Housing Discrimination: Where It Comes From and Where It’s Going

When people in the United States talk about poverty, they tend to focus on the solutions: raising the minimum wage, providing universal pre-K, lowering healthcare costs. While all of these options are valuable, as Henry David Thoreau wrote, “There are a thousand hacking at the branches of evil to one who is striking at the root.” So then how do you strike at the roots of a problem that is so pervasive and so deeply rooted in American society as poverty is? The answer lies in housing discrimination.

To find the beginnings of housing discrimination in the United States, one has to go back to the country’s foundation. In the colonial United States, the most common way for people to acquire land was through land grants called “headrights.” The greatest distribution of land grants followed the Revolutionary War when veterans were granted numerous plots in place of remuneration. In 1862, The first of the Homestead Acts were passed, opening up what would become 270 million acres or 10% of the United States’ total area to those willing to settle and improve the land. The problem is that both sets of land grants were conferred on citizens of the United States, a moniker which specifically excluded Black people until the Fourteenth Amendment’s passage in 1868.

After the passage of the Fourteenth Amendment, Whites living in the United States began using zoning restrictions and “neighborhood improvement associations” to restrict attempts at integrating communities. These associations threatened real estate agents who considered selling homes to Black people or various immigrant groups. including through the use of restrictive covenants to keep White communities un-integrated. These neighborhood-based private groups agreed to not allow nearby properties to be used for certain uses, such as public housing or sale to people to color. This is not even mentioning the direct forms of violence or the implication of violence used across the post-Reconstruction South as well as the North to either intimidate or force Black families to not move into predominantly White communities.

In 1937, the United States Housing Act was passed, creating the United States’ modern system of public housing. But conservatives in Congress required that the new legislation not attempt to integrate existing communities where public housing would be built. The Housing Act of 1949 further increased funding for low-income housing, but conservatives threatened to introduce a “poison pill” amendment that would require the bill to integrate communities if its provisions did not meet their standards. Such an amendment would have turned Southern Democrats against the bill, which spurred the post-World War II process of “urban renewal” by disproportionately destroying minority-heavy slums to replace them with less affordable housing or public works projects. Ultimately, the “poison pill” amendment was struck down but only after the law was written to restrict racial integration as the conservatives had demanded.

As the era of urban renewal began, urban planners like Robert Moses deliberately planned projects to separate communities based on race and income. For instance, Moses ordered the construction of the Cross Bronx Expressway through Tremont, creating an extensive divide between the North and South Bronx. This lead middle and upper class residents to migrate to the North Bronx, leaving many in the South Bronx with lowered property values and favoring automobile drivers, who were largely more affluent.

In 1933, the Home Owners Loan Corporation (HOLC) was established to create a stable mortgage market after the collapse of the housing market in the Great Depression. The HOLC created four categories for risk appraisal for mortgages, neighborhoods appraised as “hazardous” were colored in red on the HOLC’s maps, originating the term “redlining.” This process allowed communities of color to be rated as the most hazardous by the HOLC, while the Federal Housing Administration (FHA) used the HOLC’s maps as a guide for their housing investments, discouraging investment in communities of color. The FHA made housing more available to White families, who fled urban areas and some suburbs throughout the 1940s through 1960s in “white flight,” moving to White suburbs. White flight was catalyzed by attempts at academic integration that began after Brown v. Board of Education in 1954 and accelerated by integrated busing after the 1971 decision in Swann v. Charlotte-Mecklenburg Board of Education.

Conditions in America’s urban areas decayed in the 1950s and 1960s as a result of plummeting home values and property taxes, which in turn reduced investment in public schools and utilities. Race riots erupted in the United States in the mid-1960s, peaking with the Detroit riots in 1967. This lead President Lyndon Johnson to establish the Kerner Commission to investigate urban conditions. Governor Otto Kerner of Illinois, the commission’s namesake, recommended that improving race relations would “require opening suburban residential areas to Negroes and encouraging them to move closer to industrial centers.” The commission’s report was released in March 1968, one month before the assassination of Martin Luther King, Jr., whose death sparked another series of riots across the United States. This spurred Congress to follow through on the Kerner Commission’s recommendations with the Fair Housing Act of 1968.

Following the Fair Housing Act’s passage in 1968, however, housing discrimination continued. Insurance companies continued to discriminate by denying people of color homeowners insurance due to failure in having “pride of ownership” or “good housekeeping” skills. Insurance discrimination persisted in the 1970s and 1980s, leading to the creation of a robust non-profit housing discrimination sector. This all came before the Great Recession, which began with a housing crisis premeditated by subprime mortgages which were given disproportionately to people of color in “reverse redlining.” A bifurcated system of housing credit persisted in which White families were given far better credit options for getting a house than families of color were. When the Great Recession hit, Black households lost 53% of their wealth and Latinx households lost 66% of their wealth. White households lost 16% of their wealth. Meanwhile, between 2005 and 2009, communities of color lost $1.1 trillion in home equity due to the housing crisis.

