The Color of Law

Were African Americans given opportunities for upward mobility in the service-sector?

No- African Americans were restricted to menial jobs with no opportunities for higher position or a higher paying job.

Why is sales tax more burdensome for lower-income consumers?

Disparate impacts are unavoidable but to minimize the impacts by exempting grocery purchases from sales tax can elevate some costs to lower-income consumers.

Why weren't FHA insured mortgages issued to African Americans?

Due to economic zoning practices- "it rendered African Americans ineligible for mortgages because banks and the FHA considered the existence of nearby rooming houses, commercial development, or industry to create risk to the property value of single-family areas".

How did Black neighborhoods turn into slums?

The area's zoning code changed from residential to industrial if African American families had begun to move into it.

What presidential administration approved the implementation of segregation in government offices?

Woodrow Wilson 1913- set national tone of acceptance of segregation polices

Can an assessor undermine the 'tax fairness'?

Yes, by using the different percentages of market value in different communities

Installment plans

no equity is accumulated from down or monthly payments

Goal of the PWA

to alleviate a national housing shortage while creating jobs in construction

Blockbusting

A process by which real estate agents convince white property owners to sell their houses at low prices because of fear that persons of color will soon move into the neighborhood. Then resold houses to African Americans at higher price. This worked because of economics of supply and demand and fear mongering that whats had.

What institutions were complicit and contributed to and reinforced metro segregation?

- IRS: willingness to grant tax-exemptions to churches, hospitals, universities, neighborhood associations etc.. that promoted segregation - Insurance companies - Banks and Savings institutions

How did the fed gov't impose racial segregation in areas without preexisting racial problems?

- segregated housing by race -example: california with defense workers and public housing development

Blockbusting tactics

-African American women hired to push strollers through white neighborhoods -African Americans hired to drive through white neighborhoods with loud music -Advertisements in black newspapers to attract buyers to walk around targeted blockbusting neighborhoods.

Buchanan v. Warley (1917)

-African American's attempt to purchase property on an integrated block where there were already two black and eight white households. Ruled that racial zoning ordinances interfered with the right of a property owner to sell to whomever he pleased. -A way around this Buchanan ruling was to use racial zoning to designate where blacks and whites could live.

Why did homes under contract sales agreements deteriorate?

-African Americans struggle to make inflated monthly payments -Often no time to upkeep home while working more than one job. -Apartments were subdivided by a speculator and charged the tenants high rents

What government institutions were involved in promoting and enforcing restrictive covenants?

-Courts - 1926 ruling that upheld exclusionary zoning and upheld restrictive covenants. Stating that they were voluntary private contracts, not state action. Courts across the nation ordered African Americans evicted from homes they have purchased. -Federal a 1928 review assured planners that racial clauses were legal because they required only private action in which the government wasn't involved. Acknowledging that government intervention in segregation would violate the constitution -FHA Manual if the home were covered by an exclusionary zoning ordinance it would probably deserve a high rating. The FHA recommended that deeds to properties must include an explicit prohibition of resale to Blacks if they wanted mortgage insurance. In addition, if developers wanted to receive construction loans it must include racially restrictive covenants in their subdivision property deeds.

At what governmental level were policies implemented to isolate white families into an all-white urban neighborhood?

-Local Level- with racial segregation ordinances. -First city to adopt racial zoning 1910: Baltimore

What are the implications of contract sales agreements and deteriorated neighborhoods?

-Overcrowded neighborhoods and schools -African American families unable to leave the neighborhood because they risk losing their home and defaulting on installment plans

How do we understand the income and wealth gap that persists between African Americans and whites without examining policies that purposely kept black incomes low throughout most of the 20th century?

-The explanation for de facto segregation is that most families couldn't afford to live in predominately white neighborhoods and that African American isolation reflects their low socioeconomic status, not de jure segregation. -Need to understand that once these policies were implemented the economic differences became self-perpetuating.

What are the two faces of zoning according to Richard Rothstein?

