Skip to main content
SpringerLink
Log in

Military Veterans and Neighborhood Racial Integration: VA Mortgage Lending Across Three Eras

  • Original Article
  • Published:
Population Research and Policy Review Aims and scope Submit manuscript

Abstract

The military has long been seen as an avenue for increasing racial equality for minorities, especially black Americans. In this article, we examine to what extent military veterans also experience residential integration by looking at neighborhood residential outcomes for black and white men utilizing the popular Veterans Affairs (VA) loan program to purchase a home. We draw on data from the Home Mortgage Disclosure Act (HMDA) to examine residential integration among white and black veteran homebuyers compared to homebuyers utilizing conventional loans over three major lending eras: 1990s, 2000–2007, and 2008–2015. By 2015, a quarter of all home purchase mortgages loans to black men were VA loans even though veterans made up only a tenth of the adult black male population. In our multivariate analyses, we uncover a sizeable combined swing toward neighborhood minority-white integration, 14.4% points, among black and white veterans who use VA loans. Compared to those with conventional loans, black veterans live in neighborhoods with 10% points fewer minorities and, white veterans, 4.4% points fewer whites. Our results illustrate how racial integration in the US military has the potential to foster lasting housing integration among veterans.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Fig. 1
Fig. 2

Similar content being viewed by others

Notes

  1. Not all veterans use VA loans and those who do are likely selective in certain ways. However, selectivity into VA loan utilization operates more heavily in the earlier period of this study than the later period. Post 2008, upwards of 90% of discharged veterans used the VA loan program regardless of race, according to an analysis of matched county recorder discharge and mortgage loan records by Rugh and Fischer (2015).

  2. As a result, black and Hispanic buyers have increasingly relied on the Federal Housing Administration (FHA) loan program in order to access homeownership (Carr and Anacker 2015). However, FHA loans have added costs compared to VA loans, such as higher down payments and annual insurance premiums (Goodman et al. 2014a). The disproportionate reliance of minority borrowers on FHA loans combined with the lower home equity accumulation potential has led some to raise concerns that it continues the pattern of a persistent dual housing market segmented by race (Olsen et al. 2014).

  3. For the HMDA years 1992–2002, the data are merged by tract in 1990 boundaries with their corresponding linearly interpolated census data from 1990 and 2000. Individual level loan data from HMDA for 2003 to 2010 are merged at the tract level with linearly interpolated racial composition data from the 2000 Census and 2010 Census in 2000 boundaries created by Geolytics. The American Community Survey is merged with the 2010–2015 HMDA data.

  4. We use male veterans aged 18–64 as the reference population since the vast majority of veterans are men and the vast majority of homebuyers are younger than age 65 (Rugh et al. 2015).

  5. We measure neighborhood diversity using the entropy index, which is a summary measure of segregation among whites, blacks, Hispanics, Asians, and other/multiracial residents across all census tracts in a metropolitan area. The entropy index varies from zero, indicating complete segregation, to (5) indicating perfect integration. The table shows entropy it its raw form.

  6. An f test of 105.25, p = 0.000 indicates the addition of the interaction improved model fit.

References

  • Adelman, R. M. (2004). Neighborhood opportunities, race, and class: The black middle class and residential segregation. City & Community, 3, 43–63.

    Article  Google Scholar 

  • Alba, R. D., & Logan, J. R. (1992). Analyzing locational attainments: Constructing individual-level regression models using aggregate data. Sociological Methods and Research, 20(3), 367–397.

    Article  Google Scholar 

  • Allport, G. W. (1954). The nature of prejudice. New York: Doubleday Anchor Books.

    Google Scholar 

  • Altschuler, G., & Blumin, S. (2009). The GI bill: The new deal for veterans. Oxford: Oxford University Press.

    Google Scholar 

  • Angrist, J. D. (1993). The effect of veterans benefits on education and earnings. ILR Review, 46(4), 637–652.

    Article  Google Scholar 

  • Bailey, A. K. (2011). Race, place, and veteran status: Migration among black and white men, 1940–2000. Population Research and Policy Review, 30(5), 701–728.

    Article  Google Scholar 

  • Bailey, A. K. (2013). Military employment and spatial mobility across the life course. In J. R. Wilmoth & A. S. London (Eds.), Life-course perspectives on military service (pp. 1–18). New York: Taylor and Franci.

