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Public policy and the formation of residentially segregated cities

A conversation with Richard Rothstein

Inequality of opportunity appears stubbornly persistent across racial groups. For example, the racial gap in household labor income has not changed since the 1960s. I recently spoke with economist Dan O’Flaherty about the insights gained from research in the economics literature on why this is. As I considered differences in the types of educational opportunities and labor market networks that contribute to labor market outcomes, it became clear that residential segregation plays a significant role.

To learn more about how residential segregation happened in the United States, I spoke with Richard Rothstein. He is perhaps best known for the influential book he wrote on this topic, titled The Color of Law: A Forgotten History of How Our Government Segregated America. No stranger to the subject of inequality in education, Mr. Rothstein started writing on the topic when he was the national education columnist for The New York Times. He also wrote the books Class and Schools: Using Social, Economic, and Educational Reform to Close the Black–White Achievement Gap and Grading Education: Getting Accountability Right.

Mr. Rothstein told me about how his work on education led him to focus on residential segregation. As he was writing about educational inequality, he noticed that many problems in education could be traced back to residential segregation and the accompanying concentration of poverty in certain schools. As he started to investigate how our cities became segregated by race, he came across many instances in which government policies were not just neutral, but in fact actively pushing our cities toward residential segregation. For example, he told me about how the Federal Housing Administration subsidized the construction of neighborhoods that explicitly excluded Black Americans. He also told me about times when law enforcement did not protect citizens subjected to racially-motivated violence in response to their choice of neighborhood.

The following conversation has been edited and condensed. Listen to an extended version of this conversation.

One can see residential segregation as an education problem

Dionissi Aliprantis

I was wondering if you could just tell us a little bit about your background.  Personally, professionally, what led you to where you are today?

Richard Rothstein

Well, before I wrote The Color of Law, I was a policy writer, a journalist specializing mostly in the field of education. I was The New York Times’ education columnist for several years, with a weekly column. I wrote about education and education policy in the 1990s and early 2000s. We had a national education theory that said that the reason we had an achievement gap between Black and white children was because teachers had low expectations of Black children. They just didn't try very hard to educate them.

I understood that the reason that we have an achievement gap is not because of lazy teachers; of course, that's a very small part of the explanation. It's because so many African American children in particular, coming from urban neighborhoods come to school with social and economic challenges that impede their ability to learn.

And I remember writing one column about asthma. As you probably know in places like Cleveland, Chicago, other urban areas, African American children have asthma at a much higher rate than most middle-class children (of any race). In some measures, it's been four times the rate, it's an enormous difference. And if a child has asthma because they live in a more polluted neighborhood, because they have more trucks driving by their homes, more vermin in the environment, more dust, more peeling paint, that child is more likely than a child who doesn't, to be up at night wheezing and then come to school drowsy the next day.  And if you have two groups of children who are identical in every respect, same racial composition, same social economic background, same family structure, but one group has a higher rate of asthma, that group is going to have slightly lower achievement, simply because it's a drowsy group.

Now that doesn't make a big difference, but then you begin to think of all of the other challenges facing children from disadvantaged neighborhoods. Asthma is just one.  There is also lead poisoning, which has a measurable impact on IQ, and African American children are more likely to have lead poisoning than middle class white children because they live in buildings that are more likely to have peeling paint from many-generations’-prior paint jobs. Many urban neighborhoods still have water being delivered in lead pipes. Well, you begin to add up all of these things; lead poisoning, asthma, homelessness, economic and security, toxic stress from being exposed to violence. You add these all up and pretty soon you've explained the achievement gap. It doesn't leave much left to explain with low teacher expectations, lazy teachers.

And I realized that it's one thing if a child has asthma, or lead poisoning, or homelessness, or economic insecurity, or toxic stress. But it's another thing if you have a school where every child has one or more of these challenges. And we call those schools, "segregated schools." I realized that the schools are segregated because the neighborhoods in which they're located are segregated. School segregation today is more intense in this country than it has been any time in the last 45 years, because of neighborhood segregation. And that's why I began to think that neighborhood segregation was an educational problem. And that's really how I got into this.

