July 01, 2014

What Have We—De Facto Racial Isolation or De Jure Segregation?

by Richard Rothstein

School failure by African- American youth remains an important impediment to narrowing social and economic inequality. Years of school reform efforts have done little to narrow the black-white achievement gap, especially for the most disadvantaged black students. Partly it’s because low-income African Americans have individual characteristics that interfere with learning—with less-educated parents, they come to school already behind expected literacy levels; in unstable housing, they often switch schools, losing instructional continuity; having less access to museums, zoos, art and music lessons, organized sports, and out-of-neighborhood travel, they lack background knowledge on which successful learning builds; in poorer health, they have more school absences and suffer from greater environmental assaults—lead poisoning, for example—that depress cognitive ability.

These problems are exacerbated when disadvantaged children are concentrated in the same schools: remediation then becomes the norm; high mobility rates require reconstitution of entire classes; and stressed children act out more in neighborhoods with more violence, diverting classroom time from instruction to discipline. Where few parents are college-educated, few are successful community role models, and parents themselves are less able to press for curricular improvements.

Disadvantaged student isolation is increasing. The most recent data available show that the share of black students attending schools that are more than 90 percent minority has grown from 34 percent in 1991 to 39 percent in 2011. In 1991, black students typically attended schools where 35 percent of students were white; by 2011, it had fallen to 28 percent. In 1988, black students typically attended schools where 43 percent of students were low income; by 2006, it had risen to 59 percent.

Substantial progress in narrowing achievement gaps is inconceivable if African Americans continue to attend racially and economically homogeneous schools.

But in 2007, the Supreme Court made integration extraordinarily more difficult. Parents Involved in Community Schools v. Seattle School District No. 1, 551 U.S. 701 (2007). Louisville (Kentucky) and Seattle (Washington) had made modest integration efforts by limiting families’ school choices where they would increase racial imbalance. Chief Justice John Roberts’ plurality opinion deemed such consideration of race in pupil assignment programs impermissible. Schools were racially imbalanced, he wrote, because they were located in racially homogeneous neighborhoods that were de facto, not de jure segregated. Housing patterns might result from “societal discrimination,” but discrimination “not traceable to [government’s] own actions” can never justify remedies employing racial student classifications. “The distinction between segregation by state action and racial imbalance caused by other factors has been central to our jurisprudence. . . . ‘Where [racial imbalance] is a product not of state action but of private choices, it does not have constitutional implications.’”

In dissent Justice Stephen Breyer agreed with Roberts’ distinction, mostly accepting that neighborhood racial homogeneity was de facto, so schools were not required to desegregate. He proposed, however, that districts may voluntarily address de facto segregation, even if it’s not constitutionally required.

Both Roberts and Breyer misunderstood how neighborhoods in Louisville, Seattle, and all metropolitan areas came to be segregated. State action played not a minor, but the major role, more influential than “societal discrimination” or “private choices.” Equally important, effects of state action endure today, so neighborhoods, and in consequence schools, should properly be considered de jure segregated, even by the Court’s narrow definition. This argument has rarely been forcefully presented to the courts, partly because the history of state-sponsored segregation has been forgotten, even suppressed.

During the Franklin D. Roosevelt, Truman, and Eisenhower administrations, public housing programs purposely and self-consciously concentrated African Americans in urban ghettos, while federal housing finance programs purposely and self-consciously created whites-only suburbs.

Civilian public housing began during the New Deal. Harold Ickes, director of the Public Works Administration, established a “neighborhood composition rule” that public housing should preserve the racial composition of neighborhoods where it was placed. Because many urban neighborhoods then housed both black and white (mostly immigrant) low-income families, the rule resulted in placing all-black projects in neighborhoods that were only predominantly black, further concentrating the black population. White projects were placed in predominantly white neighborhoods. Some projects were integrated only by designating separate buildings for whites and blacks. See, e.g., Arnold Hirsch, Making the Second Ghetto 14 (Univ. of Chicago Press 1998).

