The Lasting Effects of Segregated Housing

CHRISTIANE AMANPOUR, CHIEF INTERNATIONAL ANCHOR: And next, another look at how racial discrimination impacts American society, this time, in housing policy. Author Richard Rothstein believes that for generations unconstitutional laws have severely restricted the wealth and success of African Americans. In his latest book, “Just Action,” written with his daughter, Leah Rothstein, he explores how local communities can undo decades of neighborhood segregation. And they are joining Michel Martin to discuss their findings.

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MICHEL MARTIN, CONTRIBUTOR: Thanks, Christiane. Richard Rothstein, Leah Rothstein, thank you both so much for joining us.

LEAH ROTHSTEIN, CO-AUTHOR, “JUST ACTION”: Thank you for having us.

RICHARD ROTHSTEIN, CO-AUTHOR, “JUST ACTION”: Thank you.

MARTIN: All right, Mr. Rothstein, I’m going to start with you. Your last book, “The Color of Law,” you argue that housing segregation is, number one, deeply important. And number two, that it’s not accidental. You argue that this is really been a matter of law and custom in the United States for a very long time. As briefly as you can, would you describe why it’s so important and why you say it’s not accidental?

R. ROTHSTEIN: “The Color of Law,” my previous book, demolished the myth of the de facto segregation, something we all thought existed, the fact, as you said, that the fact that every metropolitan area is racially segregated happened either by accident or because of private discrimination or bigotry of single-family home owners who wouldn’t sell to African Americans, people (INAUDIBLE) the same race. It turns out that the reason we are segregated, we have an apartheid society. We are segregated by racially explicit federal state and local government policy. In the mid-20th century, somewhat before and somewhat after, that was unconstitutional, blatant constitutional violations. When the Federal Housing Administration and Veterans Administration decided to suburbanize the entire white working class and middle-class population into single-family homes and all white suburbs, the white families who were subsidized to do this — and these weren’t rich people, these were returning war veterans — the white families gained wealth because those homes appreciated in value over the next couple of generations. They used that wealth to send their children to college, they used it to take care of temporary emergencies, maybe unemployment. They used it to subsidize their retirements and they used it to bequeath wealth to their children and grandchildren. But then had down payments for their own homes. The result of the fact that African Americans were prohibited, by written federal policy, written federal policy, from participating in this subsidy program means that today, although African American incomes are about 60 percent of white incomes, African American wealth is only about 5 percent of white wealth. This wealth gap underlies the most serious social problems in this country today, it underlies the concentration of African Americans lower income communities where the schools are less well resourced, it underlines the fact that they have poorer health because they’re living in more polluted more dangerous communities, it even underlies the police violence that we’ve been spending so much time paying attention to in the last few years, because when you concentrate the most disadvantaged young men in single neighborhoods, it’s inevitable that they are going to be contradictions with the police. So, these unconstitutional policies underlie our apartheid system and they require us to remedy it.

MARTIN: So, Leah Rothstein, I want you to pick up the thread here. What — how does “Just Action” continue that conversation?

L. ROTHSTEIN: A lot of people who read “Color of Law,” myself included, and wanted to see my dad lecture about it, you know, were moved and just sort of overwhelmed by the comprehensive history laid out in how intentional it was in this — the creation of our segregated communities, and I asked him, after one of his lectures, you know, now that we are reawakened to this history, what do we do about it now? How can we begin to undo it and challenge these decades and decades of policies, the entrenched, you know, living patterns that we are so used to now? And so, he challenged me to help him answer that question, by writing this book. And in this book, we help answer that question for people all over the country looking for ways to take action and begin to redress segregation. And we really focus on local efforts, what can be done in our local communities. We understand that federal policy change will be necessary eventually, but we do not have the political will on the federal level to make these changes nationwide. But we can build that will in our local communities, and there’s actually a lot that’s under local control that can go a long way towards undoing segregation, challenging it and remedying the harms that have come from it.

MARTIN: Housing segregation just seems so big. I mean, people live in their houses, in some cases, you know, for 30 years, 50 years. It just seems so big. So, Leah, let me just start by asking you this, when you thought about this, geez, how do I — how do you tackle this? Did you find it daunting yourself?

