Richard Rothstein is a distinguished fellow of the Economic Policy Institute and a senior fellow (emeritus) at the Thurgood Marshall Institute of the NAACP Legal Defense Fund. He is today widely lauded as the author of The Color of Law: A Forgotten History of How Our Government Segregated America (2017), which excavates a history of how federal and state policies were created to explicitly segregate metropolitan areas, creating racially homogenous neighborhoods. Richard feels the damage done by these policies is so systemic that a very big step is needed – a new civil rights movement – one that is focused on housing segregation and its economic fallout.
Both an economic analyst and journalist whose career primarily focused on issues of race and education, Richard has also published Grading Education: Getting Accountability Right (2008), and Class and Schools: Using Social, Economic and Educational Reform to Close the Black–White Achievement Gap (2004). From 1999 until 2002, he also served as the national education columnist for The New York Times.
Richard was a senior fellow at the Chief Justice Earl Warren Institute on Law and Social Policy at the University of California, Berkeley, a Tisch Visiting Professor at Teachers College, Columbia University, and adjunct professor at Occidental College in Los Angeles. He also worked as a senior correspondent for The American Prospect. He lectures widely on issues of equity, race, and education.
Insights and Inspirations
- Richards argues that federal, state, and local policy explicitly segregated metropolitan areas nationwide and that these policies violated the Constitution.
- Activists must rise up to insist on change. To propel change forward quickly. A national civil rights movement to ensure that we all get to reap the economic benefits of living in this rich and diverse country.
Information and Links
- Read the book. It’s a good primer for those interested in development and zoning history, as well as how to think about what equitable housing means.
- Richard talks to Ta-Nehisi Coates on C-Span.
- And is interviewed on Fresh Air!
Read the podcast transcript here
Eve Picker: [00:00:12] Hi there. Thanks so much for joining me today for the latest episode of Impact Real Estate Investing. My guest today is Richard Rothstein, a journalist and researcher at the Economic Policy Institute. He is widely lauded as the author of ‘The Color of Law: A Forgotten History of How Our Government Segregated America.’ In this book, he explores how federal, state and local policy explicitly segregated metropolitan areas nationwide. And he argues that these policies violated the Constitution. Richard recognizes that many small steps are being taken today to remedy this, but the damage done by these housing segregation policies is so overwhelming that he believes a very big step is needed to jumpstart desegregation in a meaningful way – a new civil rights movement, one focused on housing segregation. Be sure to go to EvePicker.com to find out more about Richard on the show notes page for this episode. And be sure to sign up for my newsletter so you can access information about impact real estate investing and get the latest news about the exciting projects on my crowdfunding platform, Small Change.
Eve: [00:01:46] Hello, Richard, I’m really delighted to have this opportunity to talk to you today.
Richard Rothstein: [00:01:51] Well, thank you very much for engaging with me on this topic.
Eve: [00:01:54] Oh, yes, it’s an important one. You’re perhaps best known today for the research you’ve done on the history of housing segregation in the United States, and the really important book that you’ve written that’s called ‘The Color of Law.’ And I’ve heard you say every metropolitan area in this country is residentially segregated. I’m wondering how we ended up in this very racially segregated landscape.
Richard: [00:02:23] Well, we have a national myth about how we ended up. That myth is flawed. The myth is that what we’ve got is something we call ‘de facto segregation’ that just have sort of happened by accident. It happened because of private bigotry on the part of homeowners and landlords and white neighborhoods who wouldn’t sell or rent to African Americans. Or because of businesses in the private economy, purely private economic actors like real estate agents, banks or insurance companies that discriminated. Or maybe we tell ourselves it’s because people just like to live with each other of the same race. It’s all natural that way. You feel more comfortable if we do it. Or maybe we say it’s because of income differences. African Americans on average have lower incomes than whites, not all, but on average, and so can’t frequently afford to live in higher opportunity. White neighborhoods, all of these individual bigoted but personal decisions, not governmental actions, is what created residential segregation. And we tell ourselves that what happened naturally can only happen naturally. It’s other nonsense. The reason we have residential segregation in this country is because of a network of racially explicit federal, state and local policies that were designed to ensure that African Americans and whites could not live near one another. In any metropolitan area, we have a totally unconstitutional system of residential boundaries. They were established in the mid 20th century in such a powerful way that they still determine where we live today.
