I'm curious as to what the larger neighborhood looks like in your case - is it ethnically mixed or very homogeneous?

So yes geographical restraints play a roll but JOBs and ethnic diversity also was a huge driver...

The Community Reinvestment Act has related requirements concerning the population concentration of borrowers by a lender, by race, ethnicity and to geographic area, getting involved with a certain ethnic group where you have a high concentration of business activities with a particular group will send you down the road of predatory dealing/lending, you can be in violation in this respect simply by concentrations of business even if your loan is just fine.

Real estate is one of the great 'meritocracies'.One does not succeed based on looks, height, weight, religion, gender, ethnic origin or political correctness.Success comes from much hard work, a lot of learning, more hard work, some brains, and probably a little bit of luck as well.

Many of these people might be ethnic minorities who prefer living in the city, close to things, rather than 20-30 miles away in the suburbs.

You would be totally and rightful screwed no matter what your race or ethnicity is.  

That will tell you that the performance is not dependent on a couple of people making short term gains, but a stable performance pattern that is likely to persist.Also, if schools are a high weight in your decision making, I would also suggest looking at things like crime rate, average income in the areas, ethnic concentration, and other factors that generally effect kids at school more than adults at home. 

Prices on these properties have been surging for years, deconversions in pretty much every once was "hipster"/now insanely popular area in Chicago, the hyper gentrification of every classic, ethnically vibrant, affordable neighborhood is old news.

I also wonder whether the neighbor has an issue with the race or ethnicity of your tenants.

It’s a very dynamic town with many different ethnicities, demographics etc., and many different investment opportunities.