Segregation

The Rising Costs for America

James H. Carr, Nandinee K. Kutty, James H. Carr, Nandinee K. Kutty

• Publisher: Routledge
• Year: 2008
• ISBN:
  9781135889784
• Edition: 1
• Topic: Business
• Subtopic: Real Estate
• Index: Business

Segregation: The Rising Costs for America documents how discriminatory practices in the housing markets through most of the past century, and that continue today, have produced extreme levels of residential segregation that result in significant disparities in access to good jobs, quality education, homeownership attainment and asset accumulation between minority and non-minority households.

The book also demonstrates how problems facing minority communities are increasingly important to the nation's long-term economic vitality and global competitiveness as a whole. Solutions to the challenges facing the nation in creating a more equitable society are not beyond our ability to design or implement, and it is in the interest of all Americans to support programs aimed at creating a more just society.

The book is uniquely valuable to students in the social sciences and public policy, as well as to policy makers, and city planners.

CHAPTER 1
The New Imperative for Equality

JAMES H. CARR & NANDINEE K. KUTTY

The grave problem facing us is the problem of economic deprivation, with the syndrome of bad housing and poor education and improper health facilities all surrounding this basic problem.

(The Reverend Dr. Martin Luther King, Jr.
in an interview one week before his death in 1968)

The link between access to decent housing and the attainment of economic and social mobility has been known for decades. Access to quality schools, good jobs, healthy and safe environments, supportive social networks, and accumulation of housing wealth are all influenced by the ability to secure housing in neighborhoods of opportunity and choice (Katz, 2004). Denial of access to housing is arguably the single most powerful tool to undermine and marginalize the upward mobility of people. A series of mechanisms directly intended to restrict the housing choice of minority households, beginning in the late 1800s and continuing throughout most of the twentieth century, largely explain the severe wealth disparities in America by race/ ethnicity. They also largely explain the seemingly intractable concentrated poverty faced by a disproportionate share of African American, Latino, and Native American populations. Failure to honestly acknowledge and address this unfortunate, but nevertheless real, past, and its consequences, will increasingly present major economic and social challenges for the nation’s future.

Unequal treatment of minorities in the housing markets includes providing them with incomplete or misleading information about available housing units on the market, providing them with inaccurate information about the quality of neighborhoods and local schools, giving them inferior and unnecessarily costly access to mortgage credit, and other unequal costs or terms. These biased practices directly limit housing options for home-seekers, in direct contravention of the law. Moreover, it relegates them, unnecessarily, to severely disadvantaged housing conditions with the attendant problems of poor schools, unsafe streets, limited access to jobs, stifled housing equity accumulation, and concentrated poverty. In the end, housing discrimination artificially limits individuals from achieving their full potential as contributing members of society, stifles human achievement, creates unnecessary social program dependencies, and breeds dysfunctional behavior. It promotes an unproductive and divisive political environment along race, ethnic, and class lines. In short, housing discrimination is counterproductive to the national interest.

As the share of America’s minority populations grows relative to the total U.S. population, failure to address lingering and significant roadblocks to economic mobility for minority households presents increasing challenges for the nation as a whole. Issues ranging from the United States’ economic status in an increasingly competitive global economy to the solvency of Social Security and Medicare are affected as the nation’s population of financially disadvantaged households.

By the middle of this century, today’s minorities will constitute half of the U.S. population—and that fast-growing population is disproportionately impoverished, ill-housed, poorly educated, and tenuously linked to labor markets. The first major step toward seriously addressing the substantial barriers to economic and social mobility for minority households is to eliminate disparate treatment from the housing markets. By taking that single step, hundreds of thousands, if not millions, of households who are ready and prepared to succeed in the competitive marketplace will not be stymied by the continued artificial barrier of illegal discrimination.

This chapter addresses the many challenges and obstacles faced by minority households in achieving economic and social mobility. Five key points are discussed:

• America’s wealth disparities along race and ethnic lines, as well as the disproportionate concentrated poverty among minority households, are largely the result of decades of public policies intended to economically marginalize minority households.

• The severe levels of concentrated poverty, segregation, and isolation resulting from those policies have created a complex web of socioeconomic challenges that defy piecemeal and uncoordinated intervention. The problems are growing. As these problems grow, they increasingly take on grave significance for the nation beyond the sole issue of social justice.

• Housing is the centerpiece of opportunity. Successful housing-based strategies will help overcome barriers to economic mobility, and will thus create positive outcomes that go well beyond just providing affordable shelter.

• The millions of members of minority groups who today find themselves outside the mainstream of opportunities in America are a valuable human resource that is increasingly costly to neglect.

• Successful interventions are not beyond our ability to understand, design, and implement.

