The Government Created Housing Segregation. Here’s How the Government Can End It.

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A motorist pulls into a driveway in a neighborhood in Henderson, Nevada. 

While several progressive presidential candidates have focused on the important question of housing affordability, they have paid less attention to the equally important challenge posed by persistent housing segregation between white and black families. That imbalance is a big mistake if progressives hope to address the gaping racial inequalities in American society.

More than 50 years after passage of the Fair Housing Act, black-white segregation remains strikingly high and imposes unfair burdens on black people even when they have the same income or education levels as whites. Indeed, housing segregation, which government officials engineered as a tool of white supremacy, poses one of the largest threats to racial equality in America today.

Typically, higher levels of education and income translate into access to high-opportunity neighborhoods and the possibility of accumulating greater wealth. In the case of African Americans, however, residential segregation impedes access to middle-class neighborhoods with strong schools and strongly appreciating home values.

In fact, black-white residential segregation helps explain two astonishing facts: Middle-class blacks live in neighborhoods with higher poverty rates than low-income whites; and African American households headed by an individual with a bachelor’s degree have less wealth, on average, than white households headed by an individual who lacks a high school degree.

Because government created high levels of black-white segregation, government must take action to undo it. As we outline in a new report for The Century Foundation, America needs strong policies to counter the legacy of generations of racial discrimination in housing; contemporary residential racial discrimination; contemporary residential economic discrimination that disproportionately hurts African Americans; and the re-segregating effects of displacement that can come with gentrification.

The Enduring Problem of Black-White Segregation

While many racial, ethnic, and economic groups remain segregated in American society, the separation between African Americans and whites stands out. An analysis of U.S. census data from 2013 to 2017 found that the “dissimilarity index” between blacks and non-Hispanic whites in the median metropolitan area stood at 0.526—meaning that 52.6 percent of African Americans or whites would have to move for the area to be fully integrated. (A dissimilarity index of zero represents complete integration between two groups; 100 represents absolute apartheid.) The dissimilarity index for non-Hispanic whites and Asians and Hispanics is lower, as is the dissimilarity index for poor and non-poor Americans.

Where people live affects so much of their lives—their access to transportation, education, employment opportunities, and good health care. Black-white segregation has contributed significantly to the enormous wealth gap between these races, and their grossly unequal access to strong public-education opportunities.

Racial residential segregation inhibits home value appreciation in predominantly African American neighborhoods. White resistance to purchasing in predominantly black neighborhoods—even when all other characteristics of homes and neighborhoods are identical—reduces the number of potential buyers, and thus the rates of home appreciation.

Because homes are typically the largest financial asset for most Americans, segregated markets significantly reduce the accumulated wealth of blacks. This phenomenon helps explain why the median income for black households is 59 percent that of white households, but black median household net worth is much lower—just 8 percent of white median household net worth.

Racial residential segregation also means that African Americans are more likely to be steered toward high-poverty neighborhoods, further contributing to the opportunity gap. Typically, families with higher levels of income have access to more-affluent neighborhoods. Yet, even middle-class black families are more likely to live in concentrated poverty and thus more likely to send their children to high-poverty schools than low-income whites. In fact, sociologist Patrick Sharkey finds that middle-class African American households earning $100,000 or more per year live in neighborhoods with the same disadvantages as the average white household earning less than $30,000 per year.

Because of racial residential segregation, low-income African Americans are much less likely to be afforded the opportunity to attend socioeconomically integrated schools—where low-income students perform as much as two grade levels higher than low-income students in high-poverty schools. According to a 2017 analysis by Emma García of the Economic Policy Institute, less than one in five poor black children had access to a predominantly middle-class school, compared to almost half of poor white children.

Scholars have found that African Americans in moderately segregated metropolitan areas have much better employment levels, earnings, and mortality rates than African Americans in metropolitan areas with very high segregation levels. UCLA’s Richard H. Sander and Jonathan M. Zazloff, along with Yana A. Kucheva of the City College of New York, looked at outcomes for African Americans in metropolitan areas where the black-white dissimilarity index was below 0.60 and compared them with outcomes for African Americans living in areas with a dissimilarity index above 0.80. The outcomes were consistently better for African Americans living in moderately segregated areas than highly segregated areas, both in absolute terms and compared with non-Hispanic whites living in the regions.