-To evade the prohibition on racial explicit zoning by attempting to keep Blacks out of white neighborhoods making it difficult for low-income families to live in expensive white neighborhoods. This contributed to the establishment of predominately white suburbs. -Attempt to protect white neighborhoods from deteriorating by ensuring industrial or environmentally unsafe businesses could locate in them. This contributed to the creation of black slums and ghettos with deteriorating conditions.

Tactics used to ensure that African Americans would be able to purchase properties (because unable to under FHA insured mortgages)

-installment plans -contract sales agreements

Housing shortage post WW2 was addressed. Enact a segregated housing program or have no housing program?

-politics of integration vs. segregation -efforts on part of Truman Administration to add legislation to the housing bill to prohibit segregation -conservatives were anti-integration and opposed gov't involvement in the private housing market.

What remedies to segregation does Rothstein propose?

1. Addressing African American middle-class suburbs as well as low-income. 2. Ban on zoning ordinances that prohibit multifamily housing or that require all single-family homes in a neighborhood to be built on large lots with high minimum requirements for square footage. 3. Amendment to the tax code- deny the mortgage interest deduction to property owners in suburbs that do not have or are not taking aggressive steps to attract their fair share of low and moderate-income housing 4. "Fair share requirements" based on income not race (example NJ and MA implemented) by addressing the isolation of low-income families in urban areas and their absence from middle-class suburbs. 5. Inclusionary Zoning

How did tax rates impact African American families?

1. Higher property taxes that homeowners paid 2. Contribution to the deterioration of their neighborhoods, because after taxes they had no money left for maintenance. 3. Led to loss of homes as speculators were permitted to pay off delinquent tax liabilities, seized the property, evicted the owners, and resold the property and an enormous profit.

What do developers prefer tax credit programs in low-income neighborhoods and what are the implications?

1. Land is cheaper 2. Easy to market new apartments to renters in the immediate vicinity 3. Less political opposition to additional housing for minorities and low-income families 4. However, these conditions ensure that tax credit projects will have a disparate impact on blacks, reinforcing neighborhood segregation (¾ of tax credits nationwide were placed in neighborhoods where poverty rates were at least 20%)

What programs deepened racial segregation?

1. Low-income housing tax credit: subsidizes developers whose multiunit projects are available to low-income families. 2. Housing choices voucher- Section 8: subsidizes families' rental payments so they can lease housing that they would not otherwise be able to afford.

Why is Rothstein hesitant to suggest desegregation policies?

1. The remedies of desegregation policies "are inconceivable as long as citizens, no matter their political view, continue to accept the myth of de facto segregation." 2. But a start could be addressing: employment policies, a minimum wage that returns to historical level and keeps up with inflation, transportation infrastructure improvements that improve access to jobs.

G.I. Bill, 1944

1. blocked/denied mortgage subsidies to African Americans 2. Restricted training/education to lower-level jobs for African Americans who qualified to acquire greater skills 3. servicemen not eligible for GI benefits if they were dishonorable discharged (African Americans received discharges at twice the rate of whites)

Legal actions against banks and mortgage companies

1. countrywide mortgage company- gov't alleged that statistical relationship between race and mortgage terms were so extreme that top bank officials must've been aware of racial motivation 2. WellsFargo, Memphis, TN- employees referred to subprime loans as 'ghetto loans' and supervisors instructed staff to market and target solicitation to African American zipcodes 3. Cleveland 2008 sued # of subprime lenders- Bank of America, Citicorp, WellsFargo. Lawsuit alleged institutions shouldn't have marketed any subprime loans in Clevelands depressed black neighborhoods b/c lenders knew that high poverty, unemployment rates, and flat property values in those communities would preclude borrowers from capturing sufficient appreciation to afford the higher adjustable rates they faced.

According to Rothstein, why is segregation hard to undo?

1. intergenerational economic status 2. wealth gap is too large between blacks and whites 3. waited too long to fix what is broken 4. de jure policies of segregation ensured whites would more likely be homeowners and blacks as renters. The federal tax code on mortgage interest deduction only benefited owners, not renters. 5. Fed, state, and local programs reinforced residential segregation- using tax credits to develop in already segregated neighborhoods rather than integrated neighborhoods.

