Issue #151, Fall 2007

The Supreme Denial of Integration

Despite the high court's recent blow to achieving classroom diversity, fair-housing practices can go a long way toward moving the country beyond racism.

By Gregory D. Squires

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Progressives were alarmed but not surprised when the U.S. Supreme Court in June dealt yet another setback to efforts to achieve diverse classrooms and communities. The 5-4 decision in Parents Involved in Community Schools v. Seattle School District No. 1 struck down voluntary school desegregation programs in Seattle and Louisville, with the majority (Chief Justice John Roberts, and Justices Antonin Scalia, Clarence Thomas, Samuel A. Alito, and Anthony M. Kennedy) holding that initiatives that explicitly take a student's race into account in school-assignment plans are unconstitutional.

In his concurring opinion, Justice Kennedy joined with the four conservative justices in rejecting the Seattle and Louisville plans but rejected his colleagues' colorblind position. He endorsed schools as a forum for "bringing together students of different racial, ethnic and economic backgrounds" and thus left the door slightly ajar for some efforts to achieve diverse schools.

The best hope for achieving integrated classrooms and neighborhoods today, however, is a more aggressive fair-housing movement. And the presidential election season offers progressives an opportunity to elevate the debate over social and economic equity to the national stage and push for comprehensive policies at least from the Democratic contenders.

Blinders of the Colorblind

Roberts' strict allegiance to colorblindness with a shrill but hollow supporting opinion by Thomas and the concurrence of Alito and Scalia, constitutes either ignorance about the role of race in contemporary America, or just the latest effort to preserve white privilege. Once again, the right has hijacked the language of the civil-rights movement to advocate for positions that no one in that movement would ever support.

Writing for the majority, Roberts stated, "The way to stop discrimination on the basis of race is to stop discriminating on the basis of race." But the refusal to distinguish racial classifications that were used to justify slavery and perpetuate the subordination of people of color through Jim Crow and beyond from efforts like those of the Seattle and Louisville schools to eliminate racial isolation and inequality is, at best, disingenuous. As Justice Stephen Breyer wrote in his dissent, "It is a cruel distortion of history to compare Topeka, Kan., in the 1950s to Louisville and Seattle in the modern day - to equate the plight of Linda Brown (who was ordered to attend a Jim Crow school) to the circumstances of Joshua McDonald (whose request to transfer to a [Louisville] school closer to home was initially declined)."

Justice Thomas demonstrated his inability to discern the difference between efforts to eradicate racial isolation rooted in intentional discrimination and arbitrary racial balancing, when he wrote, "Although presently observed racial imbalance might result from past de jure segregation, racial imbalance can also result for any number of innocent private decisions, including voluntary housing choices." His assertions flout the overwhelming evidence provided by the Department of Housing and Urban Development, the Urban Institute, and scholars across the nation that segregated housing patterns are primarily the result of deliberate discriminatory practices by real-estate agents, mortgage lenders, property insurers, and others - hardly "innocent private decisions."

The objective of the civil-rights struggle has been to eradicate a caste system in which whites have exploited non-whites, not to achieve a colorblind world. Breyer understands this; Roberts, Thomas, Scalia, and Alito apparently do not.

Removing the Blinders

The growing restrictions on what school officials can do to achieve greater diversity in the classroom have heightened the urgency for strengthening an effective fair-housing movement. It has long been recognized that the racial demography of schools reflects that of the neighborhoods in which they are located. Neighborhoods in American cities remain highly segregated, and racial discrimination is a central cause.

There has been some progress over the past two decades. During these years, fewer suburbs and urban neighborhoods remained exclusively white, and racial minorities are moving into formerly all-white communities in growing numbers. Fair-housing advocacy, more tolerant racial attitudes, and recognition by the housing industry that the growing minority population represents a business opportunity are among the factors that have contributed to these positive developments.

Still, approximately one of every five minority home-seekers (renters and owners) encounters some form of discrimination during their initial visits with real-estate and rental agents, according to the nationwide 2000 Housing Discrimination Study conducted by the Urban Institute for HUD. Such practices include steering prospective minority home-seekers to minority neighborhoods, restricting the number of homes they are shown, offering them less assistance in getting a mortgage, and charging them higher rents.

As disturbing as the Urban Institute findings are, they understate the level of discrimination in the housing market. The study did not capture the discrimination some home-seekers encounter in follow-up visits, when they make an offer on a home, in applying for a mortgage loan or homeowners insurance policy, or battling their way through other phases of the house hunt. Perhaps even more significant is the fact that many minority home-seekers never get to talk with realtors, because agents refuse to meet with or even answer calls from those with black or Hispanic-sounding voices.