Eve: [00:04:06] Wow. So what what are some of these policies? Can you be a little more explicit?
Richard: [00:04:13] Sure. I could go on for hours, but I’ll mention just a couple of them. In the post-World War II period, the Federal Housing Administration and Veterans Administrations determined upon a policy to move the entire white working-class and lower middle-class population out of the urban areas where they were then living, into single family homes in all white suburbs that came to ring American cities. At the time, in the post-World War II period, low- and middle-class, working-class and even middle-class families were all living in urban areas. We hadn’t suburbanized at that point. They were living there because we were a manufacturing economy and factories had to be located near deep water ports or railroad terminals. So did banks and other service industries that were servicing those factories, because they needed to be able to get their parts and ship their final products, in that way. And so, we had an urban population, both African Americans and whites, living in urban areas. But the federal government determined to move the whites, not the African Americans, but the whites only, out of those urban areas of the single family homes into all-white suburbs. Perhaps the most famous of these is Levittown, east of New York City. 17,000 homes in one place, single family homes. The developer, William Levitt, could never have assembled the capital to build a subdivision that enormous on his own. No bank would be crazy enough to lend him the money to do that. To be worth, as I said, the suburban country, at that time. The banks thought that it was a crazy idea that nobody would want to move there. The only way that Levitt could assemble the capital is by going to the Federal Housing Administration and Veterans Administration, submitting his plans for the development, the architectural design of the homes, the construction materials, he was going to use, the layout of the streets, and a commitment that the Federal Housing Administration, the Veterans Administration required, that he never sell a home to an African American. The Federal Housing Administration and Veterans Administration even required that Levitt place a clause in the deed of every home prohibiting resale to African Americans or rental to African Americans. But this was a racially explicit policy. It wasn’t the action of rogue bureaucrats working in federal agencies. It was written policy. The Federal Housing Administration had an underwriting manual that was distributed to appraisers throughout the country whose job it was to evaluate the applications of builders to create new subdivisions or even smaller projects. The manual said you could not recommend, for a federal bank guarantee, a loan to a developer who was going to sell to African Americans. And the manual went so far as to say you couldn’t even recommend for a federal bank guarantee an all white project that was going to be located near where African-Americans were living, because in the words of the manual, that would run the risk of infiltration by inharmonious racial groups. This was, I say, an explicit racial policy. Levitt, with that kind of a guarantee, built this large subdivision and builders all over the country did the same. They were inexpensive homes. These were returning World War II veterans, mostly who bought these homes. They sold at the time for eight, nine thousand dollars, perhaps. Today’s money, inflation adjusted, that’s about 100,000 dollars. Well, as you know, those homes not in Levittown, not in any suburb in this country, no longer sell for 100,000 dollars.
Eve: [00:08:09] Right.
Richard: [00:08:10] The value of those homes appreciated. The families who bought them gained wealth from the equity they now had in their homes. And as a result, today, African American incomes are about 60 percent of white incomes. You’d expect African American wealth to be similar. But in fact, while African American incomes are 60 percent of white incomes, African American wealth is only five percent of white wealth. And that enormous difference between the 60 percent income ratio and the five percent wealth ratio is entirely attributable to unconstitutional, federal housing policy that was practiced in the mid 20th century. I’m sorry. Go on.
Eve: [00:08:53] Now, that’s OK. So, One of the biggest consequences of this housing segregation is just the loss of generational wealth that we’re struggling with today.
Richard: [00:09:04] Yes, absolutely. Those, the white families who bought those homes and gained this wealth use the wealth to send their children to college. They used it to perhaps take care of emergencies, medical emergencies or temporary unemployment. You know, if you have wealth and you lose a job, you can weather the temporary unemployment. If you don’t have wealth, and you lose a job, you’re pushed further down the social and economic scale. And the white families also use it to subsidize their retirements, and most importantly, to bequeath wealth to their children and grandchildren …
Eve: [00:09:39] Yes.
Richard: [00:09:40] … who then down payments for their own homes. So, that’s why I say that these policies are so powerful that they still determine the racial landscape of today.
Eve: [00:09:50] So, how many years did it take us to get where we are today because of those policies?
