Economic apartheid lives on in America

Almost lost in the wave of responses to the Supreme Court decisions last week upholding the Affordable Care Act and allowing gay Americans to marry was the significance of the court’s decision on housing discrimination.

In a 5-4 ruling, the court found that the Fair Housing Act of 1968 requires plaintiffs to show only that the effect of a policy is discriminatory, not that defendants intended to discriminate.

The decision is important to the fight against economic apartheid in America – racial segregation on a much larger geographic scale than ever before.

The decision is likely to affect everything from bank- lending practices whose effect is to harm low-income, non-white borrowers to zoning laws that favor higher-income white home buyers.

First, some background. Americans are segregating ever more by income in terms of where we live. Thirty years ago, most cities contained a broad spectrum of residents from wealthy to poor. Today, entire cities are mostly rich (San Francisco, San Diego, Seattle) or mostly impoverished (Detroit, Baltimore, Philadelphia).

Because a disproportionate number of the nation’s poor are black or Latino, we’re experiencing far more segregation geographically. Which is why, for example, black students are more isolated today than they were 40 years ago.


According to a new study by Stanford researchers, even many middle-income black families remain in poor neighborhoods with low-quality schools, few parks and playgrounds, high crime, and inadequate public transportation. To some extent, this is a matter of choice. Many people prefer to live among others who resemble them racially and ethnically.

But some of this is due to housing discrimination. For example, a 2013 study by the Department of Housing and Urban Development found that realtors often show black families fewer properties than white families possessing nearly the same income and wealth.

The income gap between poor minority communities and middle-class white communities continues to widen. While the recovery has boosted housing prices overall, it hasn’t boosted them in poor communities.

That’s partly because bank loan officers are now more reluctant to issue mortgages on homes in poor neighborhoods – not because lenders intend to discriminate but because they see greater risks of falling housing values and foreclosures.

But this reluctance is a self-fulfilling prophecy. It has reduced demand for homes in such areas, resulting in more foreclosures and higher rates of vacant and deteriorating homes. The result: further declines in home prices.

Adding to the downward spiral is the fiscal reality that lower housing values mean less revenue from local property taxes. This, in turn, contributes to worsening schools, fewer police officers and junkier infrastructure – accelerating the downward slide.

All of which explains why housing prices in poor neighborhoods remain about 13 percent below where they were before the recession, according to the real-estate information firm CoreLogic, even though prices in many upscale neighborhoods have fully rebounded.

The toxic mixture of housing discrimination, racial segregation over wide swathes of metropolitan areas, and low wages and few jobs in such places, will continue to have long-term ill effects.

Tribune Content Agency

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