    Google Scholar 

  • Bailey, A. K., Poulos, C. D., & Joosten, K. M. (2017). Housing veterans: Homelessness and mortgages. In L. Hicks, et al. (Eds.), The civilian lives of U.S. veterans: Issues and identities (pp. 693–718). Santa Barbara, CA: Praeger.

    Google Scholar 

  • Bryant, R. R., Samaranayake, V. A., & Wilhite, A. (1993). The effect of military service on the subsequent civilian wage of the Post-Vietnam veteran. The Quarterly Review of Economics and Finance, 33, 15–31.

    Article  Google Scholar 

  • Burk, J., & Espinoza, E. (2012). Race relations within the US military. Annual Review of Sociology, 38, 401–422.

    Article  Google Scholar 

  • Carr, J. H., & Anacker, K. B. (2015). The complex history of the federal housing administration: Building wealth, promoting segregation, and rescuing the U.S. housing market and the economy. Banking & Financial Services Policy Report., 34(8), 10–18.

    Google Scholar 

  • Chetty, R., Hendren, N., Kline, P., & Saez, E. (2014). Where is the land of opportunity? The geography of intergenerational mobility in the United States. The Quarterly Journal of Economics, 129(4), 1553–1623.

    Article  Google Scholar 

  • Chevan, A. (1989). The growth of home ownership: 1940–1960. Demography, 26(2), 249–266.

    Article  Google Scholar 

  • DeFina, R., & Hannon, L. (2009). Diversity, racial threat and metropolitan housing segregation. Social Forces, 88(1), 373–394.

    Article  Google Scholar 

  • Emerson, M. O., & Yancey, G. A. (2011). Transcending racial barriers: Towards a mutual obligations approach. Oxford: Oxford University Press.

    Google Scholar 

  • Farley, R. (1999). Racial issues: Recent trends in residential patterns and intermarriage. In N. J. Smelser & J. C. Alexander (Eds.), Diversity and its discontents: Cultural conflict and common ground in contemporary American society (pp. 86–128). Princeton: Princeton University Press.

    Google Scholar 

  • Farley, R., & Frey, W. (1994). Changes in the segregation of whites from during the 1980s: Small steps toward a more integrated society. American Sociological Review, 59(1), 23–45.

    Article  Google Scholar 

  • Fetter, D. K. (2013). How do mortgage subsidies affect home ownership? Evidence from the mid-century GI bills. American Economic Journal: Economic Policy, 5(2), 111–147.

    Google Scholar 

  • Fischer, M. J. (2003). The relative importance of income and race in determining residential outcomes in U.S. urban areas, 1970–2000. Urban Affairs Review, 38, 669–696.

    Article  Google Scholar 

  • Fischer, M. J. (2013). Black and white homebuyer, homeowner, and household segregation in the United States, 1990–2010. Social Science Research, 42(6), 1726–1736.

    Article  Google Scholar 

  • Fischer, M. J., & Lowe, T. (2015). Homebuyer neighborhood attainment in black and white: Housing outcomes during the boom and bust. Social Forces, 93(4), 1481–1512.

    Article  Google Scholar 

  • Fischer, M. J., Lundquist, J. H., & Vachon, T. (2016). Residential segregation: The mitigating effect of prior military experience. Social Science Research, 60(1), 61–73.

    Article  Google Scholar 

  • Flippen, C. A. (2004). Unequal Returns to housing investments? A study of real housing appreciation among black, white, and hispanic households. Social Forces, 82, 1527–1555.

    Article  Google Scholar 

  • Friedman, S., Tsao, H., & Chen, C. (2013). Housing tenure and residential segregation in Metropolitan America. Demography, 50(4), 1477–1498.

    Article  Google Scholar 

  • Goodman, L., Seidman, E., & Zhu, J. (2014a). VA loans outperform FHA Loans. Why? and what can we learn?. Washington, DC: Urban Institute.

    Google Scholar 

  • Goodman, L., Zhu, J., & George, T. (2014b). Where have all the loans gone? The impact of credit availability on mortgage volume. The Journal of Structured Finance, 20(2), 45–53.

