When racial minorities started buying homes on Chicago's Southwest Side, residents of the formerly white enclave feared home values would plunge. That prospect only worsened racial tensions.

Then the white residents created the Home Equity Assurance Program, which allayed residents' fears and created a model of how integration should be carried out.

• Ten years ago, they created an insurance pool funded by a special local tax that protects against a decline in home values.

• If a homeowner can't sell his house at its assessed value, insurance will cover the difference -- but participating residents must wait at least five years before a sale below the assessed value entitles them to file a claim.

• That provision has forced white residents to live among their new neighbors for a few years and to give integration a chance, rather than fleeing in a panic.

• Although the area's white population has shrunk to only about 20 percent of the total, property values have steadily climbed and only 10 homeowners have filed claims.

Now, cities across the country are beginning to follow this lead.

The Patterson Park community in Baltimore started a home equity program several years ago, based on the Chicago model. Community leaders in Syracuse, N.Y., are developing a similar plan to ease nervousness among residents of middle-class neighborhoods there.

Source: Jonathan Eig, "How Fear of Integration Turned White Enclave into a Melting Pot," Wall Street Journal, August 7, 2000.

For text http://online.wsj.com/articles
/SB965597140497959204.htm

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