'The Color Of Law' Details How U.S. Housing Policies Created Segregation

NPR's Ari Shapiro speaks with author Richard Rothstein about his new book, The Color of Law, which details how federal housing policies in the 1940s and '50s mandated segregation and undermined the ability of black families to own homes and build wealth.

ARI SHAPIRO, HOST:

This is the day in 1954 that the Supreme Court issued its famous ruling desegregating schools, Brown versus Board of Education. Today, schools remain largely segregated, and the author Richard Rothstein argues that's because housing is segregated. Even today, black and white people generally don't live in the same neighborhoods. Rothstein's new book is called "The Color Of Law: A Forgotten History Of How Our Government Segregated America." Welcome to the program.

RICHARD ROTHSTEIN: Thank you very much.

SHAPIRO: So the basic argument of your book is that while racist individuals might have contributed to housing segregation in specific cases, there was an overwhelming amount of government policy at the state, local and federal level that explicitly forced black people to live in different places from white people. And I have to admit that reading this book, the geographic scope, the longevity, the sheer creativity of these policies really took me by surprise.

ROTHSTEIN: It takes many people by surprise. This whole history has been forgotten. It used to be well-known. There was nothing hidden about it. The federal government pursued two important policies in the mid-20th century that segregated metropolitan areas. One was the first civilian public housing program which frequently demolished integrated neighborhoods in order to create segregated public housing.

The second program that the federal government pursued was to subsidize the development of suburbs on a condition that they be only sold to white families and that the homes in those suburbs had deeds that prohibited resale to African-Americans. These two policies worked together to segregate metropolitan areas in ways that they otherwise would never have been segregated.

SHAPIRO: The book gives so many different examples of how this played out, and one of the worst offenders is the FHA, the Federal Housing Administration. Explain why this one government agency has so much influence over where people live and what the FHA did to prevent black people from buying and owning homes.

ROTHSTEIN: Perhaps the best-known example is Levittown, just east of New York City, but there were subdivisions like this all over the country. What the federal government did in the 1940s and '50s, it came to a developer like Levitt, the Levitt family that built Levittown. That family could never have assembled the capital necessary to build 17,000 homes on its own.

What the federal government did, the FHA, is guarantee bank loans for construction and development to Levittown on condition that no homes be sold to African-Americans and that every home have a clause in its deed prohibiting resale to African-Americans.

SHAPIRO: The FHA policies here were not merely incentives or encouragements. You tell the story of progressive, idealistic developers who wanted to build integrated housing communities and were absolutely unable to do so. And we're not just talking about in the Deep South here.

ROTHSTEIN: We're not talking about the Deep South at all. We're talking of the North, the West, the Midwest. The great American novelist Wallace Stegner got a job right after World War II at Stanford University. There was an enormous civilian housing shortage. He joined and helped to lead a co-operative of 400 families who bought a large tract outside Stanford University where they wanted to build single-family homes.

The FHA refused to insure those homes refused to provide the capital for construction because the 400-member co-operative had three African-American members. The co-operative tried to resist the FHA's demand, promising the FHA that the number of African-Americans in the co-operative wouldn't exceed the percentage of African-Americans in California as a whole.

The FHA refused that compromise. Finally, the co-operative had to disband because they couldn't go ahead with the project. They sold the land to a private developer, who with FHA guarantees built single family homes with racially exclusive deeds.

SHAPIRO: Your book also explains one way in which black neighborhoods became undesirable. You described zoning laws in which black parts of town were officially zoned for industrial plants, waste disposal, other things that we would consider a blight. And meanwhile, those businesses were explicitly kept out of white neighborhoods in the same cities.

ROTHSTEIN: Yes, there are examples in St. Louis and Los Angeles, neighborhoods that once they had African-American residents were rezoned to permit industrial and toxic uses. Those rezonings turned those neighborhoods into slums. White families outside those neighborhoods looked upon the neighborhoods, saw slums and concluded that African-Americans were slum dwellers and that if they moved into their neighborhoods, into the white neighborhoods, they would bring those conditions with them.

SHAPIRO: Why were all of these policies put in place? Was it just overt racism on the part of policy makers? What actually was the motivation?

ROTHSTEIN: Well, that's very hard to know. And one thing that should be remembered is that it can't be blamed simply on the standards of the time because there were people who dissented. People did know better, but they had other priorities. And they caved in to private prejudice and some of their constituents. They themselves were prejudiced. It was assumptions about racial superiority, but it also was cowardice in not confronting popular views about racial superiority.

SHAPIRO: So as you lay out this history, these segregationist, discriminatory, harmful structures were built over the first half of the 20th century, and then Congress passes the Fair Housing Act in 1968 which says many of those practices were illegal, unconstitutional and they stop - for the most part, the worst ones. Why doesn't that solve the problem?

ROTHSTEIN: Well, because all the Fair Housing Act could do was prohibit future discrimination. But by the time the Fair Housing Act was passed, the patterns of segregation had been firmly established. Simply passing a Fair Housing Act did not enable African-Americans who were previously living in urban areas to relocate to the suburbs from which they'd been excluded. I gave the example earlier of Levittown in 1947-48, when those homes were built with a racially restrictive policy.

Those homes sold for about $8,000 a piece or $100,000 more or less in today's currency. African-Americans, working class families could have bought those homes. Today though, those homes sell for $300,000, $400,000. They're no longer affordable to working class families. In the ensuing two generations, the white families who moved into those homes gained that $200,000, $300,000 in equity appreciation.

African-Americans living in rented apartments, prohibited from moving to the suburbs, gained none of that appreciation. The result is that today nationwide, African-American incomes on average are about 60 percent of white incomes, but African-American wealth is about 5 to 7 percent of white wealth. That enormous difference is almost entirely attributable to unconstitutional federal housing policy practiced in the mid-20th century.

SHAPIRO: The current secretary of Housing and Urban Development, Ben Carson, has criticized what he calls social engineering programs that are meant to help black homeowners or renters. It sounds as though you're arguing that the first two-thirds of the 20th century were social engineering to harm black people in homeownership and that maybe it will require some social engineering to undo that harm.

ROTHSTEIN: Yes. What I tell Secretary Carson is that the reforms that he's criticizing are an attempt to undo social engineering. Clearly he's right that when you try to engineer social policy the way that is necessary to reverse segregation, there are some unintended consequences.

There will be prices to be paid, but those prices are small compared to the costs of the social engineering that was conducted in the first two-thirds of the 20th century by the federal government. And that's a price that we have to pay to rectify a serious constitutional violation.

SHAPIRO: Richard Rothstein is with the Economic Policy Institute and the Thurgood Marshall Institute of the NAACP Legal Defense Fund. His new book is "The Color Of Law: A Forgotten History Of How Our Government Segregated America." Thank you so much.

ROTHSTEIN: Thank you.

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