    Article  Google Scholar 

  • Hershfield, D. (1985). Attacking housing discrimination: Economic power of the military in desegregating off-base rental housing. American Journal of Economics and Sociology, 44, 23–28.

    Article  Google Scholar 

  • Iceland, J., & Wilkes, R. (2006). Does socioeconomic status matter? Race, class, and residential segregation. Social Problems, 53(2), 248–273.

    Article  Google Scholar 

  • Immergluck, D. (2015). Preventing the next mortgage crisis: The meltdown, the federal response, and the future of housing in America. Lanham, MD: Rowman & Littlefield.

    Google Scholar 

  • Jacobson, C. K., & Heaton, T. B. (2003). Intergroup marriage and United States military service. Journal of Political and Military Service, 31, 1–22.

    Google Scholar 

  • Kuebler, M., & Rugh, J. S. (2013). New evidence on racial and ethnic disparities in homeownership. Social Science Research, 42(5), 1357–1374.

    Article  Google Scholar 

  • Logan, J. R., & Molotch, H. L. (1987). Urban fortunes: The political economy of place. Berkeley, CA: University of California Press.

    Google Scholar 

  • Logan, J. R., & Stults, B. J. (2011). The persistence of segregation in the metropolis: New findings from the 2010 census. Census Brief prepared for Project US2010. http://www.s4.brown.edu/us2010.

  • Logan, J. R., Stults, B. J., & Farley, R. (2004). Segregation of minorities in the metropolis: Two decades of change. Demography, 41(1), 1–22.

    Article  Google Scholar 

  • Loveless-Morris, J. A. (2014). Black–white wealth accumulation: Does veteran status matter? Ph.D. dissertation. Seattle, WA: University of Washington. http://hdl.handle.net/1773/24987.

  • Lundquist, J. H. (2004). When race makes no difference: Marriage and the military. Social Forces, 83(2), 1–28.

    Article  Google Scholar 

  • Lundquist, J. H. (2006). The black–white gap in marital dissolution among young adults: What can a counterfactual scenario tell us? Social Problems, 53(3), 421–441.

    Article  Google Scholar 

  • Lundquist, J. H., & Zhun, X. (2014). Reinstitutionalizing the family: Lifecourse policy and marriage in the military. Journal of Marriage and the Family, 76, 1063–1081.

    Article  Google Scholar 

  • Maroto, M. (2016). Growing farther apart: Racial and ethnic inequality in household wealth across the distribution. Sociological Science. https://doi.org/10.15195/v3.a34.

    Article  Google Scholar 

  • Massey, D. S. (2005). Racial discrimination in housing: A moving target. Social Problems, 52(2), 148–151.

    Article  Google Scholar 

  • Massey, D. S., & Denton, N. A. (1993). American apartheid: Segregation and the making of the underclass. Cambridge, MA: Harvard University Press.

    Google Scholar 

  • Massey, D. S., & Fischer, M. J. (1999). Does rising income bring integration? New results for Blacks, Hispanics, and Asians in 1990. Social Science Research, 28, 316–326.

    Article  Google Scholar 

  • McKibben, C. L. (2011). Racial beachhead: Diversity and democracy in a military town. Stanford, CA: Stanford University Press.

    Google Scholar 

  • Moskos, C., & Butler, J. (1996). All that we can be: Black leadership and racial integration the army way. New York: Basic Books.

    Google Scholar 

  • National Center for Veterans Analysis and Statistics. (2017). Minority veterans report: Military service history and VA benefit utilization statistics. Washington, DC: Data Governance and Analytics, Department of Veterans Affairs.

    Google Scholar 

  • Oliver, M. L., & Shapiro, M. Thomas. (2006). Black wealth/white wealth: A new perspective on racial inequality. New York: Routledge.

    Google Scholar 

  • Olsen, S., Curnutte, K., Gudell, S., Lightfeldt, A., Hopkins, C., Humpries, S., et al. (2014). A house divided: How race colors the path to homeownership. Washington, DC: Zillow, Inc. and The National Urban League.

    Google Scholar 

  • Pais, J., South, S. J., & Crowder, K. (2012). Metropolitan heterogeneity and minority neighborhood attainment: Spatial assimilation or place stratification? Social Problems, 59, 258–281.

