The Color of Law: A Forgotten History of How Our Government Segregated America
by Richard Rothstein

Activists in the U.S. are in great debt to Michelle Alexander’s The New Jim Crow. It confirmed that mass incarceration and policing practices were not accidental or incidental, but systemic. Rebellions against race-based oppression in Ferguson or Baltimore have been rooted in America’s system of injustice, but also in the deeper issue of racial segregation. Richard Rothstein’s The Color of Law explains how housing became so highly racially segregated in America, and details the partnership between federal and local governments and the big developers in this process.

When we think of cities such as Chicago, Detroit, New York or Boston, these are often characterized by a South-side or a West-side that is almost entirely populated by black residents. Even the smallest towns have segregated black communities. These neighborhoods are usually the poorest communities in a city and often the most starved of public investment. Rothstein asks if this is a result of natural choices made by people to avoid one another, or if race segregation in housing is by design and systemic.

In the Trump era, Ben Carson, head of Housing and Urban Development (HUD), proposed in March to eliminate the phrase “free from discrimination” from the Agency’s mission statement. In Carson’s view the 1968 Fair Housing Act was a form of  social engineering to diversify housing that has failed and should be undone. Rothstein takes us back even further to the 1868 post-civil war 14th Amendment, which banned race discrimination in property ownership, to show the racist role that government and business have played in undercutting progressive gains.

Rothstein studies America’s reception to the the three great waves of northern migration of African Americans from the South. The first wave came after the progressive Reconstruction Period ended and Jim Crow was introduced; the second during World War I when 600,000 moved north; and the final large wave came during World War II when four million African Americans followed the demand for jobs created by the war.

During the first wave, racial segregation in the north was less common. Tenement city housing was often racially mixed. Langston Hughes, the great left wing poet, for instance, grew up in a mixed race building in Cleveland, and went to a mixed-race high school. The subsequent waves of African Americans from the south fared less well in Cleveland, where the New Deal federal government replaced Hughes’ old neighborhood with two public housing projects, one for whites, one for blacks, ending the previous integration.

Public Housing Explicitly Segregated

The two world wars saw the federal government step into building housing for arms factory and shipbuilding workers. During World War I, the federal government built its first public housing: 170,000 units across America. They were all designated  “whites only.” The Great Depression led to more public housing developments to create work and to ameliorate the housing shortage that the market had failed to fill. All this public housing was racially segregated due to federal guidelines.

Roosevelt’s Secretary of Interior, Harold Ickes established the “neighborhood composition rule” which as Rothstein explains, provided that public housing “projects in white areas could only house white tenants, those in African American areas could house only African American tenants.” This segregation rule would later be supplemented by more specific and sometimes more difficult to see racist guidelines.

During the World War II the federal government and private enterprise worked together to create housing close to the war industries and co-operated in ensuring that this housing was racially segregated. In the shipbuilding hub of Richmond, California, the local population grew four-fold to 100,000 during the war. The federal government built 24,000 units of housing, all segregated. After the war, as the whites-only suburbs were developed, whites were encouraged to leave Richmond and African Americans were left behind in public housing projects with few resources.

President Truman’s 1949 Housing Act, aimed at clearing slums, explicitly forbade integrated housing in the federal housing projects that aimed to replace the old housing. While separate but equal was ruled unconstitutional in education in 1954, housing segregation remained untouched by any serious legal challenges. This was during the period when the Supreme Court also refused to overturn bans on mixed race marriages.

Racist City Planning

San Francisco City Council recently renamed Justin Hermann Plaza originally named after its chief city planner in the 1960s. The 1960s redevelopment is now seen as enforcing a policy of racist displacement in the city. This was part of a national policy in the post war period that combined the building of freeways to connect suburbs and cities with the breaking up African American communities. In Los Angeles, the Santa Monica freeway in 1954 destroyed the city’s most prosperous black middle class area, Sugar Hill.