At the outset, it is important to point out that this book focuses most significantly on the experiences of African Americans. This focus is not intended to suggest that African Americans are the only or the most important group to experience significant denial of opportunity in America. To the contrary, the book recognizes that every racial and ethnic minority group in the United States has experienced its unique history of prejudice, discrimination, and denial of opportunities. Documenting injustices to each group would justify a book in itself (Lui et al., 2006). Focusing on each group’s experiences and histories is a useful way to understand the problems and propose successful public policy interventions. While it is true that many antidiscrimination policies have great applicability across minority groups, focusing on each group’s unique challenges is also essential. Finally, to the extent that many contemporary opportunity gaps for Latinos in the United States mirror those of African Americans, several challenges applicable to that population are also addressed.

The Role of Public Policies in the Creation of Inequality

Policies and Programs Impacting Housing Choice and Access to Finance

The hypersegregation and isolation that characterize a majority of African American communities in the United States are a twentieth century phenomenon—not the direct extension of slavery. In the late 1800s and early 1900s, African Americans and whites lived in close physical proximity to one another in both the North and the South; middle-class and upper-class African Americans in northern cities often lived as neighbors to whites of similar economic class and professional status. As neighbors and within professional classes, blacks and whites maintained easy interactions with each other.

In fact, only a short period after the Emancipation Proclamation of 1863, African Americans had achieved a measure of success in resettling their lives. They were farming land, acquiring property, establishing trades and businesses, building or buying houses, getting educated, working in jobs for wages, and raising their families. They were on their way to acquiring economic and political power. They had the right to vote, and they became involved in the political process not only as voters but also as governmental representatives at the local, state, and national levels. It may be surprising to some readers to know that in the 1870s the newly enfranchised voters of South Carolina voted for enough African American representatives to provide African Americans with a majority in the state assembly (Library of Congress, 2002).

Figure 1.1 Black segregation on the rise: northern U.S. cities

Source: Data points are from Douglas S. Massey, “Origins of Economic Disparities: The Historical Role of Housing Segregation,” Chapter 2 of this book.

Notes: “Indices of black isolation” refers to the percentage of blacks in the ward of the average black citizen. The isolation index measures the extent to which blacks live within neighborhoods that are predominantly black. A value of 100 percent indicates complete ghettoization and means that all blacks live in totally black areas; a value under 50 percent means that blacks are more likely to have whites than blacks as neighbors.

Values have not been estimated where exact figures were not found.

African Americans were becoming educated at a rapid rate at the end of the nineteenth century. While only a small proportion of African Americans had been literate at the end of the Civil War (state laws had forbidden literacy for the enslaved), by the turn of the twentieth century the majority of all African Americans were literate (Library of Congress, 2002). But this remarkable progress was stalled and tragically reversed with a series of private actions, reinforced and institutionalized by public laws, judicial mandates, and regulatory guidelines.

Programs and practices that systematically harmed minority households and communities included the use of restrictive housing covenants that limited housing location for minorities; a wide range of discriminatory practices by real estate professionals that further marginalized housing choice for African Americans; lack of government redress against violence to minorities who sought to move out of their segregated communities; biased underwriting policies of the Home Owners Loan Corporation (HOLC), the

Figure 1.2 Black segregation on the rise: southern U.S. cities

Source: Data points are from Douglas S. Massey, “Origins of Economic Disparities: The Historical Role of Housing Segregation,” Chapter 2 of this book.

Notes: The index of dissimilarity represented here as “Indices of black–white segregation” gives the percentage of blacks who would have to move to achieve an “even” residential pattern—one where every neighborhood replicates the racial composition of the city.

Values have not been estimated where exact figures were not found.

Federal Housing Administration (FHA), and Veterans Administration (VA) that further limited minority locational choice, as well as undermined the value of properties in minority communities; urban renewal programs that targeted the destruction of minority communities in several U.S. cities; forced relocation of African American families to isolated, unsafe, and poorly constructed high-rise public housing projects; and inferior treatment of minorities in the GI Bill, New Deal programs, and other public housing assistance efforts.

These policies and practices related to housing and other economic areas, as well as the general national climate in which these policies and practices thrived, explain much of the present state of disadvantage faced by millions of American families.

One of the earliest and most important blows to the civil rights of African Americans after the abolishment of slavery came in the form of the 1896 Plessy v. Ferguson U.S. Supreme Court decision, which upheld the right of states to require segregation and ruled that segregation did not violate the Thirteenth Amendment of the U.S. Constitution. This decision upheld and established the doctrine of “separate but equal” and viewed the segregation of races as merely a matter of social policy; it asserted that segregation did not imply inequality. In reality, however, segregated facilities such as public schools, parks, swimming pools and other recreation facilities, cafés and restaurants, public facilities, and seating in transportation were systematically and significantly unequal in quality; minority facilities were rarely if ever even close to the same level of quality. The 1896 Plessy decision marked a significant turning point after which all levels of government passed further segregation laws and expanded segregation practices.

By 1900, all Deep South states had passed legislation and enforced social behaviors instituting segregation and the subordination of African Americans by whites (Jaynes, forthcoming). Under these laws, which came to be known as “Jim Crow” laws, African Americans were denied the right to vote through poll taxes, unfair literacy tests, and physical and economic ...