    Article  Google Scholar 

  • Pew Research Center. 2011. Chapter 6: A profile of the modern military In the military–civilian gap war and sacrifice in the post-9/11 Era. Washington, DC. Retrieved 3 Dec 2017 from http://www.pewsocialtrends.org/2011/10/05/chapter-6-a-profile-of-the-modern-military/.

  • Plane, D. A., Henrie, C. J., & Perry, M. J. (2005). Migration up and down the urban hierarchy and across the life course. Proceedings of the National academy of Sciences of the United States of America, 102(43), 15313–15318.

    Article  Google Scholar 

  • Routon, W. (2014). The effect of 21st century military service on civilian labor and educational outcomes. Journal of Labor Research, 35(1), 15–38.

    Article  Google Scholar 

  • Rugh, J. S., Albright, L., & Massey, D. S. (2015). Race, space, and cumulative disadvantage: A case study of the subprime mortgage collapse. Social Problems, 62(2), 186–218. https://doi.org/10.1093/socpro/spv002.

    Article  Google Scholar 

  • Rugh, J. S., & Fischer, M. J. (2015). Are military veterans more racially integrated? An analysis of homeowners in 98 U.S. metro areas. Paper Presented at the American Sociological Associations Annual Meetings in Chicago (2015).

  • Rugh, J. S., & Massey, D. S. (2010). Racial segregation and the American foreclosure crisis. American Sociological Review, 75(5), 629–651.

    Article  Google Scholar 

  • Rugh, J. S., & Massey, D. S. (2014). Segregation in post-civil rights America: Stalled integration or end of the segregated century? Du Bois Review: Social Science Research on Race, 11(4), 205–232. https://doi.org/10.1017/S1742058X13000180.

    Article  Google Scholar 

  • Seeborg, M. C. (1994). Race, poverty and enlistment: Some evidence from the national longitudinal survey of youth. Journal of Economics, 20, 15–24.

    Google Scholar 

  • Segal, D. R., Bachman, J. G., & Dowdell, F. (1978). Military service for female and black youth—Perceived mobility opportunity. Youth & Society, 10, 127–134.

    Article  Google Scholar 

  • Sharkey, P. (2013). Stuck in place: Urban neighborhoods and the end of progress toward racial equality. Chicago: University of Chicago Press.

    Book  Google Scholar 

  • Sharp, G., & Hall, M. (2014). Emerging forms of racial inequality in homeownership exit, 1968–2009. Social Problems, 61(3), 427–447.

    Article  Google Scholar 

  • Sigelman, L., & Welch, S. (1993). The contact hypothesis revisited: Black–white interaction and positive racial attitudes. Social Forces, 71(3), 781–795.

    Article  Google Scholar 

  • Sutton, D. (1971). The military mission against off-base discrimination. In C. Moskos (Ed.), Public opinion and the military establishment. Beverly Hills, CA: Sage Publications.

    Google Scholar 

  • United States Commission on Civil Rights. 1963. “The Negro in the Armed Forces” in 1963 Report of the US Commission on Civil Rights. Washington, DC.

  • Vigdor, J. L. (2006). Liquidity constraints and housing prices: Theory and evidence from the VA mortgage program. Journal of Public Economics, 90(8–9), 1579–1600.

    Article  Google Scholar 

  • Wilkes, R., & Iceland, J. (2004). Hypersegregation in the twenty-first century. Demography, 41(1), 23–36.

    Article  Google Scholar 

  • Williams, R., Nesiba, R., & McConnell, E. D. (2005). The changing face of inequality in home mortgage lending. Social Problems, 52(2), 181–208.

    Article  Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Department of Sociology, University of Connecticut, Storrs, CT, USA

    Mary J. Fischer

  2. Department of Sociology, Brigham Young University, Provo, UT, USA

    Jacob S. Rugh

Authors
  1. Mary J. Fischer
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Jacob S. Rugh
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Mary J. Fischer.

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Fischer, M.J., Rugh, J.S. Military Veterans and Neighborhood Racial Integration: VA Mortgage Lending Across Three Eras. Popul Res Policy Rev 37, 569–589 (2018). https://doi.org/10.1007/s11113-018-9471-7

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s11113-018-9471-7

Keywords

Search

Navigation