Alongside federal laws and rules that shaped segregation, local authorities enacted policies to further enable housing divisiveness. School boards would open and close schools to suit the segregation plans of city planners. Hospitals and churches that served one racial group were encouraged to operate in those neighborhoods it targeted, while getting tax free status from the IRS. The police looked away when crosses were burnt on lawns. The courts refused to challenge police terror in poor neighborhoods. Later, drug law enforcement was carried out ruthlessly against African Americans in the inner cities and largely ignored in the white suburbs.

Politically, both Democrats and Republicans worked to undermine racial integration and unity. In the 1945 mayoral election in Detroit, the racially mixed United Auto Workers Union ran a candidate against the auto industry candidate. The UAW candidate lost the election with the Republican candidate distributing fliers to deliberately whip up fears of integration among the white population.

Throughout the first half of the twentieth century, northern cities began passed zoning ordinances that banned black people from buying homes in specific neighborhoods and essentially encouraged a proliferation of liquor stores and polluting industries in or next to black neighborhoods. This strengthened the ghettoization of black neighborhoods. Home values in black neighborhoods plummeted, while non-black, less polluted neighborhoods becoming more attractive. Into this mix, big business newspapers, media and education systems, sometimes covertly, sometimes openly, engaged in promoting the demonization of black neighborhoods.

Home Ownership

“Terrified by the 1917 Russian Revolution,” Rothstein explains, “government officials came to believe that communism could be defeated in the United States by getting as many white Americans as possible to become homeowners – the idea being that those who owned property would be invested in the capitalist system.” The federal government produced two million posters pushing home ownership as a patriotic duty and bosses posted them in workplaces across the nation. This campaign was explicitly aimed at the white working class and excluding African Americans and immigrants of color.

The big developers, with government support, set up the Better Homes in America organization in 1921. This organization targeted those living in urban tenement buildings, which were quite often racially integrated, to buy single family homes in new neighborhoods that would “avoid racial strife.” Future Presidents Hoover and Roosevelt and Vice President Calvin Coolidge, at different times, all sat on the Better Homes Executive Board. It designed the process of suburbanization of American cities that began in the 1920s, was temporarily cut across by the Great Depression, but rose again on a gigantic scale after World War II.

To increase home ownership, President Roosevelt established the Home Owners Loan Corporation in 1933. The HOLC created color coded maps of the U.S. Red areas were designated high risk for loans, and green were low risk. The maps were entirely race-based. Black neighborhoods or even white neighborhoods too close to black neighborhoods were red-lined. The government established the Underwriting Manual, which spoke of “inharmonious racial or nationality groups” and determined who and how people could get a federally insured home loan, which concretely shaped race segregation. Ironically red-lining would later be used in the 2000s, in reverse, to sell subprime loans to African American families attempting to buy homes, which eventually led to a massive eradication of the value of wealth in the black community.

Suburbanization and Black Exclusion

The huge expansion of the suburbs was carried out with the full support and funding of federal and local governments, and was deliberately designed to exclude black families. Black families were not only turned away by illegal whites-only signs, but they were refused federal insurance in applying for mortgages. Explicit language in home deeds banned them from ownership and even banned those homes from ever being sold to African Americans. Suburbanization, particularly in the 1950s and 1960s absolutely cemented racial segregation in the North.

The timing of this, during the post-war economic boom was absolutely critical. While the vast majority of the working class saw its living standards raised by the postwar boom, especially those with union jobs, buying a home in a stable neighborhood was key to future economic stability. African Americans, by being locked out of the post-war wave of suburban home ownership, were left behind in the rental market unable to establish equity, the main form of savings and economic security for most working class people. Rothstein refers to this as the “suppressed income” of black communities.

From the mid-’70s, as real wages stagnated and fell, large numbers of non-black workers were able to potentially inherit their parents’ homes, while most young black people were not. Today’s housing-based wealth divide continues to grow, where black families’ average wealth equals only 10% of white families’ average wealth.

