Wednesday, July 26, 2017

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


larryrothsblog |  I grew up in the pre-Vietnam era. Our high schools taught a sanitized version of American history. I was in college before I learned about the country’s incarceration of ethnic Japanese, many of whom were citizens, during World War II. I was shocked. Our country had concentration camps, and we put our own people in them.

I had a bit of the same feeling when I was reading The Color of Law: A Forgotten History of How Our Government Segregated America, by Richard Rothstein. I’d known that the GI Bill offered financing for veterans returning from World War II to buy homes, and how that financing led to suburban developments like Levittown on Long Island. What I didn’t know is that the federal government, through both Veterans Administration (VA) and Federal Housing Administration (FHA) loans, secured financing only for white veterans. And, as I’ll soon discuss, both VA and FHA went beyond merely not providing financing for black veterans. Further, the educational opportunities for black veterans were often limited to vocational schools. Some benefit administrators refused to process applications to four-year colleges for black veterans. I guess I shouldn’t have been surprised, but I was. Black veterans, like their white counterparts, had just returned from fighting a nearly four-year war only to be treated like second-class citizens.
  
The book goes back to post-Civil War era and especially the end of Reconstruction, but I’ll start with a 1917 Supreme Court ruling in Buchanan v. Worley, which ruled that racial zoning violated the Fourteenth Amendment, not because of protections granted freed slaves, but because of a business rule—the freedom to contract, or the right of a property owner to sell to whomever he wanted.
 
In our day, a Supreme Court decision would be final, but not in the 1920s. Buchanan was not only ignored, but flouted. As it would turn out, in the post-War housing boom, which was largely financed by VA and FHA loans, subdivisions were not only encouraged, but required to include covenants restricting the subdivisions to “Caucasians.” Our government, in other words, enforced segregation in any area where VA or FHA loans were used to finance homes. In one example, a man in Berkley, California bought a house financed by FHA and was not able to move into the house. He let a black teacher rent the house until he could move in. As a result he was advised he’d lost his participation in the FHA insurance program and that he’d never again be able to obtain a government-backed mortgage. And this was in 1959. In Berkley.
 
The result of black people’s not being able to get financing was they often paid more than white people would in areas less desirable. Additionally, they frequently bought using a contract for deed, meaning the house was theirs only after all payments were made. These contracts for deed were frequently at high interest rates, and one missed payment meant the loss of everything they’d invested in the house. Because they paid higher prices for the homes and higher interest rates, they frequently subdivided the homes and deferred maintenance. The neighborhoods looked bad. Whites feared blacks’ moving in or even near their neighborhoods (when, had black families had the same access to mortgages whites did, their neighborhoods would have looked just as good). Realtors took advantage of white fears. They started moving black families into white neighborhoods and going door to door spreading fear among the white residents that their neighborhood was about to be “taken over.” Whites sold at a loss. Racial prejudice was a lose-lose proposition. Whites lost money on their homes. Blacks paid more for their homes, both initially and in interest, than whites. Unscrupulous Realtors made out like bandits.