.A.

N.A.

Puerto RicanN=129

26.245

8Î.Î59

2.2

2.5

.692

.296

37.2

9.5

75.0

51.3

34.257

9.546

.684

.Î67

16.481

9.679

9.298

3.759

41.871

13.080

.823

.155

N.A.

N.A.

Note: Numbers on top are means, and numbers in italics are standards deviations.' For Puerto Ricans, the FB percent relates to Puerto Ricans bom on the island of Puerto Rico.Metropolitan Areas used in this model must have over $,ooo for Blacks and Latinos.Metropolitan Areas used in this model must have over 2,000 for Mexicans and Puerto Ricans.

and Anglos closes, their residential segregation goes down. Similarly, as the gap inowner-occupied housing values between Anglos and Puerto Ricans narrows, theirresidential segregation declines. Only group incorporation variables supported thespatial assimilation model (Suburbanization AD in 2000, Household Income AD in2000, and House Value AD in 2000).

Full Regression Model-Blacks and Latinos

The addition of two variables using HMDA data on conventional mortgage loans(HMDA Loan Denial Rate and HMDA Loan Denial Rate AD) allowed us tocompare the relative explanatory power of the spatial assimilation model andthe place stratification model in explaining the housing segregation of AfricanAmericans and Latinos (see Table 3).

In looking at the spatial assimilation model, the results for Blacks show thatseven variables have significant effects on housing segregation: Number ofPersons in 2000, Percent of Persons in 2000, Percent Foreign Born in 2000,

TABLE 3: COEFFICIENTS OF RESIDENTIAL SEGREGATION FROM WHITES AT METROPOLITAN LEVEL

Independent Variables

Number of Persons in 2000

Percent of Persons in 2000

Suburbanization AD in 2000

Percent - Foreign Born in 2000Í

Percentage Growth 1990-2000

Median Houseiiold Income

Household Income AD in 2000

College Graduation Rate

Unemployment Rate

Owner Occupancy Rate

House Value AD in 2000

HMDA Loan Denial Rate

HMDA Loan Denial Rate AD

Constant

Multiple Square R

Adjusted Multiple Square R

BlackN=236

2.930***

(.473)

-.179***

(.051)

-4.128*

(1.952)

.221**

(.791)

-0.728

(2.098)

0.065

(3.441)

60.420***

(9.143)

-0.099

(.093)

0.621***

(.171)

0.117

(.074)

-12.490*

(5.240)

.145

(9.456)

-0.906

(1.202)

87.119

0.867

0.752

LatinoN=216

1.437**

(.488)

-.144***

(.0424)

-3.205

(2.048)

.290***

(.752)

1.529***

(.320)

0.156

(3.574)

-65.733***

(7.518)

-0.346***

(.075)

-0.052

(.231)

0.017

(.071)

-12.332**

(4.078)

-.434

(11.014)

3.282*

(1.494)

98.94

0.891

0.794

MexicanN=235

0.384

(.518)

-.021

(.054)

-4.467*

(1.916)

.415***

(.522)

-0.340

(.311)

11.318**

(3.931)

34.272***

(7.064)

-0.163

(.109)

0.131

(.144)

0.037

(.068)

-21.002***

(4.590)

N.A.

N.A.

33.106

0.644

0.627

Puerto RicanN=129

2.563**

(.768)

-.166

(3.76)

-13.749***

(3.075)

.054

(.808)

-0.899

0.415)

-3.833

(4.659)

-13.782

(7.486)

-0.121

(.098)

0.138

(.265)

@

-18.793***

(5.705)

N.A.

N.A.

87.067

0.756

0.736

Note: Numbers in parenthesis are standard errors.' For Puerto Ricans, the FB percent relates to Puerto Ricans bom on the island of Puerto Rico.@ Variable is multi-collinear so it has been excluded from the regression model.'p<.of, "p<.oi, "'pK.ooi (two-tailed test).Metropolitan Areas used in this model must have over $,ooo for Blacks and Latinos à'2,000for Mexicans é" Puerto Ricans.