L. ROTHSTEIN: You know, I did at the beginning. I have been a community organizer and activist, and I’ve worked in housing policies. So, I’ve worked on these issues a lot and I didn’t know how to fix this problem when I started this project with my dad. I was overwhelmed by just the enormity of the issue, and it’s right, you know, people live in the same place for a long time. The history my dad laid out shows us how, you know, the wealth gap between blacks and whites was created by housing policy. So, there’s just so much to undo. It did feel overwhelming and rather daunting. But in “Just Action,” we outlined dozens and dozens of policies and strategies that a local activist group could take on, to begin to redress segregation in their communities. And for every one of those policies, we give an example from a local community group somewhere in the country that’s working on this issue or has successfully implemented this policy change. So, I ended this project and writing this book feeling very hopeful, actually, that there’s a lot that can be done. It’s not one policy or one change that’s going to fix all of this, but it’s a lot of little pieces that will begin to undo different aspects of segregation, different segregation’s effects, but all of these small pieces together have a huge impact.

MARTIN: Mr. Rothstein, I’m going to ask you the same question. As you were researching this book, did you feel a sense of hope that this could be addressed?

R. ROTHSTEIN: Very hopeful, very hopeful. Because as long as we thought it happened by accident, it was easy to think it could only happen by accident. Once we understood that it was created by explicit public policy, explicit public policies can fix it. And as Leah said, there are so many local policies that sustain, reinforce and perpetuate segregation. It was created nationally, but its sustenance is local. If I can give you an example.

MARTIN: Yes, let’s hear it. Yes. I’d love to hear an example.

R. ROTHSTEIN: Eventually, every metropolitan area in this country, African American homeowners pay property tax at a higher rate than white homeowners do. So, African Americans are paying taxes at an assessed value close to the market value, and white homeowners are paying taxes far below the assessed market value. This is a purely local issue. But every one of the black homeowners in those communities is owed refunds for their excessive taxation. And activist groups could begin a campaign to win those refunds. They might not be totally successful, but they can make progress. And there are dozens and dozens of these kinds of programs and policies that exist in the local level that are accessible by local groups if they simply mobilize to take action to achieve them. And the reason we wrote this book is because, well, 20 million Americans participate in the Black Lives Matter demonstrations, in the aftermath of George Floyd’s murder. And most of them went home and they put signs on their lawns saying, black lives matter, and that was the end of it. But this is a base of support for a pretty large and significant civil rights movement of people who didn’t know what to do next. We say anything that you do, any one of these policies is a beginning and starts somewhere.

MARTIN: Leah, I’m going to direct this question to you. You write in the book a lot about policies and practices that are on their face race-neutral, but actually yield disparate results. Can you talk a little bit about that? I’m thinking maybe about credit scoring, for example.

L. ROTHSTEIN: Well, when we have an unequal society and you apply a race-neutral policy across the board to everybody, it’s going to have unequal effects. So, the example you brought up, credit scoring. So, a credit score system is a race-neutral policy, it’s not discriminatory in intent, but it is in effect and it is in effect because a credit score system is supposed to be an objective rating of your future likelihood of repaying a debt, and it bases that rating on your financial history, but it only uses a certain type of financial history to make that reading. And it’s a type of financial history that whites are far more likely to have than African Americans. So, if you’ve — if you’re applying for a mortgage and you’re looking at your credit score, and you have had a mortgage in the past, that will factor into your credit score. But if you’ve never owned a home in the past and you’ve been a renter your whole life, which African Americans applying for a mortgage are more likely to have never owned a home before, and even if you’ve never missed a rent payment in your life, that financial history is not factored into your credit score. So, as a result, African Americans are disadvantaged in the credit scoring system, which makes it harder for them to get a mortgage to buy their first home, and then harder for them to get a high enough credit score to get a good interest rate on that mortgage. So, the result that we see now is about a third of African Americans have no credit score at all, compared to about 17 percent of whites. And of those with credit scores, 20 percent of African Americans have a credit score high enough for a mortgage compared to over half of whites.

MARTIN: What would you say to people who would argue, well, that’s just common sense, I mean, people need a credit score, lenders should have some way of knowing whether you’re a good bet to lend money or not?

L. ROTHSTEIN: Well, we’re not advocating getting rid of credit scores. I think you are right. We need a credit score so a lender knows who to lend money to. But those credit scores can take into account rental payment history, just as easily as they can take into account mortgage payment history. And that would go a long way to equalizing that system and not having a disparate impact on African Americans, and local bank branches and credit unions can start to do that. Individually, even if the national credit scoring system isn’t adjusted yet, they can start factoring in rental payment history in order to determine someone’s credit worthiness, and that would go a long way to opening up access to credit for African Americans.

MARTIN: Richard, what are some of the solutions that you came across on the course of reporting this book that really stood out to you?