Richard: [00:09:57] Well, you know, the policies began, the federal government wasn’t involved in housing at all until the New Deal of Franklin Roosevelt and the Depression, the federal government’s first entry into the civilian housing market was at the beginning of the New Dealm the Roosevelt administration. When the Public Works Administration, one of the first New Deal agencies, beginning in 1933, built the first public housing in this country for civilians and everywhere it built it, it segregated it. Frequently, again, creating segregated patterns where they hadn’t previously existed. In many of these downtown urban areas, that I described earlier, that, where both blacks and whites lived. You know, the great African American poet, novelist, playwright Langston Hughes describes how he grew up in an integrated downtown Cleveland neighborhood in the early 20th century. That’s not how we think of downtown Cleveland today. But, as I said, we had the factory districts. The jobs were located in a central location, so the black and white workers had to live in roughly the same areas. But so, Langston Hughes describes how he grew up in an integrated downtown Cleveland neighborhood. He said his best friend in high school was Polish. He said he dated a Jewish girl in high school. It was an integrated high school in an integrated neighborhood. The Public Works Administration went into that neighborhood, demolished housing to build two separate projects, one for whites, one for African Americans, creating a pattern of segregation there that hadn’t previously existed. And it did this everywhere it went as did subsequent successor federal housing agencies and local housing agencies. So, I’ve mentioned now two big policies that the federal government followed. One was its public housing program. The other was its subsidization of suburbanization for whites only.
Eve: [00:11:58] Um hmm.
Richard: [00:11:58] And there were many, many other policies as well, followed by federal, state, local governments, all racially explicit, all of which interacted to create the segregated landscape that we now have in this country.
Eve: [00:12:11] So, are we trying to fix this now?
Richard: [00:12:16] No, we’re not. We’re not. There’s …
Eve: [00:12:19] Oh, that’s awful.
Richard: [00:12:19] Well, no, we’re not. We, to the extent that there’s any attention to this issue, it’s the attention to the condition of the low-income, segregated neighborhoods in which African-Americans are concentrated. Not all of them, but many of them. I’m not in any way suggesting we shouldn’t be paying attention to that and focusing on things like evictions and rent control and inadequate housing supply. But we are not paying any attention yet to the segregated nature of those communities or to the segregated nature of communities outside those low-income downtown areas where they’re segregated on an all white basis. But we need to pay attention to it. Our democracy, I think, is under great threat because of the extreme polarization we have in this country, political polarization that largely tracks racial lines. And I don’t think it’s conceivable that we can preserve this democracy in a healthy way if so many African Americans and whites live so far from each other that they can’t empathize with each other or understand each other’s life experiences. So, I think it’s urgent that we do pay attention to these racial boundaries, but we are not yet doing so.
Eve: [00:13:43] So, A couple of things that have been attempted have been like the Fair Housing Act and eradicating redlining. Have they have any impact at all on this polarization of the landscape?
Richard: [00:13:58] Well, of course, they’ve had a small impact. I mentioned Levittown earlier in our conversation, created as an all white suburb by the Federal Housing Administration in the post-World War II period. That community of 17,000 homes is now about one to two percent African American. The homes there now sell for 400, 500,000 dollars. There are African Americans who can afford to buy those homes at those prices. But the, Levittown is located in a neighborhood that is about 15 percent African American. So, the difference between that, the two percent that the Fair Housing Act, you know, was able to address and the 15 percent that you would expect if it were not for these policies of segregation, is the difference that the Fair Housing Act cannot address. Those homes, as I say, are now unaffordable to working class families of either race.
Eve: [00:14:58] What do you think it will take to correct this?
Richard: [00:15:01] Well, the policies to correct this are well known. No mystery about them. What’s missing is a new civil rights movement that’s going to be as aggressive in addressing residential segregation as the civil rights movement of the 1960s was in addressing public accommodations and interstate transportation and employment segregation. We don’t have that yet. We are, I will say, having a more accurate and passionate discussion in this country now about the legacies of slavery and Jim Crow than we ever have had before in American history. We had Black Lives Matter demonstrations this past summer and spring that engaged 25 million Americans, demonstrating for police reform, for community policing, for the demilitarization of the police. They didn’t address housing issues, neighborhood segregation, but out of that consciousness, it’s possible that a new civil rights movement will emerge that addresses the underlying causes of police abuse of African Americans, which are largely the fact that African Americans are so segregated in low-income neighborhoods and concentrated there. So, I’m hopeful, not confident, but I’m hopeful that such a new civil rights movement will emerge.