Suburbanization AD in 2000, Household Income AD in 2000, House Value ADin 2000, and Unemployment Rate. Metropolitan areas with the largest populationof African Americans experienced higher levels of segregation. In contrast,a proportionally larger Black population is linked to lower levels of isolationfrom Anglos, a counterintuitive finding that might be linked to political strength(see discussion on Latinos below). Metropolitan areas with proportionally moreforeign-born Blacks experienced higher levels of segregation. The results alsosuggest that areas where Black incomes are closer to Anglo incomes have lowersegregation scores. Similarly, where the values of homes owned by Blacks aresimilar to those owned by Anglos levels of segregation tend to be lower.Also, higher rates of unemployment among Blacks are linked to increasing

segregation levels. Finally, the results of the multivariate analysis suggest thatmetropolitan areas where Blacks and Anglos have similar levels of suburbanizationexperienced significantly lower levels of segregation.

While three of the group incorporation factors are significantly relatedto segregation in the expected direction (Household Income AD in 2000,Suburbanization AD in 2000, and House Value AD in 2000), two predictors linkedto human capital/acculturation impacted segregation in the hypothesized direction(percent foreign born and unemployment rate).

The importance of the place stratification model amongst Blacks is rejected asour findings fail to confirm that higher denial rates for conventional loans result inincreasing segregation levels from Anglos.

In testing the spatial assimilation model the following variables had significant effectson Latino residential segregation: Number of Persons in 2000, Percent of Personsin 2000, Percent Foreign Bom in 2000, Household Income AD in 2000, HouseValue AD in 2000, Percentage Growth 1990-2000, and College Graduation Rate.These results suggest that areas where Latino incomes are closer to Anglo incomeshave lower segregation scores. In addition, segregation increases in areas experiencinghigher Latino population growth and in areas with higher proportions of foreign-bomLatinos. Higher proportions of college-educated Latinos are associated with lowerlevels of Latino/Anglo segregation. In metropolitan areas where Latinos own homescloser in value to those of Anglos there are lower levels of residential segregation.

The only counterintuitive finding is that higher proportions of Latinos areassociated with declining segregation scores. Perhaps once you control for the sizeof the foreign bom and population increases, a larger Latino composition refiectspolitical strength or some similar factor that translates into lower isolation fromAnglos. A similar argument can be used to explain why larger proportions of AfricanAmericans led to declines in neighborhood segregation. Our overall regressionmodel indicates that two human capital/acculturation variables (percent foreign bomand college graduation rate) were statistically significant, compared to two groupincorporation variables (income and house value differentials). In addition, one ofthe group incorporation variables. Income Differential, had the largest effects onLatino residential segregation.

The place stratification model is also important in explaining housing segregationamongst Latinos. In areas where the loan denial rates for Latinos are similar or lowerthan those experienced by Anglos, their segregation scores are lower. Put differently,as Latino denial rates exceed Anglo denial rates, their housing segregation increases.^

TABLE 4: COMPARING EXPLANATORY STRENGTH OF THREE TYPES OF PREDICTORS ACROSSETHNIC/RACIAL GROUPS

Ethnic Group

Mexicans

Puerto Ricans

African Americans

Latinos

# VariablesSupport HumanCapital/GroupComposition

1

0

2

2

# VariablesSupport LocalIncorporation

3

3

3

2

# VariablesSupport PlaceStratificationModel

N.A.

N.A.

0

1

[132]

Summary and Conclusions

Puerto Ricans are the most segregated Latino ethnic group with Anglos,while Mexicans were the least segregated. Between 1990-2000 segregationscores for Puerto Ricans declined, while those of Mexicans increased. This findingsuggests that aggregating Latino subgroups obscures important distinctions in theresidential experie.nces of these ethnic groups. Indeed, segregation of Mexicansand Puerto Ricans is greater than Latinos, which means that other Latinosubgroups are less segregated from Anglos. Blacks have the highest segregation,but the gap between Blacks and Latinos (in relation to their segregation fromAnglos) is declining over time.

The results of the multivariate analysis suggest metropolitan areas with thelargest number of Puerto Ricans and Blacks experienced significantly high levelsof segregation, as the population size of these groups (and percentage growth forLatinos) was positively related to increases in residential segregation from Anglos.This finding indicates that high-growth Latino metropolitan areas and Latino "hub"areas like Los Angeles and Chicago experience high levels of residential segregation.

