Neighbourhoods mostly made up of a single ethnic or racial group are considered segregated. This is predominantly the case for Black or Asian communities. Vancouver has a prominent Chinatown, which has existed in some form since the mid to late 1800s and Steveston in Richmond which was a historically Japanese neighbourhood.

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There are many reasons why different groups end up living separately from one another. Often multiple factors are working together to drive the divide. Following the Civil Rights Act in the 1960s, American cities could no longer discriminate based on race directly. However, developers and planners found new ways to economically force Black Americans out of White neighbourhoods. Pricing schemes and the prevention of African Americans from achieving a higher socio-economic status through factors such as job discrimination forced many to remain in low-income urban centers. With time, these communities continued to cement themselves, making neighbourhoods more and more racialized.

Gentrification is another common practice in North American cities. This involves developers buying up large amounts of cheap land, often inhabited by marginalized groups, and forcing them out through increases in pricing and rent to redevelop the land and sell it to wealthier White families. Gentrification also affects jobs, for example, industrial districts are gentrified, causing many jobs that low-income groups rely on to disappear.