Similarly, the unemployment rate for black men ages 25 to 34 was 17.4 percent in highly segregated areas, compared with 10.1 percent in moderately segregated areas. Unemployment was 3.48 times the level of non-Hispanic whites in highly segregated areas, but 1.44 times the level of non-Hispanic whites in moderately segregated areas. Earnings for black men aged 25 to 34 were $4,000 higher in moderately segregated areas than in highly segregated areas, and relative to non-Hispanic whites, the earnings were higher—68 percent in moderately segregated areas compared with 48 percent in highly segregated areas. Likewise, for all blacks, age-adjusted mortality (relative to non-Hispanic whites) varied with the degree of segregation, too: It was better in moderately segregated regions: 1.14 times that of non-Hispanic whites in moderately segregated areas and 1.42 times that in highly segregated areas.

The Deliberate Social Engineering of Black-White Residential Segregation 

While some attribute segregation to a “natural” desire for birds of a feather to flock together, segregation in America was deliberately imposed by government. Segregation was and is best understood as a tool used to promote and preserve white supremacy, deployed to make it easier to isolate, divest from, surveil, and police black (and brown) people concentrated in certain communities. The “brilliance” of this racist tool is that its evil use creates its own justification. As communities of color suffer under the deprivations that come with segregation—economic disinvestment, political disenfranchisement, educational inequity, and unfair policing practices—those who build and install resilient and enduring racist systems that sustain segregation explain their decisions in terms of protecting and promoting safety, strong schools, and stable housing markets—the very attributes that the conditions of segregation disrupted for blacks.

African Americans express the same desires as most Americans with regard to neighborhood characteristics. According to a study of black Long Islanders, residents considered the most important neighborhood characteristics to be a low crime rate (89 percent), landlords/homeowners who maintain their property (81 percent), high-quality public schools (80 percent), and good public services (78 percent). Yet, only 16 percent rated their local public schools as excellent, and 43 percent reported feeling that their local government services were not a good value for the taxes that they paid.

Black people also generally prefer integrated neighborhoods and schools. In fact, a recent Pew survey found that blacks are much more supportive of integrated schools than are whites. Sixty-eight percent of blacks say that “students should go to schools that are racially and ethnically mixed, even if it means some students don’t go to school in their local community,” compared to just 35 percent of whites.

Racial housing segregation, residential poverty concentration, and diminished housing access did not emerge accidentally. Richard Rothstein, author of The Color of Law, contends that this enduring segregation results from “a century of social engineering on the part of federal, state, and local governments that enacted policies to keep African Americans separate and subordinate.” Those engineers were both liberal and conservative, dwelling in multiple branches and levels of government.

Members of government and private entities began deliberately to segregate residential areas by race in the late 19th and early 20th centuries, largely by prohibiting blacks from purchasing homes in majority-white neighborhoods. Pioneered by Baltimore in 1910, racial zoning quickly emerged as an effective way to further subjugate and segregate African Americans. Baltimore’s then-mayor did not mince words when discussing the motivation for such an ordinance: “Blacks should be quarantined in isolated slums in order to reduce the incidence of civil disturbance, to prevent the spread of communicable disease into nearby white neighborhoods, and to protect property values among the white majority.”

The U.S. Supreme Court in 1917 struck down explicit racial zoning with its decision in Buchanan v. Warley, but the ruling failed to put an end to segregation; instead, it motivated a new wave of racist creativity by white leaders and communities. Localities quickly circumvented Buchanan to preserve the racial caste system in housing by switching from race-based zoning to economic zoning. Cities and localities designed policies now known as “exclusionary zoning,” which require that neighborhoods consist exclusively of single-family homes, have minimum lot sizes, and/or have minimum square-footage requirements. These policies rapidly proliferated. In 1916, just eight cities had zoning ordinances; by 1936, that number was 1,246.

The U.S. Supreme Court affirmed the practice of exclusionary zoning in Euclid v. Ambler (1926), finding that zoning ordinances were reasonable extensions of police power and potentially beneficial to public welfare. In class-laden language, the opinion in Euclid stated that an apartment could be “a mere parasite, constructed in order to take advantage of the open spaces and attractive surroundings created by the residential character of the district.” Of course, because many blacks could not afford to buy around the expensive housing restrictions, such “race-neutral” economic zoning policies had a racially discriminatory effect.

