Public reports to the police are a key component of the formal social control process and have distinct interracial dynamics. This study examines the relationship between incident severity, neighborhood context, and participant race and patterns in the determination of probable cause and arrest in reactive police contacts. We utilize a complete record of police incidents in Seattle, Washington from 2008 through 2012 including information on race of reporters and targets and type of offense. These data are matched to longitudinal tract‐level census data to evaluate how incident outcomes relate to neighborhood change. Results indicate that black targets are more frequently subject to arrest overall, particularly in changing neighborhoods and when reporters are white. For nuisance crimes such as public disturbances, probable cause is found more often for white reporters but less often in changing neighborhoods.