Homeownership is a powerful force to building wealth in the United States. Yet research finds one startling conclusion: building wealth through homeownership in the United States was never devised for African Americans. Sadly, the historical snapshot of homeownership for African Americans in the United States is instead the long history of federal, state, and local policies used to establish and maintain residential segregation. The evidence of “de facto segregation (private practice)” and “de jure segregation (law and public policy)” in the City of Oakland, California unveils a systemically-engineered operation of racial discrimination in housing and racially divided communities. The deep-rooted residential segregation housing policies, such as zoning and redlining, were designed and used against African-American Oaklanders to exclude them from American’s legacy of wealth-capitalist-homeownership — the American Dream. A dream for White America.
The historical planning practices used to establish and maintain residential segregation was zoning, and disinvestment creating the urban ghetto — are evident and continue to thrive today. In a study on residential segregation, Douglass S. Massey and his colleagues have documented high levels of residential segregation in major metropolitan regions like in the United States. Successively, its damaging effects embodies a long-held reality that the mechanism used for segregation locked African Americans out of the prosperity ensued in The American Dream, homeownership.
Understanding the grim historical byproducts and outcomes of residential segregation is “a way to gain a larger sense of civil rights, the enforcement of the Fair housing Legislation law in pursue homeownership opportunities, which will be the vehicle to wealth building for African Americans in the United States,” said Floyd May, who built his career as a civil rights practitioner, was the former General Deputy Assistant Secretary of Housing and Urban Development (HUD), and founded the National Fair Housing Academy (NFHA).
Yet, historically, racial residential segregation is a product of an institutional mechanism of racism that was designed to protect whites from social interaction with blacks. May recounts how, at the age of five, he experienced a harsh reality of social interactions between African Americans and whites. “My dad worked for the railroad and called to ask my mother to bring the lunch to the roundhouse. I ran down the step and didn’t know what door to enter, one on the left or right. I opened the door to the left and there sat a room of white men in overalls, behind a long table with fluorescent light. They cursed me and ask what I wanted, and told me to get the hell out. I told them that I was looking for my daddy, and he said: “he is in there with those other color boys, and get the hell out.” I entered the door and there was my father sitting behind one card table with a 25-watt bulb. I immediately did not like it, and from there I began asking probative questions and began to understand discrimination and joined the NAACP.”
A Brief lesson on History of Residential Segregation in Oakland
In spite of the lives lost and sacrifices made in the fight for housing equality in America, our nation is still assembled and structured in combination with racism, as evidenced by an inequitable delineation of the black and white housing. The power of racism and the mechanism used to enforce it is directly linked to the shift from an agrarian society into an industrial society.
Early in the 20th century, the racial, social, economic, and political landscape of American cities changed. American cities turned into industrial centers, taking advantage of the railroad, port facilities, and the need for unskilled labor. The demand for workers in the industrial cities stimulated The Great Migration of thousands of blacks from southern racial oppressive states, who were looking for work, a better life, and housing.
Oakland expanded with automobile manufacturing facilities — Chevrolet and General Motors, the Durant Motors, the Durant Motor Company, and Caterpillar Tractor — and Del Monte fruit canning. The demand for workers during and after World I stimulated the migration of hundreds of thousands of southern blacks into industrial cities, including Oakland. According to the U.S. Bureau of the Census surveys, 1,770, African Americans lived in Oakland in 1944 and by 1950 the population numbered 42,355.
This massive increase in African-American population created a housing crisis, and racial tension, so urban planners devised zoning ordinances. Zoning ordinances are land-use policies that establish a hierarchy of uses. They are governed by urban strategists and local city councils. With the housing crisis identified, zoning ordinances were used as the main tools for creating and maintaining segregation of neighborhoods.
This was often successful because the federal government financed housing developments in the suburbs specifically for whites to partake in the American Dream. The American dream agenda was geared towards buildup wealth through ownership of land and single-family homes. These zoning ordinances led to discriminatory underwriting criteria in which loans were to be given to those that would not pose a threat to community harmony — and racial covenants identified Black and Jews. Ultimately, these ordinances were used to move our metropolitan regions towards segregation, keeping African Americans from being white families’ neighbors. These mechanisms also undermined the wealth building capabilities for African Americans in the United States.
For instance, in Oakland, these zoning ordinances were used loan practices and in propaganda to stimulate “white flight” — whites moving to the suburbs for fear of a decrease in property value. They also led to redlining in Federal Housing Authority mortgages, prohibiting returning African-American War veterans the opportunity to obtain GI loans for single-family homes in suburbs.