Public policies generated neighborhoods that were segregated to the disadvantage of Black households

Dionissi Aliprantis

Your book, The Color of Law, provides a history of public policies leading to this kind of residential segregation. I'm wondering if you could describe some of the public policies that you found that are in the book and maybe some of their effects, whether on residential segregation or school segregation?

Richard Rothstein

Perhaps the biggest, and the one I regard as the most powerful policy that segregated this country, was a program (most active in the period immediately after World War II) of the Federal Housing Administration and the Veterans Administration to move the entire white working class, middle class population out the urban areas into single family homes in all-white suburbs. This was a racially explicit program. We were, as you may know, not a suburban country at that time. Both white and Black working class and middle-class families were living in urban areas. We were a manufacturing economy. Factories had to be located near deep water ports or railroad terminals to get their parts and to ship their final products. So if you had a factory district that employed both Black and white workers, they had to be able to walk to work, they didn't have automobiles in those days, maybe take short street car rides. But they had to live in broadly the same neighborhoods. Same thing with the middle-class workers who were working at the banks that serviced those manufacturing facilities and other service industries.

Well, the federal government began a program immediately after World War II (intensified it rather, it began it before then), to move the entire working and middle-class population, into single family homes in all-white suburbs.  As I say, this was a racially explicit program. It wasn't the action of rogue bureaucrats. The Federal Housing Administration had a manual called The Underwriting Manual, which was distributed to appraisers all over the country whose job it was to evaluate the applications of builders, developers who wanted to build one of these all-white suburbs. And the manual said explicitly that you couldn't approve an application for a federal bank guarantee of a developer or builder who is going to sell to African Americans.

The manual went so far as to say that you couldn't even recommend for a federal bank guarantee, a loan to a developer who was going to sell to only whites, but was going to locate this project near where African Americans were living, because the manual said, and I'm quoting, "That that would run the risk of infiltration by inharmonious racial groups." In the book, The Color of Law, I have a photograph of a six-foot high, half mile long concrete wall with a developer of an all-white project in Detroit area proposed to build; the developer would get a federal bank loan guarantee from the Federal Housing Administration only if he constructed a six foot high, half mile long concrete wall separating his project from a nearby African American neighborhood. So this was a racially explicit program, nothing unintentional about it. It wasn't the action of rogue bureaucrats, as I say.

Levittown, East of New York City, was the largest in this immediate post-World War II period; 17,000 homes in one place. No bank would be crazy enough to lend William Levitt the money to build 17,000 homes in a rural area when we weren't a suburban country, the banks thought nobody would want to buy these places. He had no buyers yet. No bank would lend them the money. The only way he could borrow the money was by going to the Federal Housing Administration and Veterans Administrations, submitting his plans for the project, making a commitment never to sell a home to an African American. The FHA and VA even required Levitt and builders all over the country, I don't want to imply that Levitt was any way unusual, builders all over the country to place a clause in the deed of every home prohibiting resale to African Americans or rental to African Americans.

Well, the reason I say that this is probably the most powerful of the policies was because unbeknownst to the FHA and VA at the time, unbeknownst to the white returning war veterans, working class families who bought those homes at the time, they appreciated in value enormously over the next couple of generations. Homes in Levittown, for example, and this is true of virtually every one of these developments that I've looked at, sold in the late 1940s for about $8,000 apiece. In today's inflation-adjusted money that's about $100,000. Twice national median income. Any working-class family, Black or white can afford to buy a home for twice national median income. African Americans had jobs in the postwar boom, they could easily afford to buy these homes.

Well, as you know, everywhere in the country, they no longer sell for $100,000.They sell for, 300, 400, $500,000, and some places, $1 million or more. The white families who bought these homes, not as a way of gaining wealth, but simply as a place to live, to have a suburban lifestyle that was advertised to them, gained this wealth from the appreciation in the value of their homes. They used the wealth that they gained, the equity that they gained in homes to send their children to college. They used it to finance their own retirements. They used it to take care of temporary emergencies, maybe a medical emergency or short-term unemployment. And they used it to bequeath wealth to their children and grandchildren, who then had down payments for their own homes. African Americans were prohibited by explicit federal policy from participating in this wealth generating program.