Explicitly racist policies also endured. Many white homeowners, for example, banded together to adopt racially restrictive covenants in their neighborhoods, which forbade any buyer from reselling a home to black buyers—a practice not struck down by the Supreme Court until 1948.

In addition, the federal government enforced segregation through “redlining” of mortgage loans. The official position of the Federal Housing Administration—which underwrote $120 billion in new housing construction between 1934 and 1962—was that blacks were an adverse influence on property values. Baking racial exclusion into programs designed to promote homeownership, an FHA manual suggested that the best financial bets were those where safeguards—such as highways separating communities—could prevent “the infiltration of lower class occupancy, and inharmonious racial groups.” Homebuyers seeking to purchase in “red” zone neighborhoods—those with high percentages of black residents, regardless of the wealth of those residents—would likely be denied a mortgage loan and received no federal support.

Simultaneously, extralegal violence became an all-too-common method of maintaining segregation through intimidation and fear. In one case, when a middle-class black family moved into an all-white neighborhood in a suburb of Philadelphia in 1957, some 600 white demonstrators gathered in front of the house and pelted the home and family with rocks. Shortly thereafter, several whites rented a unit next door to the family, hoisting up a Confederate flag and blaring music throughout the night. Klan and community members burned a cross in the family’s yard. Law enforcement largely declined to intervene, with one sergeant suffering a demotion to patrolman after objecting to his orders not to interfere with the rioters.

Today, forms of discrimination still stymie racial integration and housing opportunities for black Americans. African Americans frequently encounter discrimination when searching for housing at all stages: They are more likely to receive subpar service when interacting with real-estate agents, and are shown fewer homes for sale or rent than whites are. A 2003 study found that real-estate agents’ steering of residents away from neighborhoods due to their racial composition is shockingly persistent, even if illegal. The practice showed up in up to 15 percent of tests, based on clear and explicit indications by the agent.

Now, there is evidence that such discrimination might have moved onto new platforms, with technology reinforcing human and societal biases. In March 2019, the U.S. Department of Housing and Urban Development (HUD) announced a lawsuit against social media giant Facebook, alleging that the platform allowed advertisers to use data in order to exclude certain racial groups from seeing home or apartment advertisements.

Relatedly, black homebuyers are more likely to be steered toward high-interest and high-risk loans when seeking to purchase a home, regardless of income or creditworthiness. And to this day, public-policy choices by state and local officials tend to steer public-housing units, which are disproportionately occupied by black and brown residents, into high-poverty areas with fewer resources and opportunities.

Public-Policy Remedies

Government having concocted many of the schemes for black-white segregation, government must be the primary vehicle to dismantle it.

To address the legacy of generations of racial discrimination in housing, one first step would be to reinstitute the Obama-era rule requiring municipalities to implement Affirmatively Furthering Fair Housing (AFFH). When Congress passed the Fair Housing Act (FHA) in 1968, it knew that simply outlawing discrimination was not enough; affirmative steps would be required. But it was not until decades later, in 2015, that the government introduced a rule to require jurisdictions to come up with plans for “taking meaningful actions, in addition to combating discrimination, that overcome patterns of segregation and foster inclusive communities.” In an enormous setback, President Donald Trump and Secretary of Housing and Urban Development Ben Carson suspended the AFFH rule in 2018. Housing justice and the fulfillment of the Fair Housing Act should not be held hostage to the political whims of an administration led by a man who was himself investigated for racial discrimination in his own real-estate holdings. Reinstatement and rigorous enforcement of the AFFH are clear next steps in any quest to narrow the black-white housing opportunity gap.

To address contemporary racial residential discrimination, policymakers should increase the use of fair housing testers. Individual testers (with no true intent to purchase or rent a home) pose as potential buyers or renters for the purpose of gathering information on possible FHA violations. Testing has yielded eye-opening results. One study by the Chicago Lawyers’ Committee for Civil Rights tested for the frequency of income and racial discrimination in 70 properties in six Chicago neighborhoods. Of the 70, a full 30 revealed one or both forms of discrimination. HUD funds many of these exercises through the Fair Housing Initiatives Program (FHIP), and should increase the resources allotted to the program to match the prevalence and gravity of the problem.

Policymakers should also re-establish and strengthen an Obama-era federal interagency task force to combat lending discrimination. Established early in the Obama administration, the Financial Fraud Enforcement Task Force (FFETF) brought together a broad coalition of law enforcement, regulatory, and investigatory agencies to combat financial fraud. The federal government, which at one time was itself a purveyor of racist lending and housing practices, should provide the appropriate resources and coordination to seek justice for those who continued to be wronged by financial racism.