John Baugh, a linguist at Washington University who has studied discrimination based on language in a variety of settings including housing markets, reported that whites accurately detect the race or ethnicity of a person more than 80 percent of the time just from hearing the word "hello" over the telephone. And Princeton University sociologist Douglas Massey found that real-estate agents are less likely to return phone calls or set up appointments with African Americans or Hispanics than with whites who call their offices.

Nevertheless, using a combination of aggressive community organizing, administrative complaints, litigation, educational campaigns (for consumers, regulators, and private industry), and partnerships with providers of housing and housing-related services, fair-housing advocates have made some progress in breaking down barriers to housing in the past 20 years.

The National Fair Housing Alliance (NFHA) reported in 2006 that, under the authority provided by the 1968 federal Fair Housing Act, private and nonprofit advocacy groups generated $225 million for plaintiffs between 1990 and 2005 by filing administrative complaints and private lawsuits. These actions have created rental and homeownership opportunities for many people who otherwise would have been locked out of the housing market or required to pay more than their fair share for housing.

In large part as a result of the aggressive advocacy tactics of the aforementioned groups, major insurers have changed their underwriting and pricing practices. For example, Allstate, State Farm, and other leading insurers limited or eliminated their use of the age or value of housing - factors that had excluded a disproportionate share of homes in minority neighborhoods - as criteria in determining eligibility for a policy. Mortgage lenders have created new products and practices permitting qualified borrowers to make lower down payments, evaluating payment of rent and utilities in determining creditworthiness, and taken other steps to increase access to credit in traditionally underserved markets. In many ways, housing providers and those who offer housing-related services have altered the way they do business with racial and ethnic minorities and in low-income communities.

Nevertheless, there are limitations to the Fair Housing Act's efficacy. Leading fair-housing advocates including scholars like Massey and Nancy Denton (co-authors of the classic study of racial segregation and discrimination, American Apartheid: Segregation and the Making of the Underclass) and activists like William Tisdale of the Metropolitan Milwaukee Fair Housing Council have long argued that the act's fundamental weakness is that its enforcement mechanism relies on individual complaints submitted by private actors. The case-by-case complaint process has curtailed the ability of its chief enforcement agency - HUD - to address what is in fact a systemic problem of institutionalized discrimination and segregation.

The reality remains that what success has occurred is primarily the result of ad-hoc actions by private and nonprofit organizations, many of which have seen their funding cut in recent years. Many of these groups depend on HUD funding through its Fair Housing Initiatives Program (FHIP), whose budget has been eroded since the mid-1990s. FHIP funding peaked at $26 million in 1995, dropping steadily to $18.1 million in Fiscal Year 2007. The Bush administration has proposed a budget of $20.2 million for 2008. Restoring those cuts and augmenting the funding of FHIP agencies would enhance the capacity of private and nonprofit fair-housing groups and strengthen fair-housing enforcement.

The National Community Reinvestment Coalition (NCRC) estimated that the Community Reinvestment Act (CRA) has generated more than $4.7 trillion in new loans for low-income and minority markets since it was enacted in 1977 primarily because the CRA gives third parties, including neighborhood organizations, power to change the lending practices of large financial institutions. Because applications for mergers, acquisitions, and other changes in their business practice (which must be approved by federal regulators) can be, and have been, challenged by community groups protesting lenders' CRA records, several lenders have sought to avoid those costly delays by entering into lending agreements with the parties filing the challenge. Those agreements often include commitments for increased lending to low- and moderate-income neighborhoods along with various educational and marketing practices to meet CRA commitments.

Armed with the information provided by the 1975 Home Mortgage Disclosure Act, neighborhood groups have forced many lenders to live up to the CRA's requirement that federal depositories be responsive to the credit needs of communities in which they are located. Unfortunately, the CRA has no jurisdiction over independent mortgage bankers, brokers, and other non-depository lenders who now initiate a majority of mortgage loans. Passage of the CRA Modernization Act of 2007, introduced in March 2007 by Rep. Luis Gutierrez (D-Ill.) and Rep. Eddie Bernice Johnson (D-Tex.), would bring those lenders under the act's authority and dramatically enhance its effectiveness.

The Association of Community Organizations for Reform Now (ACORN) has estimated that its members have generated $6 billion for low-income communities through CRA organizing efforts and another $6 billion from its anti-predatory lending campaigns. Adding its work to create living-wage ordinances, develop affordable housing, and reform various public services, ACORN pegs its return to low-income communities to more than $15 billion.

As the subprime-mortgage crisis continues to affect low-income neighborhoods and minority markets with disproportionate intensity, ACORN, NCRC, NFHA, and other organizations have focused many of their initiatives on predatory-lending practices that target these communities (See "Subprime Slide," cover story, Shelterforce, Summer 2007). Several states and municipalities have enacted anti-predatory lending laws, but not all communities are protected. Among the provisions of various pending congressional proposals (often modeled on provisions already included in some state laws) are the elimination of pre-payment penalties and balloon payments; prohibitions against steering consumers from lower-cost loans for which they qualify to higher-cost products; requirements that lenders verify borrowers' income and offer them suitable products; prohibitions against financing points and other fees; mandated counseling for consumers considering high-cost loans; creation of a national registry and licensing requirement for brokers not currently regulated by federal law; and, in light of evidence that predatory products are targeted to minority communities and women, other provisions to enhance fair lending.

