Contributions of housing policy to racial segregation in the United States: A summary of Richard Rothstein's "The Color of Law"

It is no secret American neighborhoods to this day are segregated. Why is this? The common explanation might look something like this:

Returning home from the War, countless American families moved to the newly developed suburbs, like Levittown, NY, to start a family. This is because this is what they wanted and would provide the best life for their family. It was the American dream.

African Americans, unable to afford the new homes in the suburbs, were stuck in the city. It was purely an economic decision for them, and arouse out of private market forces. While the south was segregated by law, northern America suffered from de facto segregation- not the result of government policy. After all, the 13th, 14th, and 15th Amendments were adopted nearly 100 years before the modern civil rights era.

Well, Richard Rothstein is here to tell us we are wrong. Or at the very least, we don't have the whole story. 

Imagine it is 1943; we are in the height of World War II, and the war-time economy is firing on all cylinders. You find work at a shipyard, or a Ford factory that is now retrofitted to produce bombers, and earn a good, steady wage. But since all building materials are reserved for the war effort, housing is hard to come by, so you're stuck living in crowded, shoddily built temporary apartments.

After the war is over, and the war heroes return home, the Federal Government is hard at work figuring out how to house these veterans and overcome the acute housing shortage plaguing the nation. So, the Federal Government starts to subsidize the crap out of suburbanization, insuring mortgages to encourage people to move out of these subpar living conditions. Lending is inherently risky, so banks require this federal insurance before they will offer you a loan. They need to control their risk. 

You learn of a new housing development being put in just outside town with lush, green yards; with leafy parks and shopping all located nearby. You go to the bank to get a mortgage in hopes of this better life, but they refuse to give you one because the Federal Government decides that you are "too risky" for them to insure, and without federal insurance, a bank refuses to loan to you.

This occurs not because of your creditworthiness; it occurs not because of your income or job status. It occurs simply because you are Black.

The story described above became the norm in America during and after the war, but the war was not nearly the start of it. It is just another story in the constant battle of governments all around the country to deprive people of color of their right to life, liberty, and the pursuit of happiness.

This is not just some story of the deep south; the land of Jim Crow and fervent segregationist policies and racist attitudes stemming from the premature cessation of Reconstruction. This happened in San Francisco, St. Louis, Baltimore, Cleveland, Detroit, Cincinnati, Chicago, New York, and nearly every city in the country. And as Richard Rothstein puts it, if it happened in San Francisco, the most progressive city in the country, it no doubt happened in your own backyard. Indeed, it was the national policy (Rothstein, 2017, p. 3; Rothstein, 2017, Chapter 1).

In this installment of my series in honor of Black History Month, I discuss how housing policy segregated America. This is not the result of my own research; it comes purely from reading Richard Rothstein's groundbreaker The Color of Law: A Forgotten History of How Our Government Segregated America. This post amounts to a summary of his work- the "SparkNotes", if you will. Rothstein gets 100% of the credit, and I intend to simply summarize the book, in hopes that you will give it a read yourself. Understanding the wrongs of the past are imperative in creating a more just future.

You know about this history, but what about everything else? "Segregation of Restrooms" by David Hoffman '41 is licensed under CC BY-NC 2.0

Premature cessation of Reconstruction

When the Civil War ended in 1865, the period of Reconstruction was ushered in, in which attempts to reintegrate the Confederacy back into the Union were made. It was a time of great civil rights progress, as the 13th, 14th, and 15th Amendments were passed during this time. Troops were sent to the south to provide protection of the newly emancipated slaves. However, these Federal troops left in 1877, ushering in an era of horrific violence against African Americans and establishment of many of the so-called Jim Crow laws.* These laws legalized segregation, and were upheld in court in cases such as Plessy v Ferguson (Rothstein, 2017, p. 39).

Explicit and not-so implicit segregation through zoning

In order to bolster segregation efforts in the south and in border states, cities adopted racially restrictive zoning laws. The first of these such laws was passed in Baltimore in 1910. As Rothstein notes, this law encouraged segregation by "prohibiting African Americans from buying homes on blocks where Whites were the majority and vice versa" (NYT, 1910 as cited in Rothstein, 2017 p. 44).

