The Value of Integration

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South Orange and Maplewood, two New Jersey towns nestled between the city of Newark and the ultra-affluent suburbs of Millburn and Summit, are unusually integrated communities. The South Orange/Maplewood Community Coalition on Race would like it to stay that way, and even improve.

Formed three years ago, the Coalition is a race conscious organization that acts to promote long term residential integration and increased representation of traditionally under represented groups in town government and civic groups. It values integration and diversity, but is also acting out of concern about the economic impact that segregation has on people of color. Communities that have “resegregated” are associated with lower home values, for example, says Wayne Eastman, Coalition secretary and co-chair of its financial incentives committee. “We have dual housing markets. Whites live in housing that appreciates, people of color in housing that appreciates slowly if at all.”

To combat the tendency toward a dual housing market, the Coalition has launched a PRISM (Pro-Integrative Supplemental Money) program. The program, similar to one that has been used successfully in Shaker Heights, OH for over a decade, provides home buyers with an extra below market rate loan, either a second mortgage or home improvement loan, if they are buying in an area where they are racially under-represented.

In practice, this means non-black buyers are eligible in several census tracts in the eastern portions of town, and black buyers in western areas. Not every neighborhood in the two towns is eligible – some are integrated already. The eligible neighborhoods are identified in comparison to the total population in the towns, which Eastman acknowledges does side-step the thorny question of the overall makeup of the towns compared to the region. Fostering integrated demand in the towns neighborhoods should, however, support integrated demand in the towns over all.

Money for the program’s $150,000 revolving loan fund came from Fund for an Open Society and matching grants from the two towns. The Coalition has secured a partnership with Allegiance Bank to issue the mortgages.

The Coalition is also funding a four-county wide fair housing council working on creative testing methods that combine regular paired testing with CRA-type methods to see if real estate brokers are adequately serving integrated neighborhoods. “It’s harder to tell the brokers what they should be doing than, say, in equal employment,” says Eastman. “It’s more complex because of role of customer choice. Establishing measures is much more difficult.”

Indeed, the PRISM program’s primary challenge is getting brokers to make referrals. The real estate market has been so good that many brokers feel no pressure to bother with something new, says Eastman, especially since race is a hot potato within real estate. The coalition has a broker advisory committee that is working on some of those concerns.

Nonetheless, Eastman says program’s existence over time may be even more important than the actual loans. Without excusing biased behavior, he says, brokers do face almost a tragedy of the commons, where they don’t want to be the only one showing someone an area that is resegregating and get negative feedback from their clients. Eastman says the PRISM program should help give brokers a comfort level to show in a race neutral or pro integrative way, because it is a visible sign that the towns are committed to integration over the long haul.

As Fred Profeta, Jr., coalition co-chair, wrote in an op-ed piece in the South Orange Maplewood Transcript, “We want this community to know itself, and be known, as a place which cherishes integration as one of its core values…. The PRISM program will move us toward this culture.”

Contact: South Orange /Maplewood Community Coalition on Race, 973-761-6116.