Angie Wilson Hajjem, housing discrimination testing coordinator of Eden Charity for Hope and Opportunity, explains, “After World War II, people were coming back from war to rebuild their lives. The government gave GI low-interest loans to military folks to get housing. They didn’t give it to the black people that were coming back from fighting. They didn’t give it to the black people living communities that needed housing. So we saw, you know back in the 40s, only white Americans able to access low-interest loans and buy homes. And you know I think that home ownership is such a critical way of building wealth in your family. And because so many black people and people of color didn’t have access to get the loan to buy homes, they were left out. They were [left] out of this whole wealth-building entity that homeownership brings. So it was discrimination that was embedded in our government you know with not loaning black people money. So it’s a horrible legacy that we have in this country. People don’t realize how institutional racism has impacted African Americans so drastically.”
Subsequently, these discriminatory practices set into motion a degenerative series of divestment in the urban interior, which created a social and economic environment that disenfranchised, impoverished, and marginalized people of color. Implicit in this is the fact that jobs moved out of central cities due to white flight.
In addition, the development of suburban communities during the two decades between 1930 and 1950 changed the demographics of cities. The new housing opportunities in suburban communities stimulated the mass exodus of whites from the cities. These new, all-white, suburban towns lured manufacturing jobs away from the inner city with cheap land and low taxes, leaving poor minority families and the increased tax burden behind. When minority families tried to pursue the housing opportunities in the suburbs, they found few affordable housing opportunities and often encountered government condoned racism which made relocation to the suburbs impossible. Prohibiting African Americans in these newly developed suburban communities, they were forced to reside in an urban core; economically, socially, politically, and environmentally disenfranchised. Massey and Denton (1993) Rothstein (2017, Krysan & Crowder (2017).
Floyd O. May acknowledges that these issues “still permeate in much of the fabric of our society today.” He says, “What we are witnessing in today’s marketplace in housing is very concerning when we have an administration who has made the decision to eliminate discrimination in its mission. It causes me great pain and great concern. But, fortunately, I believe in the law. And notwithstanding the current administration’s lack of will and desire to carry lack of their responsibility, I am encouraged and engaged with organizations and people who are not going to allow these decisions to go unchallenged. And with that in mind, I am on the National Housing Committee for NAACP, We are leveraging with other organizations to address our concerns about the departments and the government’s lack of will to address discrimination in housing. “
Patterns of residential segregation have been linked to homelessness, the concentration of persistent poverty, racial differences in household incomes, educational attainment, and the lack of homeownership opportunity, according to Massey and Denton (1993)
The Inequality of Homeownership for African Americans in the United States:
Historically, the inequality of homeownership for African Americans in the United States is the story of Dream Deferred. This has clearly impacted the current crisis and state of African American today, with home ownership, education, employment, and wealth lagging behind.
This year marks the 50th Anniversary of the Fair Housing Legislation, but discrimination in housing continues and homeownership still declines for African Americans. A recent study from the Urban Institute illustrates homeownership opportunities are dismal. The Urban Institute is asking, “What has happened to black homeownership?” It has “declined to levels not seen since the 1960s when private race-based discrimination was legal.” The authors say that, in the three decades following passage of the Fair Housing Act, black homeownership rose by almost 6 percentage points, reaching 47.3 percent. However, the rate dropped to 41.2 percent from 2000 to 2015.
Research continues to show that homeownership is the greatest asset in the American economy and a driving force to building wealth. According to the 2016 Survey of Consumer Finance, nationally, the primary residence represents the largest asset accounted on the balance sheet (as shown in Figure 1 below). At (24%), the primary residence accounted for about one-quarter of all assets held by households, surpassing business interest (20%) and retirement accounts (15%).
Not only does homeownership provide entry into the American Dream, it is the driving force for a better life, neighborhood, and community. “When you have a home that you buy, you are investing … in your schools, your social services, and the community at large. When you own you know that you have a piece of the pie. There’s something about home ownership—you’re emotionally tied to your community…Homeownership really allows for the neighbors to know each other. It allows a building of community and it allows for people to feel more connected. And when you don’t have the homeownership… it has a real impact on your family and your children and health, and everything that you do,” says Angie Watson-Hajjem.