The purpose of these laws is clear- to keep Black and White separated. The justification for this law was that it was necessary to squander the White hysteria that African Americans were going to seek out White families, impregnate their daughters, and produce mixed race children (Rothstein, 2017, pp. 44-45). Absurd, I know. We truly did see African Americans in this way. We truly did not see them as human.

The Supreme Court outlawed this explicit racial zoning codes in Buchanan v. Warley  in 1917 (Rothstein, 2017, p. 47). However, instead of accepting the world of the highest court in the land, governments continued to try and find ways to segregate their populations through other means.  

Exclusionary Zoning

Discouraged by the Buchanan ruling, cities began to adopt exclusionary zoning policies. These policies forbade any sort of development in many areas that was not single family homes on large lots. As Rothstein notes, these ordinances were a "social class elitism that was not in itself racially biased", but the intent behind them was clear.  Rothstein notes: 

According to Bartholomew (a St. Louis planner), an important goal of St. Louis zoning was to prevent movement into the "finer residential districts... by colored people" (Rothstein, 2017 p. 49).

These zoning codes became national recommended best practice under the Harding Administration, where Herbert Hoover was Secretary of Commerce. Many people in the administration had overt racial bias, so it was very clear what the intent of the policies was (Rothstein, 2017 p. 51).  Rothstein notes that one of the administration members, Frederick Law Olmstead Jr (famous as being a designer of Central Park), said "in any housing developments which are to succeed... racial divisions... must be taken into account" (Rothstein, 2017, p. 51).

To make matters worse, cities often would rezone areas for industry if African Americans began to move there (Rothstein, 2017, p. 50). Despite the obvious racial intent behind these laws, the practice was upheld by the Supreme Court in the case Village of Euclid v. Ambler Realty Co (Rothstein, 2017, p. 52). And yes, that Village of Euclid is now the City of Euclid, Ohio, just east of Cleveland. 

But exclusionary zoning wasn't enough

In addition to exclusionary zoning, cities and even the Federal Government encouraged property owners to adopt deeds restricting future sale of homes to African Americans (Rothstein, 2017, pp. 78, 81, 84, 85). Property developers often required that prospective buyers join community organizations that adopted an official "Whites only" policy (Rothstein, 2017, p. 78). The Federal Government even made such agreements a requirement for developers to have their projects insured (described later) by the Federal Housing Administration in many cases (Rothstein, 2017, pp. 84,85). While these agreements were eventually outlawed by the Supreme Court (see Shelly v. Kraemer), the damage had been done (Rothstein, 2017, p. 91). 

"Whites only Colored only" by arievergreen is licensed under CC BY-NC-ND 2.0

An example of a restrictive covenant agreement in Florida from 1926. It states  "At no time shall the land included in said tract … be occupied by any Negro or person of Negro extraction". Governments enforced these agreements, and in many cases required them as a condition to insure mortgages.

Subsidizing the crap out of homeownership; but only for Whites

The Federal Government has always been overly interested in Americans becoming homeowners. This stemmed, at least to some extent, from the fear of Communism. Once the Russian Revolution 1917 occurred, which eventually led to the establishment of the Soviet Union, the US was quick in convincing its citizens that you needed to purchase a home to be a true patriot (Rothstein, 2017 p. 60). Renting was communist, in the eyes of America.

There was an organization called Better Homes in America, headed by (then) Secretary of Commerce Herbert Hoover. The organization published a pamphlet that taught prospective buyers how to become homeowners. This pamphlet encouraged buyers "to consider the general type of people living in the neighborhood before making a purchase" (Rothstein, 2017, p. 61). Yes, this policy was overseen by the Secretary of Commerce that we named a giant dam after in Nevada.