The suburbs were good for capitalism in many ways. They increased consumerism, car ownership and strengthened the sense of individualism. The suburbs also were built to fortify racial segregation and strengthen the power of the bosses to rule over a divided working class.

The huge civil rights movement forced the federal government to step back from its policies of promoting segregation in housing. However, the worst damage in housing segregation had been done.

Undoing racial segregation in housing is far more complicated than allowing people the right to vote, allowing people to sit where they want on a bus or in a restaurant, or to apply for a job. The integration of America’s highly segregated neighborhoods, as Rothstein argues, cannot be carried out by small reforms, it will require a huge mobilization of resources and a revolutionary political will on the scale of the period of Reconstruction after the Civil War.

Resistance to Segregation

Rothstein explains that this process of segregation was opposed by some liberals and  by some labor unions. Without a political party of the working class, the resistance was often sporadic and isolated and it was far easier for capitalist politicians to win support for segregationist policies by stoking people’s fears

Rothstein describes a group of 150 families, who organized a housing co-op in Palo Alto California, and bought a 260-acre ranch in 1947. They planned to build homes on the land. The FHA refused to insure their loans until they excluded the three African American families in their Association. Exhausted after three years of legal battles they sold the land to a private developer and the co-op collapsed. African Americans were barred from buying homes in the new housing development, Larada, which is now a super wealthy neighborhood near Stanford University.

In 1955, in Milpitas, California, the United Auto Workers Union at the Ford plant attempted to invest in developing racially integrated housing for its racially integrated workforce. “Although the union membership was overwhelmingly white” Rothstein writes, “the union adopted a policy that it would support only developers who would commit to integrated housing.” But the union faced city after city that refused to allow the construction of racially integrated housing. Increasingly cornered by racist lenders, developers and government, the union asked its members to vote on whether it should build two developments: one for blacks, one for whites. The union, while overwhelmingly white, adopted a policy that it wanted integrated housing for the workforce.

The Federal Housing Authority refused to back any loan to the project. The UAW used direct action to prevent sales of the emerging whites-only housing development nearby that was aimed at UAW members. Eventually with no UAW-backed project on the horizon, the workers conceded, buying homes in segregated neighborhoods.

Race Segregation on the Defensive

Today, capitalism, its government and its big businesses no longer openly promote race segregation. The Fair Housing Act of 1968, passed in the wake of massive ghetto uprisings, made it illegal to discriminate in renting or selling homes. This also meant that federal money could no longer promote segregation in housing. But for decades, the government has allowed this law to be thwarted by local governments. In case after case, local authorities have successfully opposed any projects that would involve federally funded housing that would result in poor people living in or near (white) middle class areas. The result is that federal funding is still being diverted into maintaining segregation. At the same time, the government has also steadily shrunk funding for public housing construction, contributing to the crisis of affordable housing.

But despite this there has been change.This past summer the students of San Lorenzo, California High School forced the School Board to drop the Football Team’s name, the Rebels. San Lorenzo was one of these whites-only suburbs where home deeds included covenants that outlawed the sale of homes to non-whites. Today it is an integrated city. Twenty years ago the San Lorenzo High School football team dropped the confederate flag as its symbol. All the vestiges of a segregated bubble against race integration have slowly fallen. It was after last year’s killing of an anti fascist in Charlottesville that the School Board relented to the students’ demands.

The main barrier facing racial integration today is not explicit racist federal or local laws. African Americans are primarily unable to move out of ghettoized neighborhoods because of high rents, high house prices and low pay. Today it is the continuous rise of economic inequality that has strengthened housing segregation.

Black-white integration has increased in the U.S. in recent decades. However it has not been through the lifting of the yoke of poverty for millions of African Americans. Some integration has occurred with gentrification as whites return to urban neighborhoods and ironically, with rising rents, as many black families are often forced to move to the sprawling suburbs. Additionally with the general swing of family incomes downwards, since 2000 there has been a 145% increase in the number of non-Hispanic whites living in high poverty neighborhoods.

