One of the sources of racism as well as one of the consequences of racism is segregation between the races. Segregation has served a purpose to keep the races apart (and I will not even start to lay out the reasons why that was advantageous to one of the races under discussion.) It has in some domaines been institutionalized de jure by the administration and nowhere is that more visible than when you look at Housing Acts.

The Color of Law, a book by Richard Rothstein, a former columnist for the New York Times and a research associate at the Economic Policy Institute, as well as a Fellow at the Thurgood Marshall Institute of the NAACP Legal Defense Fund, documents the evidence that government not merely ignored discriminatory practices in the residential sphere, but promoted them. Here is a strong voice, telling us about racism in politics.

If you have an hour, listen to the conversation between Rothstein and Ta-Nehisi Coats on the topic. Time well spent.

Otherwise, here are the highlights of the argument (basically borrowed from here. )

Already existing housing segregation inherent to the New Deal’s housing projects were made worse by a 1934 Federal Government policy called redlining (the term comes from the colors used to map out where racial divisions ran in any given area – red for Blacks.) It concerned a refusal to insure mortgages in or near African-American neighborhoods. The FHA was also subsidizing builders who were mass-producing entire subdivisions for whites — with the requirement that none of the homes be sold to African-Americans. The rationale? If African-Americans would buy property in white areas, property value would sink and thus loans would be at risk.

The FHA actually had an Underwriting Manual which explicitly said: “Incompatible racial groups should not be permitted to live in the same communities.” It recommended that walls should be built to divide neighborhoods, that highways or rivers would be a good way for separating them. Many neighborhoods legally prevented anyone but a white person to acquire property.

The wealth differential between white Americans and African-American – the latter own about 5% of what the former own – can be economically traced back to the equity in homes that was available for the former and not the latter. This was implicitly acknowledged in the Fair Housing Act that was finally passed in 1968, now giving the right to African-Americans to buy property in any neighborhood they wished. One small problem: none of the housing in the neighborhoods they were always excluded from was within financial reach at this point, with housing prices in those neighborhoods going through the roof.

All this is in my head because of the news that Raj Chetty, an economist in Seattle, believes there is a way to improve the situation. Here is an experiment by his research group, together with the Seattle Housing Authority and the King County Housing Authority. Noting that people who received housing assistance (Section 8 vouchers, essentially a rent subsidy) stayed in their usual neighborhood instead of seeking housing in neighborhoods with more opportunities, particularly for their children with good schools etc. they offered the following:

 “A random subset of people receiving vouchers for the first time would get more than just the rental subsidy. They would also be given information on which neighborhoods promise the most opportunity for their kids, based on the research data. They’d also be assigned “navigators” whose job it was to walk them through the apartment application process, and receive additional financial assistance with down payments if necessary. “

A year later: the additional support raised the share of families moving to high-opportunity neighborhoods from 14 percent to 54 percent. 

Let’s be clear: this is a large effect, and it means potentially a better life for those random families who were assigned this role in the experiment. It is, however, NOT dealing with the systemic issues underlying the decay of poor neighborhoods and the exponential improvement in wealthier ones. Until we are willing to deal with the economics (and politics) of segregation, social science interventions will be just a drop in the bucket. But knowing that some seem to work is a good start.

Photographs today are from Seattle, where the intervention took place.

And one of Seattle’s own with Red House