Elements of the slave system after Emancipation perpetrated by the government against African Americans:

1. sharecropping 2. arrested for petty and phony offenses- faced with fines and court fees 3. convict leasing

What are the challenges of addressing de jure segregation?

1.African Americans face more than segregation but also income stagnation, blocked mobility 2. Whites are fearful of competition and rejection of policies, historically, to integrate society. 3. Segregation can give whites an unrealistic belief in their own superiority leading to poorer performances if they feel less need to challenge themselves. 4. Segregation perpetuates itself and continues to exist making it harder to reverse.

What federal administrations were responsible for refusing to issue mortgages to African Americans in designated white neighborhoods and to whites that sold to African Americans?

FHA and VA

What was the FHA's biggest impact on segregation?

Financed entire subdivision developments as racially exclusive enclaves. Example- Levittown entirely publicly assisted and could not sell to Black families under the conditions of receiving federal funds.

subprime mortgage loans

High-interest-rate loans to home buyers with above-average credit risk.

How do homeowners qualify for insured mortgages?

Homes must be appraised but the standards of approval were inherently racist through redlining practices

What are the impacts of section 8 housing vouchers on low-income families?

In most states, landlords can legally refuse to rent to tenants who use housing vouchers. Families receiving vouchers may find the only way to take advantage of it is to move to a neighborhood that is even more segregated than where they used to live.

What occupations did the FDR new deal policies exclude?

Occupations that blacks predominated: Agriculture and services. Social security, minimum wage protections, and recognition of labor unions were not provided to African Americans Under: Relief Program 1933 and the National Recovery Administration policies

Housing Act of 1949

Permitted local housing authorities to continue to design separate public projects for Blacks and whites or to segregate within projects

Fair Housing Act of 1968

Prohibited discrimination concerning the sale, rental, and financing of housing based on race

What were the consequences of the Housing Act (1949) on African Americans?

Removed from mainstream society and packed into high-rise ghettos where community life was impossible because there was no access to jobs and social services.

What are economic zoning techniques?

Reserving middle-class neighborhoods for single-family homes that lower-income families of all races could not afford. This would prevent future multi-family, commercial, or mixed-use development.

Redlining

To assess the risk of the homes before purchasing mortgages the HOLC needed to assess the condition of houses and neighborhoods to know if it would maintain its value. Color-coded the maps. Green is safe. Red is the riskiest. Some neighborhoods were coded red even if there was only one black household.

Shelley v. Kraemer (1948)

United States Supreme Court case holding that the State-Action Doctrine includes the enforcement of private contracts, the Equal Protection Clause prohibits racially-restrictive housing covenants, and that such covenants are unenforceable in court.

Primary purpose of public housing

develop housing for civilians on military bases and residences for defense workers near shipyards

Argument for racially segregated housing developments

enhanced property values

"reverse redlining"

excessive marketing of exploitative loans in African American communities

Covenants

form of contracts among owners in a neighborhood where neighbors could sue if an African American family made a purchase

How did homeowners and developers get around the 1917 Buchanan ruling?

inclusion of language in home deeds that forbade the resale to non-whites

JFK 1962 executive order

prohibited the use of federal funds to support racial discrimination in housing

Contract Sales Agreements

provided that ownership would transfer to the purchaser after 15-20 years but if a single monthly payment was late, the speculator could evict the would-be homeowner who accumulated no equity. The inflated sale price ensured that payments would be late.

Homeowners Loan Corporation (HOLC)

purchased existing mortgages that were subject to imminent foreclosure and then issued mortgages with repayment schedules up to 15 years and had relatively low-interest rates.

Texas Department of Housing and Community Affairs v. Inclusive Communities Project, Inc. 2015

ruled that a disproportionate placement of subsidized housing in neighborhoods that had been segregated by past government policy could violate the Fair Housing Act- even if the placement was not intended to intensify segregation. But, the opinion by Justice Kennedy: allowed for the placing of subsidized units to support the revitalization of deteriorating neighborhoods could also be legitimate.

Objective of Color of Law

segregation is not de facto. It s de jure segregation- engineered by public policy