However, it was extremely expensive to buy a home in those days. Rothstein notes that they "typically required 50% down, interest only payments" (Rothstein, 2017, p. 65). Homeownership was simply out of the reach of the majority of Americans

The Great Depression wreaked havoc on the economy, and those lucky enough to own a home were at extreme risk of defaulting on their mortgages. To help these families, FDR's administration created the Home Owners' Loan Corporation (HOLC) which purchased the mortgages of people at risk of default and refinanced them with more favorable terms (Rothstein, 2017, p. 65).

To decide which families to help, the HOLC created, as Rothstein notes, "color coded maps of every metropolitan region in the nation, with the safest neighborhoods colored green and riskiest colored red. A neighborhood earned a red color if African Americans lived in it, even if it was a solid middle-class neighborhood of single family homes" (Rothstein, 2017, p. 64).  

This is the origin of what you might know of as redlining. 

Columbus' HOLC "Residential Security Map". Map retrieved from the Mapping Inequality project at the University of Richmond. This map is licensed under CC BY-NC-SA 4.0

The Federal Housing Administration (FHA) was also established during the New Deal to give first-time homebuyers the opportunity purchase a home. The FHA offered heavily subsidized mortgages and also insured mortgages that banks gave out. Since lending is a risky business for middle class buyers (banks usually lent to wealthy families no problem), banks often required FHA approval before issuing loans, which resulted in more favorable interest rates for buyers (Rothstein, 2017, pp. 9-10, 64-65).

The FHA, however, almost exclusively insured mortgages for Whites. African Americans were simply not allowed to have a mortgage insured by the Federal Government, so they were not able to buy homes. Not because of their creditworthiness, but because they were Black. Rothstein writes:

In thousands of communities between Fanwood (NJ) and Berkeley (CA), FHA policy was the same, with very few exceptions: no guarantees for mortgages to African Americans, or to Whites who might lease to African Americans, regardless of the applicants' creditworthiness (Rothstein, 2017, p. 67).

The FHA also insured large developments with the requirement that they be all-White. The VA was involved too. The perhaps most famous suburb in the US, Levittown, NY, was one such community (Rothstein, 2017, p. 70). I can't quite figure out why we spend so much time in school idealizing a place so rooted in the exclusion of African Americans.  

Levittown, NY- the poster child of Whites only American suburbanization. "Levittown early 1950's" by MarkGregory007 is licensed under CC BY-NC-SA 2.0

White Flight and Blockbusting

You likely learned a bit about White flight in school. It might have been described as something like this: "White people, back from the war and ready to start families, moved to the suburbs because this is what they wanted, and provided the best place to raise a family". While this is true, it masks a huge part of the story, which Rothstein describes.    

Blockbusting

The rationale for much of this discriminatory housing policy was to prevent Blacks from moving into White neighborhoods, because the mere presence of African Americans was thought to make property values fall. However, as Rothstein argues, integration actually raised property values because middle class African American families, with very few other housing options, would pay top dollar to get a house in neighborhoods in which they were allowed (Rothstein, 2017, p. 94).

But this did not fit the narrative, so real estate agents engaged in shady tactics, called blockbusting, that created a "self fulfilling prophecy". In borderline White and Black neighborhoods, real estate agent played on the bias and fear of homeowners by convincing them that, when African Americans started moving into their neighborhood, their neighborhood would quickly depreciate and they would lose their investment. Terrified, homeowners sold at below market prices, and real estate agents sold them at inflated prices to African American families. With nowhere else to go, many families were forced to pay the price (Rothstein, 2017, p. 95).

Rothstein notes that "common tactics included hiring African American women to push carriages with their babies through White neighborhoods, hiring African American men to drive cars with radios blasting through White neighborhoods, paying African American men to accompany agents knocking on doors to see if homes were for sale", etc (Rothstein, 2017, p. 95). 

So, the presence of African Americans did not cause property values to fall. Correlation does not imply causation. They fell because greedy real estate agents convinced homeowners to sell low. White flight is a misleading term. It implies Whites left under their own free will. While this may be true, I think it is reasonable to assume many Whites would have stayed where they were if the real estate agents didn't fear monger and purposely tank home values.  