Today’s locked-in housing segregation is increasingly class-based even though there are still plenty of overwhelmingly black neighborhoods across the country. Harvard Political Scientist, Robert Putnam, argues that class-based segregation wave has created “a kind of class apartheid.” Even President Obama, speaking on a platform with Putnam in 2015 argued, “what used to be racial segregation now mirrors itself in class segregation.” This, from the President who oversaw the greatest rise in income inequality and the greatest fall in black wealth in recent history when the “subprime” mortgage bubble burst disproportionately affecting African Americans. While they and millions of Americans of all races faced foreclosure and eviction after economic collapse in 2008, Obama and the establishment bailed out the banks.

For the black community this shift towards “class apartheid” in housing is no consolation. Federally initiated housing segregation for over a hundred years has done its work. Rothstein is correct in arguing that  tweaking housing rules or funding will not undo this damage.

Massive investment will be required to rebuild American cities with decent housing that is racially integrated. The big developers are of no use to us as they are only interested in building for the super rich.

We need to turn this situation upside down. We need to tax the rich and big business to build housing that acts as an example of the future society we want: housing with low rents and racially integrated from the beginning. But we must point the finger at capitalism and why capitalism constructed racial segregation in the first place.

Capitalism and Segregation

Richard Rothstein’s book helps us see the road that got us where we are. However where he falls short is in explaining why capitalism segregates. He very skillfully walks us through the process of how the government and big business consciously and brutally designed and built racial segregation in the U.S. At no point, unfortunately, does Rothstein attempts to ask the question: why was racial segregation and racism so important to the ruling establishment of this country? He documents the process but leaves the reader scratching their heads over the big Why? In pointing to the role of some unions as one of the few forces to challenge the process he begins to answer the question of motivation.

Rothstein does touch on the money made from segregation by the development of the suburbs and the profits made in the process of white flight. However he is not a socialist and ultimately, as a supporter of liberal capitalism, he does not condemn the huge wealth accumulated by big developers from real estate and real estate segregation. Today the big real estate and developer interests continue to dominate and make vast profit from building luxury and high end housing while there is a drastic shortage of affordable housing for working class and young people. This capitalist industry and their large political contributions keep both the Democrat and Republicans doing their bidding.

During the height of the development of the suburbs, the real estate industry made money from scaring whites to leave the cities in a panic and sell their homes cheap, and then reselling those same homes for huge profits to the black people left behind. Today, “development” means condos are built for the wealthy which puts pressure upwards on rents for working class people. Private real estate and the market has failed  , and the working class as a whole.

Capitalism is also a system of inequality. Its very foundation is based on this economic inequality. The ruling class, numerically, will always be the few against the many. To maintain this, they use ideological weapons – the media and education systems, and at other times, direct brutality and violence. Through education and the media, big business seeks to constantly accentuate differences between working people based on race, ethnicity, gender or sexual orientation. They hope these divisions will encourage working class people to blame those next to them for their oppression, and away from blaming the ruling class. Racism and racial segregation has been key to the rule of the American ruling class for more than two centuries.

Racism, like other forms of oppression, is encouraged and nourished by the ruling class to divide its primary opponent, the working class. But oppression, and the cycles of division, poverty and violence will not be ended by laws but by movements and common struggle. Black liberation in the last analysis, will not be possible without a united mass movement of all the oppressed centered on the social power of the working class. An egalitarian socialist society will consign race segregation, alongside poverty and all other forms of oppression into the history books where they belong.

• For massive federal investment in high quality, integrated, and affordable public housing based on taxing big business. For local and state public investment along the same lines.
• A jobs program, at a living wage, to build integrated housing across the country;
• No support for politicians that accept developer campaign contributions;
• Build community and tenant organizations to build power from below;
• Super tax the big developers;
• Bring all big housing and construction businesses into democratic public ownership.