THIS FINDING SUGGESTSTHAT AGGREGATING LATINOSUBGROUPS OBSCURESIMPORTANT DISTINCTIONS INTHE RESIDENTIAL EXPERIENCESOF THESE ETHNIC GROUPS,

As expected, an increasing equality in suburbanization rates between Mexicansand Anglos, and between Puerto Ricans and Anglos, was associated with declininglevels of residential segregation. This finding supports the spatial assimilation modeland its emphasis on the workings of institutional barriers to group incorporationoperating in specific metropolitan markets.

A look at socioeconomic indicators shows that as the Latino-Anglo incomedifferential is reduced, residential segregation declines. This was true for thedisaggregated Latino groups and African-Americans also. Similarly, as the proportionof Latinos (which included Cubans, Central, and South Americans) with a collegedegree increases, their residential segregation goes down. This finding was notsignificant for Puerto Ricans or for Mexicans, highlighting the importance ofspecifying Latino subgroups when testing sociological models.

The spatial assimilation model is also confirmed by the findings on percent foreignbom among Latinos, Blacks, and Mexicans, which suggests that the presence of largenumbers of immigrants increases residential isolation. This model is contradictedby the significant but negative results of income within the Mexican population,challenging the assumption that increasing economic resources leads to higher levelsof residential integration.

In testing the place stratification model we found that in metropolitan areaswhere the Latino denial rates exceed the Anglo denial rates, residential segregation

[133I

increases. However, conventional loan denial rates for African Americans were notcausally related to residential segregation.

In comparing the impact of our two types of independent variables (within thespatial assimilation model) for explaining housing segregation, our results show thatgroup incorporation best explains Puerto Rican segregation from Anglos at themetropolitan level. The results for Mexicans refiect a strong validation of the groupincorporation approach, and mixed support for the human capital/acculturationvariables. In overall terms, our findings suggest that the spatial assimilation modelexplains housing segregation reasonably well.

For Latinos we found support for both the spatial assimilation and the placestratification models. The findings on loan denial rates suggest that for Latinoborrowers, lack of access to mortgages plays a role in preventing neighborhoodintegration with Anglos. It is very likely that many rejected applicants ended up in thesubprime loan market, causing them to pay higher fees and interest rates and suffer theincreased likelihood of losing their homes to foreclosure (Apgar and Calder 2005).

GIVEN THE RECENTRE-STRUCTURING OF THEAMERICAN ECONOMY, WITH ITSEMPHASIS ON A DOWNGRADEDMANUFACTURING SECTOR,THE OPPORTUNITIES FORADVANCEMENT AVAILABLETO IMMIGRANTS TODAY ARENOT AS PLENTIFUL AS THEYWERE FOR IMMIGRANTS FROMEARLIER PERIODS.

The very strong effects of income inequality on segregation suggests that theopportunity structures for Latinos and African Americans are more equitable in somemetropolitan areas of the country and that perhaps some discriminatory processes areoperating in other metropolitan areas. Given the recent re-structuring of the Americaneconomy, with its emphasis on a downgraded manufacturing sector, the opportunities foradvancement available to immigrants today are not as plentiful as they were for immigrantsfrom earlier periods. The situation is particularly bleak for Mexican Americans,who continue to e^erience high rates of immigration, and in areas like Los Angeles haverelatively low levels of human capital (Ortiz 1996). The road to residential integration forLatinos appears to be based on increasing their number of college-educated workers, andclosing the income gap between them and the majority Anglo population. And our findingsalso suggest, that at least for Latinos, ensuring equal access to mortgage credit must remainas a crucial public policy if we are to pursue neighborhood integration as a societal goal.

NOTES

' The (D) score for univariate analyses is weighted to account for the very largedifferences in Latino populations across the country. It assigns more importance to largemetropolitan areas like Los Angeles when computing scores. The dependent variable inthe regression equation is not weighted.^ Although we only present the results for the full regression model, separate analysesnot presented here suggest the addition of the place stratification variables increases thevariance explained in a small but significant way.

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