Book Review - "The Color of Law" - Part 1

My decompression from the election has given me a chance to get back to reading and hopefully writing. This week I resumed reading a book given to me by a friend, The Color of Law, by Richard Rothstein and decided it was certainly worth an extended post.

Rothstein’s thesis is captured by the book’s subtitle “A Forgotten History of How Our Government Segregated America”. Rothstein argues that the national, state and local governments throughout the country (the vast majority of his examples are from areas outside the South) created a segregated society in the US, starting with the end of Reconstruction and down through the 1960s.

The resulting division of American society is thus almost entirely due to de jure segregation and not a product of individual choice, that is de facto segregation. The ramifications of this conclusion for public policy are immense. It puts to rest the arguments of conservatives that the government has no business actively dismantling segregation or legislating reparations for past injustices to the African American (and other minority) communities.

Rothstein begins by dissecting, with “surgical precision”, 20^th Century housing policy in the US. For example, he traces the development of public housing during the New Deal and WW II. In many cases, legally segregated public house projects built under the Public Works Administration, replaced urban communities that had been integrated. Even during WW II, temporary housing for war workers was either segregated or for whites only, resulting in African American workers living in overcrowded inner-city slums. Following the war, the Truman administration, bowing to pressure from Southern Democrats, rejected amendments to the 1949 Housing Act that would have prohibited segregation and discrimination in public housing.

But by that time the die was also cast in terms of the private housing sector. In the post WW II era, zoning laws, although no longer explicitly “race biased”, had effectively segregated most urban areas and excluded most black families from middle class suburbs. With origins going back to WW I and extending into the Depression, WW II and beyond, a new form of exclusion came into play. Policies adopted by government agencies, the Home Owner’s Loan Corporation (HOLC), the Fair Housing Administration (FHA) and the Veterans’ Administration (VA), under the general rubric of “red-lining”, denied approval of low-down payment, low interest mortgages for African Americans and to developments that failed to explicitly exclude blacks. Thus, in the 1950s and 60s, the “American Dream” of owning a home of your own in the suburbs was, by government action, guaranteed to remain for whites only. Even middle-class blacks were, for the most part, confined (sic) to urban ghettos.

Rothstein also looks at how the courts willingly enforced restrictive covenants, which were written into deeds, preventing the sale or rental of properties to any but members if the Caucasian race. He documents how FHA policies directly contributed to “white flight” and how local governments used their power to prevent developers who planned to open their developments to African Americans. Furthermore, to shift “African Americans away from downtown business districts so that white commuters, shoppers and business elites would not be exposed to black people”, slum clearance projects were developed. By tearing down African American residential areas and failing to rebuild them with new, affordable housing, these projects furthered the impoverishment of blacks and reinforced segregation.

Rothstein also focuses on the failure of the local and state government to protect blacks who, during the 1950s and 60s moved into previously all white neighborhoods, from racist violence. He further documents how federal, state and local policies suppressed the incomes of African Americans, thus preventing them from being able to accumulate enough money to make down payments on a house. The benefits of Social Security, minimum wage protections and union recognition excluded occupations where African Americans and other minorities predominated. Under the New Deal and during WW II, discrimination against black workers was rampant, even when it was technically illegal. Confined to low wage classifications, blacks had little opportunity to move into middle class neighborhoods, even after fair housing laws were passed.

The author concludes his analysis by comparing efforts to end racial discrimination in several different areas of society. In some cases, such as public accommodations, it is possible to overturn discrimination by addressing the future – that is, requiring non-discrimination is an adequate remedy. In these aspects of society, there is no “structural legacy” (although I think the author may overstate the case) that continues to affect opportunity once the laws are passed and effectively implemented. Not so for housing segregation (and I would argue for school segregation, since the latter is based on housing segregation). Housing segregation requires affirmative actions to undo the history of de jure segregation!

For several reasons, race neutral policies do not offer real remedies with regard to housing segregation. Among them are the lack of social mobility which has become more pronounced since the 1960s; general economic decline in areas where African Americans live which; the lack of educational opportunity due to underfunded schools in segregated areas with large African American populations (inner cities and rural areas); tax code benefits to white homeowners which did not accrue to black renters; and so on.

The past continues to replicate itself in the barriers to home ownership for African Americans. The incredible medium wealth gap between white and blacks (more than 10 to 1 and growing) is largely a consequence of the lack of opportunity to accumulate “home equity” resulting from segregation. Note that home equity represents about 2/3rds of wealth for middle class families. Race neutral policies will do nothing to overcome this legacy of segregation and often end up exacerbating it.

As the author points out, blacks, as a result of de jure segregation, missed out on the great middle-class prosperity of the 1950s and 60s, when white families were “moving on up”. And the situation continues to get worse. The subprime lending crash of 2008 disproportionally affected minority home owners, and if current trends continue, median black family wealth may well approach $0 in a few decades.

The $64.000 question remains. How can we fix this? The author has some suggestions. More on that in my next post.