During World War II, the federal government constructed numerous segregated projects for workers in defense plants. In a few cases where local authorities proposed integrated projects, the federal government (frequently the Navy) overruled them. See, e.g., Robert C. Weaver, The Negro Ghetto 167 (Russell & Russell 1948).

Segregation got another big boost from the 1949 Housing Act, responsible for the massive towers that subsequently deteriorated into ghettos of crime, violence, and drug dealing. Conservative Republicans opposed to any public role in private housing markets devised a strategy to defeat President Truman’s plan—a “poison pill” amendment prohibiting segregation in public housing. They knew that adoption of the amendment would lead Southern segregationists (Democrats) to defeat public housing altogether. Liberals, led by Senators Paul Douglas and Hubert Humphrey, worked to defeat the ban on segregation. They succeeded, the Housing Act passed with both Northern and Southern Democratic support, and local housing authorities nationwide were given federal sanction to segregate their projects, which they did. Richard O. Davies, Housing Reform During the Truman Administration 108 (Univ. of Missouri Press 1966).

In 1984, investigative reporters from the Dallas Morning News visited federally funded projects in 47 cities nationwide, finding that the nation’s nearly 10 million public housing residents were almost always segregated by race and that every white-occupied project had superior facilities, amenities, services, and maintenance to black-occupied projects. Craig Flournoy & George Rodrigue, Separate and Unequal: Illegal Segregation Pervades Nation’s Subsidized Housing, Dallas Morning News, Feb. 10, 1985.

A few federal lawsuits challenged this segregation (for example, Hills v. Gautreaux, 425 U.S. 284 (1976), in Chicago; Thompson v. U.S. Department of Housing & Urban Development, 348 F. Supp. 2d 398 (D. Md. 2005), in Baltimore), but remedies were inadequate to undo the metropolitan segregation they addressed.

After World War II, housing shortages eased and material was freed for postwar civilian purposes, and the federal government subsidized relocation of whites from cities to suburbs and prohibited similar relocation of blacks. This was not implicit, not mere “disparate impact,” but racially explicit policy. The Federal Housing Administration (FHA) and Veterans Administration (VA) recruited mass-production builders to construct East Coast suburbs like the Levittowns in Long Island, Pennsylvania, New Jersey, and Delaware; West Coast suburbs like Lakewood and Panorama City in the Los Angeles area, Westlake (Daly City) south of San Francisco, and in numerous metropolises in between. These builders received federal loan guarantees on explicit condition that no sales be made to blacks and that individual deeds include restrictive covenants prohibiting resales to blacks, or to what the FHA described as an “incompatible racial element.” Kenneth T. Jackson, Crabgrass Frontier 236–38 (Oxford Univ. Press 1985); see Urban Planning and the African American Community: In the Shadows 282–84 (June Manning Thomas & Marsha Ritzdorf eds., Sage Publications 1997) (FHA underwriting manual excerpt).

It was systematic and nationwide. A survey of 300 subdivisions developed from 1935 to 1947 in the suburban New York counties of Queens, Nassau, and Westchester found that 83 percent of those with 75 or more units (almost all had obtained advance FHA construction guarantees) had racially restrictive covenants. Deeds typically included language like this: “Whereas the Federal Housing Administration requires that the existing mortgages on the said premises be subject and subordinated to the said restrictions . . .” John P. Dean, Only Caucasian: A Study of Race Covenants, 23 J. Land & Pub. Util. Econ. 428 (Nov. 1947).

Following World War II, Stanford University recruited the renowned novelist Wallace Stegner to teach. Unable to find housing, he helped organize a 400-family cooperative to purchase a large tract adjoining the campus. The co-op hired architects and builders, but construction had barely begun when it found that FHA guarantees would be denied because three African-American families were members. Faced with expelling these members or disbanding the co-op, Stegner and other leaders chose the latter. The tract was then resold to a private developer who constructed homes with FHA-guaranteed mortgages and deeds prohibiting sales to African Americans. Hallis Friend & Nancy Lund, Ladera Lore (Maureen Hamner, Grubb & Ellis Real Estate 1989) (1974).