It’s The Law: The Federal Fair Housing Act-Title VIII:
Housing discrimination and segregation are serious problems in this nation, and they are directly the impediments to wealth building for the African American. Disenfranchisement is deeply entrenched and continues to persist in our Nation’s urban cities. However, The Fair Housing Act is the federal law that addresses discriminatory practices and policies, promotes residential integration, and ensure that every neighborhood is a place of opportunity. It prohibits a wide range of discriminatory practices: the refusal to rent or sell housing on the basis of race or other prohibited status: discrimination in the terms of sale or rental (including requirements for deposits, down payment, or credit checks); discrimination in the advertising of housing sales or rentals: and discrimination in the terms of mortgagee or home improvement financing. It reads:
- Title VIII of the Civil Rights Act of 1968 (Fair Housing Act) prohibits discrimination in the sale, rental and financing of dwellings based on race, color, religion, sex or national origin. Title VIII was amended in 1988 (effective March 12, 1989) by the Fair Housing Amendments Act, which:
- expanded the coverage of the Fair Housing Act to prohibit discrimination based on disability or on familial status (presence of child under age of 18, and pregnant women); established new administrative enforcement mechanisms with HUD attorneys bringing actions before administrative law judges on behalf of victims of housing discrimination; and revised and expanded Justice Department jurisdiction to bring suit on behalf of victims in Federal district courts.
In light of the grim historical byproducts and outcomes of residential segregation, the Federal Fair Housing Act Title VIII is the law and the direct remedy from the federal government to eliminate the most blatant and historical discriminatory practices of racism in housing. This is the law that promotes a solution for African Americans in Oakland who are descendants of those who were unconstitutionally denied access to the affordable, assessable, or sustainable housing during the economic expansion for white America only.
Homeownership: Facing the Truths & Remedying the Past:
How do we redirect and remedy the past and attend to the future state of African-America? It is by facing the truths and remedying the past through reparations to African Americans who have been historically excluded from homeownership. Admittedly, I agree with Richard Rothstein, a research associate at the Economic Policy Institute and author of The Color of Law: A Forgotten History of How Our Government Segregated America. He writes, “Reparations are not meant for a one-time monetary distribution.” But rather, reparations for the dissemination of land, or subsidies whereby, African American are given a preference in the homeownership funding.
Given that my modus operandi is to protect and serve the remaining African-Americans homeowner in Oakland, I recommend reparation solutions geared towards correcting the constitutional violation with public subsidies for qualifying African American to purchase homes in any neighborhood of their choosing. A reparation housing policy might be doable with the Measure A1 funds. These same criteria can be given to renters as well. MeasureA1 bond funds the creation of permanently affordable rental housing, help moderate-income households afford home ownership and make existing housing for low-income seniors and people with disabilities safe and accessible. $460 million of the funding would create rental housing, and $120 million would go to support homeownership programs. Let’s consider adding to the measure native African Americans in Alameda County who are descendants of families who were directly affected by the unconstitutional federal, state, and local housing policies.
I recommend reparation solutions geared towards correcting the constitutional violation with public subsidies for qualifying African American to purchase homes in any neighborhood of their choosing. A reparation housing policy might be doable with the Measure A1 funds. These same criteria can be given to renters as well.
Alanna McCargo, vice president of the Housing Finance Policy Center at the Urban Institute, offers three solutions. First, she believes it is imperative that we reduce the loss of homeownership among African Americans who already own homes but risk losing them.
Second, she says we need to offer young African American (all Americans, really) a pathway from their teen years to their forties that includes a much more systematic effort to build financial health, including opportunities to get access to a decent mortgage when they’re ready to buy homes.
Third, she advises that we make supportive reforms that will stabilize and improve housing markets in communities where African Americans live. This includes assuring that rents are affordable enough to allow young people to save for a down payment and establish a good credit record, as well as investing in communities so that home values don’t decline further. This also includes reforms and enforcement to curtail corrupt and predatory practices that deliberately strip assets from African Americans.
Anne Price, president of the Insight Center for Community Economic Development, suggest that we need to look at the very low levels of homeownership rates among late Gen Xers and early millennials that are lagging behind previous generations. We cannot continue to rely on homeownership as the primary vehicle of wealth accumulation for blacks. Public-sector intervention is needed supports the proposal for young adult trusts (baby bonds), a program that is analogous to a Social Security plan that would provide substantial capital finance for young adults.
Homeownership is such a critical way of building wealth in your family. Because so many people of color didn’t have access to get the loan to buy homes, they were left out of this whole wealth building entity.
There is no limit to the creative ideas, recommendations, and strategies on this issue. An Emergent Attention is necessary and needed to the world as housing is a human basic right for survival on the planet earth, which is “just housing.”