To address the ongoing economic discrimination that disproportionately hurts African Americans, federal policymakers should act to curb discrimination against African Americans (and others) that is cloaked in the disguise of income discrimination. Legislators should outlaw discrimination based on source of income, and support “inclusionary zoning” policies that require developers to set aside a portion of new housing units to be affordable for low- and moderate-income residents. Most importantly, policymakers should enact an Economic Fair Housing Act—to parallel the 1968 Fair Housing Act—to curb exclusionary zoning laws (such as banning apartment buildings, townhouses, or houses on modest-size lots). Just as it is illegal to discriminate in housing based on race, it should be illegal for municipalities to employ exclusionary zoning policies that discriminate based on income, which excludes the non-rich from many neighborhoods and their associated schools. Although people would continue to be priced out of some units by the private market, government zoning policies should not, on top of that, discriminate based on income by rendering off-limits entire communities where it is impossible to rent an apartment, live in a townhouse, or purchase a home on a modest plot of land.

One alternative to a complete ban on exclusionary zoning would be policies that require municipalities receiving federal infrastructure dollars to reduce exclusionary zoning policies. Senator Cory Booker, for example, has proposed legislation that requires states, cities, and counties that receive some $16 billion in a variety of infrastructure programs to develop strategies to reduce barriers to housing development and increase the supply of housing. Plans could include authorizing more high-density and multifamily zoning and relaxing lot size restrictions. The goal is for affordable housing units to comprise not less than 20 percent of new housing stock.

Senator Elizabeth Warren, likewise, has proposed a comprehensive housing plan that includes a new $10 billion infrastructure program with powerful incentives to reduce exclusionary zoning rules, such as “minimum lot sizes or mandatory parking requirements.” As she explained in March 2019, “to even apply for these grants,” localities “must reform land-use rules to allow for the construction of additional well-located affordable housing units.”

Similar legislation to reduce exclusionary zoning, particularly near mass-transit hubs, has been introduced and debated in California. Spurred by affordability concerns (even more than concerns about segregation), Massachusetts and Seattle have also considered proposals to curtail exclusionary zoning. On the city level, Minneapolis recently adopted a proposal to end single-family zoning restrictions entirely.

California activist Brian Hanlon notes that progressives are rightfully proud of their openness to immigrants, so why, he asks, are some standing by exclusionary zoning, which says, “We welcome outsiders—but you’ve got to have a $2 million entrance fee to live here.”

Finally, to address displacement from gentrification that fosters re-segregation, new tools are also needed. One challenge facing contemporary housing integration efforts is how to dismantle the racist system of policies that created and continue to sustain residential segregation without simultaneously destroying valuable cultural and economic institutions that black and brown communities have created in response to it.

As formerly segregated neighborhoods become more diverse, they do not automatically become more equitable: The rising costs often displace long-term residents and threaten cultural institutions and practices. Racially concentrated poverty is an evil that public policy must address, but pro-integration housing plans should seek solutions that respect and amplify the economic and cultural power of the long-standing institutions and people in that neighborhood.

In a desire to revitalize disinvested neighborhoods, policymakers frequently introduce long-term tax abatement policies that entice wealthy individuals and investors into the area but ultimately underserve current residents. Such policies allow the wealthy to live and operate in a neighborhood while having no obligation to contribute to the public good there—the upkeep of its streets and parks, its public safety, its schools. All the while, the neighborhood’s original residents continue to shoulder these burdens because they have received no such tax abatements.

If localities believe that tax abatements are necessary for growth, they should offer them with enforceable stipulations requiring new businesses to employ, at a living wage, members of the community that host them. As well, they should offer tax abatements first to already existing small businesses to allow them to expand and employ more people.

Today, however, policymakers tend to invest in newcomers while largely ignoring long-term and legacy residents—persisting in a deeply disturbing historical tendency to distrust people of color with self-governance. Instead, policymakers should regard long-term residents as decision-makers in their neighborhood. Developers and policymakers should not only consult with but also take direction from the democratic representatives of community members when determining what gets built and where.

Of the many ways in which American society unfairly treats black people, the continued segregation of residential areas remains a central source of racial inequality. Taking actions of the type outlined here would constitute an important step in combating this enduring American outrage.

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