In the recent Supreme Court school decision, Justice Kennedy offered some race-conscious approaches for creating diverse classrooms, including the strategic location of new schools to draw integrated student bodies. This suggests other steps that public officials could take to reduce racial isolation and nurture more diverse communities. For example, they could locate other public buildings including city halls, court houses, and police and fire stations in traditionally minority communities, signaling a commitment to those neighborhoods and attracting some white residents who might not otherwise move in.

This is precisely what the Village of Oak Park, Ill. did. When village officials built a new city hall, it was located in the eastern portion of the village, near the Chicago border. This was followed by other pro-integration moves, including subsidizing mortgages for families who moved into neighborhoods that contributed to racial diversity and reduced racial isolation, limiting for-sale signs to discourage panic-peddling, and collaborating with nonprofit organizations and private businesses to maintain the village's stability.

Other related housing and community-development proposals have been offered and in some cases implemented that, while focusing on economic diversity, would likely foster racial and ethnic diversity as well. Hundreds of communities have enacted inclusionary-zoning programs requiring developers of private housing to set aside a portion of those units for families that cannot afford market-rate homes. More than 10,000 housing units for working families have been created in Montgomery County, Md., a prosperous Washington, D.C. suburb that launched the nation's first inclusionary-zoning effort in 1974. Building on this concept, more recently community organizations representing lower-income neighborhoods in several cities including Washington D.C., Oakland, Denver, Milwaukee, San Diego, and elsewhere have negotiated community benefits agreements with developers to ensure that at least some housing units will be affordable and available to local residents, a designated share of the jobs to be created will be available to those who live in the neighborhood, retail establishments will offer goods that area residents require, and other amenities required by current residents will be made available. (See "Long Time Coming," Shelterforce, Summer 2007.)

Transit-oriented development, whereby local and state development agencies provide financial incentives for new construction near mass transit nodes, facilitating access to jobs and housing for those who do not have automobiles, has increased access to housing and jobs for working households. Seattle, Portland, and Denver are among those cities exploring such development. Location-efficient mortgages, in which lenders reduce the cost of loans on properties near mass transit, constitute a related approach. Lenders in Chicago, Seattle, San Francisco, and Los Angeles currently offer these loans. These are housing and community-development initiatives aimed at helping working families who cannot afford market-rate housing, but racial and ethnic minorities are likely to benefit disproportionately.

Campaigning for Racial Equity

This list of strategies for diversity and equity is hardly exhaustive. But it illustrates that despite the barriers thrown up by the Supreme Court, progress toward classroom and community diversity remains a vital and achievable objective. As we enter another presidential election season, progressives have an opportunity to build on these initiatives.

To date, the numerous candidates' debates have offered little of substance on race, housing, and related community-development concerns. But many of the Democratic hopefuls have outlined policies and practices that appear to align with these progressive objectives. John Edwards has made fighting poverty his campaign's hallmark and, in a co-edited book (Ending Poverty in America) has endorsed all of these proposals. Barack Obama, invoking his days as a community organizer in Chicago, has made urban poverty a focal point of his campaign calling for, among other policies, a living wage for working families, an increase in the supply of affordable housing, and other initiatives to lift working and poor families into the middle class.

Predatory lending - an issue that has disproportionately affected low- and moderate-income communities and communities of color - has captured the attention of virtually all the Democratic presidential hopefuls as the subprime-mortgage market implodes and foreclosure rates rise. Despite their ad-hoc policy responses to the foreclosure crisis, however, the Democratic candidates have yet to set forth comprehensive policies on housing and community development. And except for answers to direct questions in a June 28 forum moderated by public broadcasting talk-show host Tavis Smiley, author of The Covenant with Black America, they have sidestepped any sustained discussion of the role of race in achieving social and economic equity. Their failure to do so is particularly troubling because, to paraphrase Saul Alinsky, there are few permanent victories. If some windows of opportunity for more equitable housing and community development are open, they are not open very widely. And the Roberts court appears ready to close them when given the chance.

The Supreme Court's downward slide on questions of racial inequity can be traced back at least to the 1977 case of the University of California v. Bakke where the court struck down a specific numerical target in the university's medical school admissions process. But in his dissenting opinion, Justice Harry Blackmun observed, "In order to get beyond racism, we must first take race into account." Blackmun's formula for getting beyond racism should guide progressives in placing fair-housing strategies onto center stage during the 2008 campaign.

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