Fifty years ago this April, Lyndon Johnson signed the Civil Rights Act of 1968 into law. The signature piece of that Act was Title VIII — the Fair Housing Act. The issue of fair housing had been a political lightning rod for several years. The 1966 Chicago Freedom Movement (of which Martin Luther King served as a key figurehead) had prioritized open housing as its signal issue — enraging Chicago’s white political leadership and thousands of white citizens. The following year, a similar story unfolded in Milwaukee, where a series of open housing demonstrations provoked intense confrontations between black and white activists, white counterprotesters, and law enforcement. Both campaigns made national headlines.
For the majority of politicians in Washington, however, passage of a fair housing bill — one that would make it illegal to discriminate against protected classes in the sale or rental of housing — remained a nonstarter. It was unpopular with large sections of the white voting population, and got nowhere in the Senate during the mid-sixties. Even after the Kerner Commission — established in 1967 to investigate the causes and potential solutions to the wave of urban rebellions erupting in urban America — suggested in its final report that a federal law barring racial discrimination in housing was one important component of achieving greater equality in America, Washington failed to act.
It wasn’t until city after city exploded in grief and rage in the aftermath of Martin Luther King’s assassination on April 4, 1968 that the political inertia was broken. The day after King’s assassination, Johnson urged passage of a Fair Housing Act, and Congress finally relented. A week after King’s death, Johnson signed the act, cementing into law one of the signature legislative achievements of the civil rights era.
Of course, just like the other signature pieces of legislation (the Voting Rights Act of 1965 and Civil Rights Act of 1964), there has always been a gulf between the intent of the law and compliance with it. In 2018, that gulf has grown exceptionally large, as this report from Reveal from the Center for Investigative Reporting shows:
Fifty years after the federal Fair Housing Act banned racial discrimination in lending, African Americans and Latinos continue to be routinely denied conventional mortgage loans at rates far higher than their white counterparts.
This modern-day redlining persisted in 61 metro areas even when controlling for applicants’ income, loan amount and neighborhood, according to a mountain of Home Mortgage Disclosure Act records analyzed by Reveal from The Center for Investigative Reporting.
The yearlong analysis, based on 31 million records, relied on techniques used by leading academics, the Federal Reserve and Department of Justice to identify lending disparities.
It found a pattern of troubling denials for people of color across the country, including in major metropolitan areas such as Atlanta, Detroit, Philadelphia, St. Louis and San Antonio. African Americans faced the most resistance in Southern cities – Mobile, Alabama; Greenville, North Carolina; and Gainesville, Florida – and Latinos in Iowa City, Iowa.
The analysis – independently reviewed and confirmed by The Associated Press – showed black applicants were turned away at significantly higher rates than whites in 48 cities, Latinos in 25, Asians in nine and Native Americans in three. In Washington, D.C., the nation’s capital, Reveal found all four groups were significantly more likely to be denied a home loan than whites.
“It’s not acceptable from the standpoint of what we want as a nation: to make sure that everyone shares in economic prosperity,” said Thomas Curry, who served as America’s top bank regulator, the comptroller of the currency, from 2012 until he stepped down in May.
Yet Curry’s agency was part of the problem, deeming 99 percent of banks satisfactory or outstanding based on inspections administered under the Community Reinvestment Act, a 40-year-old law designed to reverse rampant redlining. And the Justice Department has sued only a handful of financial institutions for failing to lend to people of color in the decade since the housing bust. Curry argued that the law shares part of the blame; it needs to be updated and strengthened.
“The Community Reinvestment Act has aged a lot in 40 years,” he said.
Since Curry departed nine months ago, the Trump administration has gone the other way, weakening the standards banks must meet to pass a Community Reinvestment Act exam. During President Donald Trump’s first year in office, the Justice Department did not sue a single lender for racial discrimination.
Because wealth in America is so intimately bound up in homeownership, these patterns go a long way in explaining our racial wealth gaps.
The disproportionate denials and limited anti-discrimination enforcement help explain why the homeownership gap between whites and African Americans, which had been shrinking since the 1970s, has exploded since the housing bust. It is now wider than it was during the Jim Crow era.
This gap has far-reaching consequences. In the United States, “wealth and financial stability are inextricably linked to housing opportunity and homeownership,” said Lisa Rice, executive vice president of the National Fair Housing Alliance, an advocacy group. “For a typical family, the largest share of their wealth emanates from homeownership and home equity.”
The latest figures from the U.S. Census Bureau show the median net worth for an African American family is $9,000, compared with $132,000 for a white family. Latino families did not fare much better at $12,000.
These problems are not in and of themselves new, and the Obama administration wasn’t very good in addressing them. But it is of course worth remembering that Donald Trump was a racist landlord who was sued for violating the Fair Housing Act long before he was a racist president who declined to do anything to uphold that same act.