By Richard D. Kahlenberg
A century ago, the U.S. Supreme Court struck down racial zoning laws that prohibited Black people from buying homes in majority-white neighborhoods. About a half-century later, the Fair Housing Act of 1968 outlawed explicit racial discrimination in the sale and rental of housing units. These advances represent significant landmarks in the march for human dignity but in reality both left untouched economically
discriminatory government zoning policies that exclude low-income and working-class Americans— including substantial numbers of people of color—from entire neighborhoods. As the nation prepares to celebrate the fiftieth anniversary of the 1968 Fair Housing Act next year, it is an opportune time to reflect on how housing policies can be updated to address two important new realities that have emerged in the past half-century.
The first troubling reality is that existing tools to fight racial segregation in housing have been far less successful than have efforts to reduce discrimination in a number of other areas of American life. The major unfinished business of the civil rights movement, writes Richard Rothstein in his devastating new book, The Color of Law, is housing. Over the past fifty years, we have made considerable progress reducing discrimination in restaurants, hotels, transportation, voting, and employment, he writes,
but progress on reducing residential racial segregation has been much more muted (Kahlenberg 2017a). To be sure, the Fair Housing Act did have a positive effect on reducing racial segregation. The Black-white dissimilarity index (in which zero is perfect integration and 100 is absolute segregation), has shrunk from a high of 79 in 1970 to 59 in 2010, according to researchers John R. Logan and Brian
J. Stults (Logan and Stults 2011). But, as William Julius Wilson of Harvard has documented, civil rights laws that reduced discrimination against middle- and upper-class African Americans who could afford to move out of ghettoes left behind a truly disadvantaged group of African Americans who live in highly concentrated poverty.
The second reality—related to the first—is that skyrocketing levels of income segregation in housing are compounding racial segregation. As Harvard University’s Robert Putnam notes in his book, Our Kids, “while race-based segregation has been slowly declining,” we have seen the rise of “a kind of incipient class apartheid” (Putnam 2016). President Barack Obama, likewise, has noted, “what used to be racial segregation now mirrors itself in class segregation” (Boschma 2015).
This worsening housing segregation by class is extremely troubling, because it affects the lives of Americans in profound ways. Where people live affects so much else in their lives—access to transportation, employment opportunities, access to decent health care, and, perhaps most important,
access to good schools. This last point is critically important, because in American society, education has long aspired to be “the great equalizer.” Research dating back five decades suggests one of the most powerful ways to improve the life chances of disadvantaged students is to give them the opportunity to attend high-quality schools that educate rich and poor students under a single roof. Denying all children access to these schools by allowing our educational system to tolerate separate and unequal learning
environments is a threat to economic mobility, and the American Dream itself.
And so, for twenty years, The Century Foundation, in a series of books and reports (Potter 2016a), has outlined a number of ways to reduce economic segregation in our schools through choice within the public school system (particularly magnet schools and diverse charter schools) and by redrawing neighborhood school boundaries (Kahlenberg 2016b). These policies, in one hundred traditional
public schools and charter school organizations, educate 4.4 million students in thirty-two states, and are having a very positive effect on student achievement (Potter 2016b).
These public school choice and redistricting policies remain a critical tool for promoting school integration. But in a country where roughly three-quarters of students attend neighborhood schools—that is, are simply assigned to the school nearest their homes—public school choice is a limited device (National Center for Education Statistics 2016). Policymakers, researchers, and advocates have long
noted that it is important to pursue a parallel set of housing strategies that, if successful, could help integrate neighborhood schools. As scholar David Rusk has put it, “housing policy is school policy” (Rusk, 2007).
Where did this rising segregation by class come from? It stems in part from society’s growing income divide. The free market discriminates based on price and the ability to pay; not everyone can afford a $200,000 house, much less one that costs $500,000 or $1 million, which is the way a capitalist
system works. But layered on top of these market forces is harmful government regulation that aids and abets segregation. Many localities have adopted exclusionary zoning ordinances—sometimes referred to as “snob zoning” rules—that forbid builders from developing apartment buildings or townhouses in certain areas, reserving them instead for detached, single-family homes. While this practice may seem harmless upon first consideration, some of these ordinances actually had racist origins and were
designed to exclude low-income African Americans specifically. Other zoning laws go further, imposing minimum residential lot requirements. In extremely wealthy neighborhoods, with very large lot requirements, policies can effectively exclude virtually all families not in the top 1 percent by
income and wealth. Critically, these policies that exclude families from neighborhoods by requiring minimum lot sizes—purportedly in the name of preserving some sort of aesthetic uniformity—also
exclude children in those families from attending high-performing schools.