In other ways, open and subtle, state action imposed racial segregation on metropolitan areas. Its constitutionality was rarely, if ever, challenged. For example, quite aside from FHA requirements, federally and state-chartered banks and thrifts systematically “redlined” their mortgage policies, refusing to issue loans to black homebuyers in white neighborhoods and even to black homebuyers in black neighborhoods, the latter contributing to the deterioration of ghettos into slums. This was not merely “private discrimination”—these financial institutions were, and are, the most heavily regulated and supervised of private enterprises. Federal and state regulators supervise and approve loan policies in great detail.

Yet in 1961, when the U.S. Commission on Civil Rights challenged regulators about their support for redlining, Comptroller of the Currency Ray Gidney responded, “Our office does not maintain any policy regarding racial discrimination in the making of real estate loans by national banks.” The Federal Deposit Insurance Corporation’s chairman Earl Cocke said banks under his supervision should deny loans to African Americans because white homeowners’ property values might fall if they had black neighbors. And Federal Reserve Board Chairman William McChesney Martin stated that “neither the Federal Reserve nor any other bank supervisory agency has—or should have—authority to compel officers and directors of any bank to make any loan against their judgment.” Martin explained that regulators should only prohibit unsound loans, not require nondiscriminatory approval of sound loans. If a black family is denied a loan because of race, Martin smugly asserted that “forces of competition” will ensure another bank will make the loan. U.S. Comm’n on Civil Rights, Book 4. Housing 42–51 (Gov’t Printing Office 1961).

With his authority over all banks in the Federal Reserve System, and with virtually all similarly discriminating, Martin surely knew (or should have known) that his claim was patently false.

There is no space to describe them here, but many other federal, state, and local policies explicitly enforced 20th century neighborhood segregation. Is this mere history? Do effects of these policies endure? Are they powerful enough to support a conclusion that Chief Justice Roberts’ (and Justice Breyer’s) assumption of de facto segregation is flat out wrong?

Consider Levittown, Long Island, the all-white suburb created some 65 years ago by the FHA and VA. The government guaranteed construction loans for Levitt & Sons, which then sold houses to whites for $7,000, about two and a half times the national median family income. White veterans could get VA loans with no down payments. Today, these homes typically sell for $400,000, about seven times the median income, and mortgages typically require 20 percent down. Although African Americans are now permitted to purchase in Levittown, it has become unaffordable for working-class families. By 2010 Levittown, in a metropolitan region with a large black population, remained less than 1 percent black. White Levittowners benefited from a half century of equity appreciation, gaining wealth enabling their children, and their children’s children, to attend college and join the middle class. African Americans denied access to this and similar communities are less likely to be able to do so. Nationwide, black median family income is now about 60 percent of that of whites, but black median family wealth is an astonishingly low 5 percent of that of whites. To a considerable extent, this is the ongoing consequence of de jure segregation.

It is not surprising that justices are so uninformed about origins of residential segregation, and even that litigants have been afraid to press for its acknowledgment. We suffer from collective amnesia about racial history, comforting ourselves that Jim Crow was restricted to Southern states with blunt racial legislation. The amnesia will get worse because we are failing properly to teach the young.

Elementary and secondary school curricula typically ignore or, worse, misstate this story. For example, in over 1,200 pages of McDougal Littell’s widely used high school textbook The Americans, a single paragraph is devoted to 20th century “Discrimination in the North.” It devotes one passive-voice sentence to residential segregation, stating that “African Americans found themselves forced into segregated neighborhoods,” with no further explanation of who did the forcing, and how. Other history textbooks are equally obtuse.

For the public and policymakers, relearning our racial history should be the foundation for understanding that aggressive policies to desegregate metropolitan areas, and thus schools, are not only desirable, but constitutionally obligated.

Richard Rothstein

Richard Rothstein is a research associate of the Economic Policy Institute and senior fellow of the Chief Justice Earl Warren Institute on Law and Social Policy, University of California (Berkeley) School of Law. Comments or queries should be sent to riroth@epi.org. Previous articles on this and related themes (including more extended documentation) can be found at http://www.epi.org/people/richard-rothstein.