Rothstein: Violence was used to enforce segregation and government institutions did not protect citizens from that violence

Dionissi Aliprantis

One question that might arise is the question of how binding, or how powerful, or how strong was this policy? How strong were the obstacles to Black families wanting to move into one of these neighborhoods? I was wondering if you could speak a little bit to the role of violence in enforcing those neighborhood boundaries.

Richard Rothstein

You asked me earlier how I got into this topic, and I told you about my interest in education. Well, the real thing that provoked me once I understood that neighborhood segregation was the cause of our educational difficulties was in 2007. The Supreme Court evaluated programs of two school districts, Louisville, Kentucky, and Seattle, Washington that had very, very token school desegregation plans. They permitted parents to choose which school in the district their child would attend, but the choice of a parent wouldn't be honored if it was going to intensify the segregation of the school, and if it was not going to do so, the choice would be. So if you had an all-white or mostly-white school and both a Black and a white child applied for it, the Black child would be given some preference because it helped to desegregate the school.

Well, the Supreme Court evaluated this program, denounced it, said you couldn't do such a thing, said it was unconstitutional. The decision was written by Chief Justice John Roberts, who explained that the schools in Louisville and Seattle were segregated because the neighborhoods in which they were located were segregated, and then went on to say that those neighborhoods were segregated de facto, without any government involvement. Well, I read this decision in 2007. This is really what got me going on this. I read this decision, and I remembered something that happened at Louisville, Kentucky some years before. There was a white homeowner in one of these single-family homes in all white suburb called Shively. He had an African American friend living in the center city of Louisville. The African American friend was a decorated Navy veteran, had a wife and the child that he wanted to move to a single-family home, but nobody would sell him one.

So, the white homeowner bought a second home in Shively, and resold it to his African American friend. And when the African American family moved in, this gets to your question, an angry mob surrounded the home, protected by the police. They threw rocks through the windows. Police made no effort to stop it. Dynamite and fire-bombed the home. The police made no effort to stop it. But when this riot was all over, the state of Kentucky arrested, tried, convicted, and jailed with a 15 year sentence the white homeowner for sedition, for having sold a home to a Black family in a white neighborhood. This is not de facto segregation, this is a blatant 14th Amendment violation.1

And what I discovered as I began to look into it further, and this is the first thing I began to look into, is that there were hundreds of cases around the country of police-protected, sometimes even police-organized and -led, mob violence to drive African Americans out of homes that they had legitimately purchased or rented in previously all-white neighborhoods. And every one of these, it was a blatant 14th Amendment violation, where the police were involved in either protecting, leading, or organizing a violent mob. Every one of them was a constitutional violation and it happened all over the country.

The opinions expressed in this article are those of the participants and do not necessarily represent the views of the Federal Reserve Bank of Cleveland or the Board of Governors of the Federal Reserve System.

  1. Many cases related to racial segregation and discrimination have referred to the Equal Protection Clause of the Fourteenth Amendment. “The 14th Amendment granted citizenship to everyone born in the United States. It also banned states from limiting citizens' rights, depriving them of due process of law, or denying ‘any person . . . the equal protection of the laws.’ ” From Return to 1
Richard Rothstein

The Color of Law

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 the author of The Color of Law: A Forgotten History of How Our Government Segregated America, which recovers a forgotten history of how federal, state, and local policy explicitly segregated metropolitan areas nationwide, creating racially homogenous neighborhoods in patterns that violate the Constitution and require remediation. For several years he was the national education columnist for The New York Times. He is also the author of many other articles and books on race and education, including the books Class and Schools: Using Social, Economic and Educational Reform to Close the Black–White Achievement Gap and Grading Education: Getting Accountability Right. He is a graduate of Harvard University.

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