How important is public policy in driving economic segregation? It is a major player. “The physical segregation of the upper-middle class,” writes Richard Reeves in his book, Dream Hoarders, “is, for the most part, not the result of free workings of the housing market” (Reeves, 2017). In a stunning
2010 study Jonathan Rothwell of Brookings (who is now at Gallup), and Douglas Massey, a sociologist at
Princeton, found that “a change in permitted zoning from the most restrictive to the least would close 50
percent of the observed gap between the most unequal metropolitan area and the least, in terms of neighborhood inequality” (Rothwell and Massey 2010). Nevertheless, economic zoning has grown considerably over time; Lee Anne Fennell of the University of Chicago Law School calls such ordinances
“a central organizing feature in American metropolitan life” (Fennell 2002).
In this sense, class segregation, like racial segregation, is widely misunderstood. Because income and racial segregation are so commonplace, it is easy to consider them the natural state of affairs. It is tempting to believe that segregation by income and race simply reflects a certain reality—that
people move into neighborhoods where they “fit in,” or where they can afford to live. In fact, segregation is not the result of purely of individual choices or of marketplace forces, but rather of conscious policy decisions made over many decades. Both racial and income segregation are the result of social engineering on the part of federal, state and local actors. Beginning in the early twentieth century,
policymakers and individual citizens pursued a number of policies and practices to segregate housing by race and income, including: explicit zoning by race, which was replaced by exclusionary zoning by income; racially restrictive covenants in housing deeds; redlining in mortgage insurance; and
police inaction in the face of white mob violence against Black families. America’s worst practices did not
go unnoticed, however. Judicial decisions in combination with the Fair Housing Act of 1968 have now made explicitly racial discriminatory actions illegal. But class discrimination in the form of exclusionary zoning laws is not explicitly based on race, and so it remains basically lawful in virtually all states—even if it results in outlandish racial and economic segregation. Technically, exclusionary zoning that has a negative disparate impact on racial and ethnic minorities can be challenged under the Fair Housing Act.
But as Stacy Seicshnaydre of Tulane Law School has documented, in the 2000s, plaintiffs prevailed on appeal in such cases just 8.3% of the time (Seicshnaydre 2013).
To complete the unfinished business of the civil rights movement—and to address rising segregation by income—we need a new set of policies to update the 1968 act. Such a new Economic Fair Housing Act would help the vast majority of Americans—of all races—who are excluded from resource-rich
neighborhoods not merely by market forces, but also by government regulation. This new Fair Housing
Act would curtail government zoning policies that discriminate based on economic status. In its strongest form, it would entirely ban unnecessary exclusionary zoning at the local level. In the alternative, it could impose a penalty on municipalities that insist on maintaining discriminatory zoning, either by withholding infrastructure funds or limiting the tax deduction that homeowners can take for mortgage interest. Inclusionary zoning laws, which affirmatively require developers to set aside housing units for low-income families, should also be adopted in more jurisdictions.
In the current political climate, federal action is unlikely in the near term on this issue, and so progressive policies are most likely to be adopted at the state level. Certain jurisdictions, such as Massachusetts, New Jersey, and California, have led the way in fighting exclusionary zoning by promoting affirmative steps to foster inclusion. Additional progress at the state level would have a meaningful impact for millions of Americans, and also could provide an important model for
federal action at some time in the future.
There are already some signs that a set of unlikely bed fellows could challenge exclusionary zoning. On the left, supporters of an Economic Fair Housing Act could include civil rights activists, who know the racist origins of exclusionary zoning; affordable housing advocates, who know that by creating
artificial scarcity, economic zoning drives up housing prices; and environmentalists, who know that reducing housing density leads to sprawl, longer commutes, and increased pollution. On the right, libertarians have been leading opponents of exclusionary zoning, which they view as a prime example of unwarranted government regulation. And developers naturally resist zoning restrictions that drive down profits by reducing the ability to build denser housing.