Paying more for the same thing with government-mandated lower incomes

As described above, African American homebuyers paid inflated prices for homes. Though they were almost always denied mortgages, but on rare occasions they weren't, or when the developers who planned to build integrated neighborhoods weren't, they paid much higher interest rates (Rothstein, 2017, p. 118). The housing supply of African Americans was restricted, and as an economics major, I can tell you lower supply means a higher price. Housing was restricted so much that African Americans simply paid more than Whites for comparable housing (Rothstein, 2017, p. 172). 

Additionally, Black families paid more in property taxes than White families because county auditors would purposely overvalue African American properties. This was shown in a U.S Department of Housing and Urban Development study in 1973. This made it harder for Black families to save money to buy a house and accumulate the wealth that Whites were able to build (Little, 173 as cited in Rothstein, 2017, p. 171; Rothstein, 2017, pp. 171-175).

Southern Democrats in the 1930s were not known for being the most racially accepting people. In fact, FDR had to make a lot of concessions in his New Deal policy proposals to gain their support. As a result, many of the New Deal policies, such as minimum wage protection and Social Security, were not made available in industries in which African Americans made up the majority: agriculture and domestic service. Many other New Deal agencies, like the Tennessee Valley Authority, restricted African Americans to the lowest skill, lowest paying jobs. Many labor unions, which offered benefits of higher wages, did not admit African Americans or had segregated annex union chapters that had much lower benefits. The Federal Government provided certification to such unions, implicitly supporting their discriminatory tactics, in violation of their duty to uphold the Constitution and prevent discrimination (Rothstein, 2017, p. 155-160). 

Systematically depressed incomes exacerbated the effects of the racial housing policies. Not only was it nearly impossible for African Americans to accumulate wealth through home equity, they earned lower incomes, largely as a result of government policy. Thus, they could build little savings. With less money around for maintenance, many neighborhoods deteriorated (Rothstein, 2017, pp. 170-171).

The US has very little social mobility, particularly among African Americans. Rothstein (2017, p. 187), in citing Patrick Sharkey (2013), notes that African Americans growing up in the poorest neighborhoods had a 66% chance of staying there as adults . Thus, when government policy forces African Americans into poverty, the effects last for generations and generations.   

Purposely segregated public housing

In the height of the Great Depression and into World War II, housing was extremely scarce in the US. Knowing this, FDR implemented a program for public housing. As Rothstein notes, public housing was originally intended to simply be housing owned by the government- "it was not heavily subsidized" (Rothstein, 2017, pp. 17-18). People of all backgrounds lived in public housing. However, the housing was segregated. (Rothstein, 2017, p. 18-19)

Secretary of the Interior Harold Ickes was in charge of the Public Works Administration's task to alleviate the housing shortage. However, "he adopted a neighborhood composition rule" (Rothstein, 2017, p. 21). This meant that federal housing projects could only house the race predominately featured in that neighborhood. It it was mostly Black, only Blacks could live there, and vice versa. 

According to Rothstein, "the PWA segregated projects even where there was no previous pattern of segregation... The PWA designated many integrated neighborhoods as either White or Black and then used public housing to make the designation come true" (Rothstein, 2017, p. 21).

In Cleveland, for example, the Central neighborhood was once integrated, but the PWA build separate projects for Whites (Cedar-Central Apartments) and Blacks (Outhwaite Homes, which still exist today). Thus, an integrated neighborhood was explicitly segregated by the government (Rothstein, 2017, pp. 22-23). 

Furthermore, Rothstein, citing reporting done by the Dallas Morning News, notes that "every predominately White-occupied project had facilities, amenities, services, and maintenance that were superior to what was found in predominantly Black-occupied projects" (Flournoy and Rodrigue, 1985 as cited in Rothstein, 2017, p. 34).

The real estate lobby convinced the federal government that public housing should become subsidized projects for the poorest of the poor, obviously because of the competition government supplied housing would introduce to the private real estate market. As a result, middle class residents moved out, and without their rents, the conditions deteriorated rapidly (Rothstein, 2017, pp. 36-37). As Rothstein states:

        The Federal Government has required public housing to be made available only to families who            need substantial subsidies, while the same government declined to provide sufficient subsidies to            make public housing a decent place to live (Rothstein, 2017, p. 37). 