The result is that now 50% of Black people and 40% of Latinx people live in communities with no White residents, while the average White person lives in a community that is 77% White. As alluded to above, housing discrimination matters because these processes have relegated people of color and the impoverished to communities with lower levels of quality of life and less economic opportunity, all factors in poverty. Black and Latinx households often live near schools with median test scores at the 17th and 27th percentile, respectively, while their poor White counterparts live near schools that score at the 47th percentile. In terms of attaining high school degrees, 87.2% of Whites graduate from high school while 76% of their Latinx counterparts and 72.5% of Black students do. The Centers for Disease Control have found that Black children are three times more likely to be exposed to lead due to their living situation than White children. Black families have half of the access to supermarkets that White families do, while Latinx families have only a third of the access, necessitating overuse of fast-food restaurants and other unhealthy options. This leads to Whites having an obesity rate of 32.6%, while Black people have an obesity rate of 47.8% and Latinx people a rate of 42.5%. These are the branches, and housing discrimination is the root they all go back to.

At the same time, people of color are four times as likely as Whites to need to depend on public transportation, worsening their economic prospects, especially with the impending threat of gentrification. This is all without mentioning disparities in criminal justice, itself a result of unequal economic opportunity and higher rates of exposure to violence. Perhaps housing’s greatest direct influence is on wealth, as the most common form of wealth accumulation in the United States is home ownership. White families have an average wealth of $919,000, compared to $192,000 for Latinx families and $140,000 for Black families. This is primarily because Whites far outpace families of color in home ownership, as people of color are far more likely to depend on renting a home or apartment in addition to having been denied access to home ownership due to redlining, blockbusting, and the other reasons presented above. Housing discrimination’s negative impact isn’t just limited to the communities that they affect, it also depresses the economic output of nearby suburbs. A 2017 study centered on Chicago found that if the city’s racial segregation were lowered to levels at the national median, the region would have earned an additional $4.4 billion in income.

This brings us the question of what is to be done? The National Fair Housing Alliance, in its 2017 report on housing trends, found that one of the biggest causes of housing discrimination was a lack of enforcement. This has been a persistent problem for the Fair Housing Act, whose provisions have been disparately imposed by each presidential administration. In January, HUD Secretary Ben Carson announced that his department was delaying the implementation of an Obama-era rule called the Affirmatively Furthering Fair Housing rule, intended to give the Fair Housing Act teeth. One such solution is the creation of an independent fair housing agency along the lines of the Consumer Financial Protection Bureau that seeks to enforce housing regulations equally regardless of administration. Another similar solution is to reform the Department of Housing and Urban Development’s Office of Fair Housing and Equal Opportunity, which has suffered from bureaucratic overlap and a lack of funding. Another potential solution is strengthening HUD’s Fair Housing Initiatives Program, which provides funds to non-profit housing discrimination groups, which have proven very successful in tackling the issue at the local level, as well as in bringing these issues to the Supreme Court in 2015.

Outside of existing government programs, the federal government should seek to expand equal access to good credit for housing, as well as redirecting housing and retirement subsidies to lower income households. Today, two-thirds of these subsidies go to the top 20% of households instead of the households that need them most. The Center on Budget and Policy Priorities released a 2016 report recommending that the Housing Choice Voucher program be expanded to allow families a greater choice in housing thanks to expanded affordability. The report also recommended connecting the value of these vouchers to local variations in rent and housing prices, allowing families of color to have more options for housing.

The most likely answer lies in some combination of these proposals, and communities have shown that progress can be made on housing discrimination with real dividends. Montgomery County, Maryland requires developers building new housing subdivisions to have one in eight of the houses be moderately-priced and that one third of these moderately-prices houses be prioritized for public housing so that they can be given to low-income households. This has opened up a variety of benefits to these households, including one of the best public school systems in the country. The Oak Park suburb of Chicago undertook an extensive program to ensure integrated housing thanks to the active efforts of its citizens to avoid discriminatory housing practices. The community established the Oak Park Housing Authority in 1947, which operated independently of local government and giving it control over the use of HUD housing vouchers. Additionally, school boards in Oak Park and Evanston focused not just on ensuring quality education, but on ensuring integration. These deliberate efforts have allowed these communities to avoid segregating trends that affected many communities similar to them.

But while these provisions were effective, they were not meant to be generic solutions. Rather, they acted as remedies to specific regional problems, as any of the above solutions should be. Tackling housing discrimination requires assessing each region it affects with the need for specificity. And while the provisions in Oak Park proved effective, they have also become subject to possible erosion over the years due to a changing political climate. When politicians and community actors emerge that may not have lived through the unrest of the 1950s and 1960s, they may not see the value of keeping these policies in place. Ultimately, though, the biggest impediment to tackling housing discrimination is its deepest root: racism. Dealing with housing discrimination requires accepting that there is value in integrated communities and overcoming racial biases that many communities may not be comfortable dealing with. The benefits of giving all of America’s children a equal chance at living in a vibrant community and in living a happy and fulfilling life are worth overcoming the hurdles of action.