Eve: [00:16:28] And do you, do you know any organizations really actively working to correct the housing segregation issues, in particular?
Richard: [00:16:40] Well, there are many, many organizations doing, taking small steps, and being successful in taking small steps. It’s not that we’re not doing anything at all. But we don’t have a systematic attack on segregation. There are some communities that are beginning to look at their zoning ordinances and the way in which they function …
Eve: [00:17:08] Yeah.
Richard: [00:17:08] … to perpetuate this unconstitutional system of segregation. There are organizations that are sponsoring mobility programs for African Americans, giving African Americans who have housing subsidies, we call them Section Eight vouchers, giving them more opportunities to find rental units in the higher opportunity communities. There is some work being done, but we don’t have a systematic effort. I am involved now with a group of national civil rights leaders who are creating something they call the National Committee to Redress Racial Segregation. And it’s hoped that they will be able to launch that national committee in the near future. And the purpose of that National Committee would be to support and create local civil rights groups that will take the kind of action that’s necessary to make it uncomfortable to maintain these segregated patterns. But we’re not there yet.
Eve: [00:18:16] Yeah, I think for me, I mean, this is a lot to absorb and pretty shocking. How do you educate so many people? There’s this trickle down effect, right? So, every bank, every local community bank, that lends money to developers or home buyers or anyone like that has to really examine their practices very carefully. I know enough about what goes on in racially segregated neighborhoods and banking to know that that in itself is an enormous task to just educate everyone to behave differently.
Richard: [00:18:57] My perspective is that our focus should not be on educating banks and developers and insurance companies. Our goal should be to create local activists who will put pressure on those banks and insurance companies and developers, realtors, to behave differently. If this is not something that can happen from the top down any more than the civil rights victories of the 1960s came about because we educated restaurant owners or bus companies to behave differently. It happened because we have an activist civil rights movement to force them to act differently. And I think if we think of that as a model, we’ll be on a better path to understanding how we can have these changes. As I said, we’re having a more accurate and passionate discussion now about this in this country than we ever have had before. So, there’s the potential for creating such civil rights groups, but they haven’t emerged as of yet.
Eve: [00:20:05] Yeh, it’s a really big task. And one of the question for you. How do you deal with pushback, like that was only in past, or there are a few bad apples, or arguments like that in the face of what you’ve uncovered and what’s the truth?
Richard: [00:20:22] Well, we don’t have unlimited time today, but I did describe two big policies that the federal government followed, both in creating the suburbanization and in its public housing program to create the segregation. That wasn’t just a few bad apples. If we had more time, I could go through dozens and dozens of these policies at the federal, state and local level, all of which networked together to create this segregation. So, it was not a, it was not a few bad apples that that this. This was a systematic government policy. As I said, the segregation we have today is unconstitutional because it violated the Fifth and the Fourteenth Amendments to the Constitution when government enacted these policies.
Eve: [00:21:11] This is really fascinating, and I do hope that this new civil rights movement emerges, and I’d love to hear more. I’m going to be reading your book in great detail, and I hope all our listeners do as well. Thank you very much for your time.
Richard: [00:21:27] Thank you very much.
Eve: [00:21:36] That was Richard Rothstein. A history of housing segregation in the United States is a shocking one, and we will be grappling with the damage done for many decades to come. There is a glimmer of hope this year as more open and concrete dialogue emerges between blacks and whites. Richard’s hope is that activists will rise up to insist on change to propel change forward quickly, a national civil rights movement to ensure that we all get to reap the economic benefits of living in this rich and diverse country. You can find out more about impact real estate investing and access. The show notes for today’s episode at my website, EvePicker.com. While you’re there, sign up for my newsletter to find out more about how to make money in real estate while building better cities. Thank you so much for spending your time with me today. And thank you, Richard, for sharing your thoughts. We’ll talk again soon. But for now, this is Eve Picker signing off to go make some change.
Image courtesy of Richard Rothstein, EPI