[5/5] Must read. Stunning book on how segregation in the United States was propagated through housing policy from the local to federal level. Stop reading this and go find this book somewhere.
Every few years, us United States citizens love arguing about affirmative action and whether or not it’s not enough, too much, or just a stupid way to approach remedying historic racial inequalities. Roughly speaking, someone’s stance on this topic is determined by two things: was segregation a social de facto issue or was it de jure (by law) and have the effects of segregation persisted to today?
Rothstein argues both of these conditions are true. While social effects certainly played a role in segregation, these pale in comparison to the governmental policies that defined how we live. Segregation was not just a bottom-up issue where Whites didn’t want to live with Blacks and vice versa. Rather, segregation was mandated by law and specifically housing laws. This is not an issue of Democrat-Republican, this is an American issue.
Color of Law was the first book I’ve read on race, so I can’t say I have much to draw on. This isn’t a real review insomuch as it is a “wow these things stood out to me as being particularly heinous”. You should probably just go read the book.
The context for all the following is that all of what the author describes is after the 13th, 14th, and 15th amendments which guaranteed rights and equal protections to all citizens. Any violation after was therefore unconstitutional. A lot of what he describes also happens after the Civil Rights Act and Civil Housing Act which further solidifies the claim that none of the aforementioned actions were legal.
FHA
The FHA or federal housing authority gave out money for what public housing developers were able to build. While already suspicious from their policy that public housing should match the racial proportions of the nearby surroundings, this policy was very clearly abused. There were all white developments in the middle of all black communities. Proposed Black communities near city centers and scenic views were denied and most of the approved locations were directly next to industrial zones.
Beyond the subtle segregation, the FHA was also just directly denying mortgages to African American communities. Not only did African Americans struggle to find housing near their workplaces, they then would have to take out extremely risky mortgages to fund the meager housing they could find.
Ghettos are not natural
Because supply of housing was so controlled and restricted, African Americans paid several times (3-6x) what their White neighbors paid. Not only that but since no one would insure them, they would have to take mortgages where a single missed payment meant they were evicted. Making monthly rent was quite literally a problem of life or death. Through much higher than market prices and high stakes, tenants did the logical thing and would sublease out their already small unit into subunits to try and make rent. Compound this sort of behavior by decades and suddenly its tough to view ghettos as a natural creation but the consequence of predatory housing policy.
I have not very strongly held belief that free markets should stamp out inequalities in a system. If a firm were to limit its talent force by some arbitrary metric, then in the long run, they’d be outcompeted by groups that focused purely on merit. I’m a little less sure that’s true now.
Block busting
While African Americans were usually kept out of White neighborhoods, there was one case where that wasn’t true: block-busting. Developers would sell houses to African Americans in previously all-white neighborhoods at inflated prices. For the White people living there, they’d panic and flee the neighborhood fearing that the value of their property would drop. (This wasn’t even true, properties tended to appreciate in more racially homogenous communities since African Americans paid so much more for the same type of housing. This lie was fed to communities by developers trying to turn a profit.) As all the White people sold their houses at lower and lower prices in panic, developers could continue charging inflated prices to the new Black residents they were courting.
Interstate highways
When the US decided to build an international interstate highway system, lots of engineers saw this as a way to “kill two birds with one stone”. Not only could they build a fancy new road system, but they could also remove “undesirable communities and slums”. As you can guess, these new Interstates disproportionately destroyed African American communities while providing new links between the city and new White suburbs.
Interstates would cut through communities or be placed strategically to separate White and African American neighborhoods. Pollution from the Interstate would destroy the property values of the people who lived near it and shutter the windows of previously thriving Black areas of the city.
2008 Housing Bubble
Subprime loans are loans given to people who might have trouble making repayment. To balance out that risk, these loans often have higher interest rates, poor collateral, and few protections offered to the borrower. When the 2008 Financial Collapse happened, who was affected most dramatically? The people who had gotten subprime mortgages. Because of the poor terms, they lost everything. It shouldn’t even be a surprise at this point to realize that subprime mortgages were given at skewed rates to Black families.
In 2012, Wells Fargo was forced to settle after the Department of Justice found that its lending practices were inherently discriminatory to both African American and Hispanic borrowers. Discrimination based on race is not a vestige of the 20th century but an ongoing practice that permeates our daily lives.
So what now?
If you are to take the book at face value and accept what it states, then there are certain hard truths you have to swallow. The United States is not an equitable society. If you born in a lower socioeconomic class, the “American dream” is far more unattainable than if you were born in the top percentile. It also just so happens that we spent over a century after it became unconstitutional using the law to relegate African Americans to lower socioeconomic classes.
Given these premises, current race-neutral laws are not neutral. Rather, they propagate a deepening divide between the races that was established illegally. In light of this, nothing except policies which help even up the unfair divide make sense. If the American Dream is to live on, even in imagination, we have to correct the wrongs that we, as Americans, have committed. Even if you or I aren’t directly responsible for how we got here, we do have a direct responsibility in righting the wrongs of our national past.