School segregation

School segregation was a prominent outcome of the "separate but equal" doctrine allowed by Plessy v. Ferguson , as were separate accommodations, water fountains, and restrooms. While the landmark Supreme Court Case, Brown v. Board of Education, outlawed such segregation, the damage had already been done. 

School boards and local governments across the country established separate schools for Black and White children. The schools, in theory, were supposed to be "separate but equal", but they weren't. The supreme court argued, " 'separate but equal' facilities are inherently unequal and violate the protections of the Equal Protection Clause of the Fourteenth Amendment" (Brown v. Board of Education of Topeka (1)).

"Ruby Bridges, the first African-American child to attend an all-White elementary school in the American South, escorted by U.S. Marshals dispatched by President Eisenhower for her safety. 14 November, 1960" by Jared Enos is licensed under CC BY-NC-SA 2.0

Before this 1954 Brown decision, school boards reinforced segregation by allowing only the schools that educated Black children be located in Black areas, and schools that educated White children to be in White areas. As Rothstein points out, transportation was not provided if children lived elsewhere. As a result, "African American families who wanted their children to be educated had no choice but to find new housing in the newly segregated areas" (Rothstein, 2017, p. 132). In other words, Black children were forced into Black neighborhoods because that's the only way they could get an education. Since many of these children were forced into poverty by government policy and often had unstable home lives, teachers could not give the one-on-one attention African American students needed to succeed (Rothstein, 2017, p. 187).

Just the beginning

This is just a short summary of Rothstein's work on displaying how official government policy divided America on racial lines. It does not even come close to telling the whole story. For that, read the book. I highly recommend reading The Color of Law. It is inspiring, infuriating, and simply fascinating.

In ensuing articles, I will discuss how transportation and infrastructure were used as another means of segregation. I will also discuss how many (if not all) of the policies and practices described above occurred in our own backyards, and how decisions being made to day are still short sighted and have disparate impacts on African American families, already hindered by the systemic discrimination of the past. The stories are tough. It is hard to believe that the communities we love were shaped through racist policies. But it is important to understand why they occurred. This will allow us to craft policy to ensure we make good on the words of our Constitution and ensuring that "all men are created equal", as promised by our founding fathers.

Notes: 

*To find our more about an election that was actually from its rightful winner, check out the election of 1876, in which Rutherford B. Hayes was declared winner after a dispute. The southern democrats agreed to hand the election to Hayes after the Republicans (the liberal party at the time when it came to civil rights), agreed to withdraw troops from the south. Rothstein notes 

Fraudulent white ballots were cast; the total vote in Edgefield (SC) substantially exceeded the entire voting age population. Results like these across the state [of South Carolina] gave segregationist Democrats the margin of victory they needed to seize control of South Carolina's government form the black-white coalition that had held office during Reconstruction (Rothstein, 2017, pp. 40-41).

See Also:

HOLC Residential Security Maps for US cities. Mapping Inequality project from the University of Richmond

Sources:

Brown v. Board of Education of Topeka (1). (n.d.). Oyez. Retrieved February 4, 2022, from https://www.oyez.org/cases/1940-1955/347us483

Little (Arthur D. Little, Inc.). 1973. A Study of Property Taxes and Urban Blight. Prepared for the U.S. Department of Housing and Urban Development, Janurary. Washington, D.C.: U.S. Government Printing Office.

NYT. 1910. "Baltimore Tries Drastic Plan of Race Segregation." New York Times, December 25.

Plessy v. Ferguson. (n.d.). Oyez. Retrieved February 4, 2022, from https://www.oyez.org/cases/1850-1900/163us537

Rothstein, R. (2017). The color of law: A forgotten history of how our government segregated America. Liveright. 

Sharkey, Patrick. 2013. Stuck in Place: Urban Neighborhoods and the End of Progress Toward Racial Equality. Chicago: University of Chicago Press.