Outside the Box: Government policies segregated America, and we could harness that same force to reverse the damage


I am the author of a book, “The Color of Law,” that disproves the myth of de facto segregation. In truth, we are residentially segregated, not naturally or from private bigotry, but primarily by racially explicit policies of federal, state, and local governments designed to prevent African-Americans and whites from living as neighbors. These 20th-century policies were so powerful that they determine much of today’s residential, social, and economic inequality.

Because powerful government policy segregated us, racial boundaries violate the fifth, 13th, and 14th amendments. Our nation thus has a positive constitutional obligation to redress segregation with policies as intentional as those that segregated us.

We routinely excluded African-Americans from government benefits that propelled whites into the middle class.

The federal government made housing and homeownership critical to families’ economic stability and upward mobility. But we routinely excluded African-Americans from government benefits that propelled whites into the middle class.


Perhaps government’s most powerful unconstitutional policy was the Federal Housing Administration (FHA)’s guarantee of developers’ bank loans to suburbanize the city-dwelling white working class and returning World War II veterans into single-family homes in all-white communities, creating a white noose around Black city neighborhoods. The homes were affordable—about $100,000 of today’s dollars—to both Black and white veterans and urban residents who had jobs in the postwar boom. But African-Americans were prohibited by explicit policy from participating.

This was not done by rogue bureaucrats at the FHA or Veterans Administration, an agency that followed FHA policy. It was spelled out in the FHA’s Underwriting Manual, distributed to appraisers who evaluated builders’ applications. The manual said a proposal could not benefit from federal subsidy if it included African-Americans in a white project; the manual even required denial of loans for all-white projects located near where Black families lived, because that would “risk infiltration by inharmonious racial groups.”

The notion of de facto segregation is utter nonsense.

From Barron’s: How Inequality in Housing Contributes to the Growing Wealth Gap—and What Can Be Done

These inexpensive, federally subsidized, whites-only homes now sell for $300,000 to $400,000; in some areas $1 million or more. Whites gained wealth from equity appreciation and used it to send children to college, to finance short-term layoffs or medical treatment, to enhance retirement, and to bequeath wealth to children and grandchildren who then had down payments for their own homes.

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African-Americans were prohibited by explicit federal policy from doing the same.

The enormous disparity in wealth largely results from unconstitutional federal policy that we have an obligation to remedy, an obligation we have never embraced.

Today, Black family incomes are about 60% of white incomes—you would think Black wealth would also be about 60% of white wealth; households can save the same amounts from the same incomes—but in reality, Black wealth is only about 5% of white wealth. That enormous disparity between a 60% income ratio and a 5% wealth ratio largely results from unconstitutional federal policy that we have an obligation to remedy, one we have never embraced.

Public housing

Another federal policy to segregate us was public housing, something we now think is for the poor. But it began in the New Deal for families who remained employed and could pay full rent; government built it to meet a housing shortage, but did not subsidize it. Yet government segregated it, creating separate projects for whites and African-Americans, frequently segregating previously integrated neighborhoods.

The great African-American poet, novelist and playwright Langston Hughes, wrote in his autobiography that he lived in an integrated downtown Cleveland neighborhood; in high school his best friend was Polish and he dated a Jewish girl—it was an integrated school in an integrated neighborhood. But the Public Works Administration cleared part of it to build separate projects, one for whites, one for African-Americans, creating segregation where it hadn’t existed.

This policy was followed nationwide, creating segregated patterns that persist today. It was only after whites were subsidized to leave public housing for all-white suburbs that public housing became almost all Black. When industrial jobs disappeared from cities, residents no longer had access to good jobs and required subsidies.

Contemporary land use has been layered atop an infrastructure created by decades of racially discriminatory policies.

Failure to remedy these injustices has created multiple crises: Homeownership is out of reach for many, renters are overburdened by costs, wages are inadequate for housing costs in many cities, affordable public housing is scarce, and housing infrastructure is neglected. These issues remain at the core of our nation’s inequality.

Bold federal action to ensure equal opportunity in homeownership and affordable housing is long overdue. This body can ensure that our housing infrastructure finally reflects the nondiscriminatory and inclusive vision of the Fair Housing Act.

Richard Rothstein, a Distinguished Fellow of the Economic Policy Institute and a senior fellow, emeritus, of the NAACP Legal Defense and Educational Fund (LDF), gave this opening statement before the U.S. Senate Committee on Banking, Housing, and Urban Affairs’ hearing on the “Legacy of Racial Discrimination in Housing,” on behalf of himself and Sherrilyn Ifill, president and director-counsel of the LDF. Here is a link to the full testimony.

This commentary was originally published by the Economic Policy Institute—Powerful government policy segregated us; the same can desegregate us, says Color of Law author Richard Rothstein

More insights on housing and race

Pedro Nicolcaci da Costa: Black millennials less likely to own a home than their grandparents were at same age

Rex Nutting: Privileges of race and class perpetuate inequality, limiting America’s potential

And finally, Blacks lack wealth today because of racism in the past

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