In certain states, the moment seems ripe for reform. The affordable housing crisis in places such as California could be a powerful trigger for reform. As a rule, dense housing is more affordable than single-family homes. Because density provides more units per acre, land costs are cheaper for the
developer; dense units (such as apartments) have fewer exterior walls, which keeps construction costs lower; compact developments reduce infrastructure costs for trunk lines and treatment
facilities; and dense housing increases overall supply relative to demand, resulting in lower prices for
consumers. As writer Brent Toderian notes, “Not all dense housing is affordable, but all affordable housing is dense” (Kahlenberg 2017c).
Even in jurisdictions where the affordability of housing is a less salient issue, we are generally seeing
strong populist anger directed at elites on whose behalf the deck is stacked. Few rules are more rigged than those in which government dictates that housing must take a certain configuration or size in order to exclude people of modest means. Of course, populism has taken a very dark turn at the presidential
level, but in states, righteous anger about artificial walls that have been built by government could generate progressive, multiracial coalitions for change.
Ending exclusionary zoning—which essentially discriminates based on income—affects people of all races. Curtailing these programs would be the classic tradition of anti-discrimination laws and at the same time would represent a dramatic effort to upend a longstanding and unjust system. Fifty years after passage of the Fair Housing Act, it is time to end state-sponsored economic segregation that is dividing
the nation and severely impeding opportunity for millions of Americans.
Richard D. Kahlenberg, kahlenberg @tcf.org,is a Senior Fellow at The Century Foundation. He is the author of All Together Now: Creating Middle-Class Schools through Public School Choice (Brookings, 2001); and the editor of The Future of School Integration: Socioeconomic Diversity as an Education Reform Strategy (Century Foundation, 2012). He is now working on a book on housing segregation. This essay is adapted from a 2017 Century Foundation report, “An Economic Fair Housing Act.”
References – An Economic Fair Housing Act
Boschma, Jamie. 2015. “Why Obama is Worried About ‘Class Segregation’.” The Atlantic. May 15.
Fennell, Lee Anne. 2002. “Homes Rule (reviewing William A. Fischel, The Homevoter Hypothesis: How Home Values Influence Local Government Taxation, School Finance, and Land-Use Policies”). 112 Yale Law Journal 617.
Kahlenberg, Richard D. 2016a. School Integration in Practice: Lessons from Nine Districts.” The Century Foundation. October 14.
Kahlenberg, Richard D. 2017b. “Why Segregated Neighborhoods Persist. Washington Monthly. June/July/August.
Kahlenberg, Richard. 2017c. An Economic Fair Housing Act. The Century Foundation.
Logan, John R. and Brian J. Stults. 2011. The Persistence of Segregation in the Metropolis: New Findings From the 2010 Census. USA2010. Available at: https://s4.ad.brown.edu/Projects/Diversity/Data/Report/report2.pdf
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Potter, Halley et al. 2016a. A New Wave of School Integration: Districts and Charters Pursing Socioeconomic Diversity. The Century Foundation.
Potter, Halley. 2016b. Updated Inventory of Socioeconomic Integration Policies: Fall 2016. The Century Foundation.
Putnam, Robert. 2015. Our Kids: The American Dream in Crisis. New York: Simon & Schuster.
Reeves, Richard V. 2017. Dream Hoarders: How the American Upper Middle Class Is Leaving Everyone Else in the Dust, Why That Is a Problem, and What to Do About It. Brookings Institution.
Rothwell, J.T. and D.S. Massey. 2010. “Density Zoning and Class Segregation in U.S. Metropolitan Areas.” Social Science Quarterly 91:5. 1123-1143.
Rusk, David. 2007. Housing Policy is School Policy. Presentation, Housing Mobiliy and Education Forum. December 3.
Seicshnaydre, Stacy. 2013. “Is Disparate Impact Having Any Impact? An Appellate Analysis of Forty Years of Disparate Impact Claims Under the Fair Housing Act?” American University Law Review 63:2.