R. ROTHSTEIN: Well, we described so many solutions that it’s really just a question of where you start. In our book, “Just Action,” we have a photograph, actually two photographs, of community groups in — one in California and one in New York, that were picketing banks because it turned out that those banks were making mortgages to apartment developers, multi- unit apartments, and the mortgages penciled out only if those borrowers predicted a higher income stream than present rents would afford. In other words, the banks were being guaranteed that they would gentrify those buildings by evicting current tenants and charging higher rents. Well, community pressure can make sure, as those two demonstrations that we photographed in the book, can make sure that those banks don’t follow that policy, that they don’t subsidize gentrification in that way, by issuing mortgages to borrowers whose finances would only qualify them for a mortgage if they evicted present tenants and took in higher paying ones.

MARTIN: So, Richard, I take Leah’s point that, you know, a lot of these are local initiatives, but I am curious about your sense of whether there really is an appetite for these kinds of initiatives. Just given how it seems to kind of push these deep emotional buttons that people have about where they live, with whom they live, and how they live.

R. ROTHSTEIN: There’s an enormous appetite for this if people would learn what they can do and if they organize themselves, form committees, form biracial committees, in particular, to begin to address these issues. And we have many examples in “Just Action” of people who’ve actually started to do this. We can identify the banks, the realtors, the developers who created segregation under the aegis of the federal government, in people’s particular communities, and those banks, those realtors, those developers should be the subject of actions and campaigns to get them to contribute to the redress of the segregation that they created. So, I don’t fear that there’s no appetite for this. My previous book, as you mentioned, “The Color of Law,” you know, I don’t mean to boast, but it sold a million copies. We also have a regular column that we’re writing on Substack, and Leah, a few weeks ago, write a column — wrote a column about a very elite suburban community that organized because they want to diversity, they wanted to include other people in their community. They organized and they defeated a referendum in that community that would’ve prohibited modifying single-family zoning. So, if people organize, they can win successes. They won’t win successes all the time, sometimes they’ll be defeated. But small victories will lead to larger ones. And I’m confident that people take advantage with some of these ideas that we’ve thrown out will begin to see a cascading movement to redress segregation.

MARTIN: Why should people who have benefited from these systems want to change them?

L. ROTHSTEIN: Yes. Well, there’s a couple of reasons. This group that I wrote about, they started by learning about the history of their own community and how it came to be segregated. So, they developed a workshop that they did around their region based on “The Color of Law,” and applying it specifically to their city and identified the policies that created segregation in that region. And I think part of doing that, that kind of education, it opened up people’s eyes to what they thought was just normal, what they thought they were entitled to in that community was actually intentionally created by prohibiting African Americans and others from living there. And once they reconciled with that history, they realize that that’s not the kind of community that they wanted to live in. That they actually valued inclusion and they value diversity, and so they wanted to work towards that. So, that’s the basis of that group. And then, when they started working on this, defeating this ballot measure, they realized that, you know, the exclusivity of this community hurt them, hurt the people who live there as well. Their children couldn’t afford to move back home. The ballot measure was in response to some affordable housing for teachers that was proposed in a town because 30 percent of teachers in this town left their positions every year because they couldn’t afford to live anywhere near the schools that they taught in. Their favorite cafes were closing because service employees couldn’t find anywhere near there to live on a minimum wage salary. So, they saw how the exclusivity of their community and by keeping the home prices high, through maintaining single-family only zoning, was hurting them as well. And so, the values that they sort of developed and identified through learning about their history, along with the impacts that the affordable housing crisis and the exclusivity of their community were having on them personally helped them develop this really strong community group that defeated the ballot measure and are going on to work on housing policy in the future.

MARTIN: And, Richard, before we let you go, this work, again, really does focus on the experience, the historical experience, of African Americans in the United States and how that experience translates to today’s — to current, sort of, circumstances today, why is that focus on African Americans and why should people of different backgrounds, particularly Latino Americans, Latinx Americans, Asian Americans who perhaps arrived later on in this country care about this?

R. ROTHSTEIN: The reason they should care about this is because we are all Americans and our constitution was violated by the segregation of African Americans. The policies we described were focused on African Americans. It wasn’t the large Hispanic migration at the time that these policies were enacted. We have enormous economic inequality in this country today. There are many policies we need to follow that would benefit low income and moderate income, recent immigrants. That’s a different issue. It’s not a less important issue but it’s a different issue from our obligation to remedy the unconstitutional segregation of African Americans. The discrimination, the exclusion that black families have faced in this country was far more extreme, more violent, more oppressive than what was experienced by other groups, even though those other groups did experience discrimination as well. But they’re not comparable, and different problems require different solutions. What we say in our writing is that race specific crimes require race specific solutions. And, that’s the reason that we’re focusing this book on African Americans, it doesn’t mean that there are other problems in the society that also need to be addressed.

MARTIN: Richard Rothstein, Leah Rothstein, thank you both so much for talking with us today.

L. ROTHSTEIN: Thank you for having us.

R. ROTHSTEIN: Thank you.