What are the long-term effects of residential segregation?

The Home Owners Loan Corporation labeled poor neighborhoods (in red) as unworthy of mortgage lending in this 1938 map of Atlanta, setting up decades of institutional discrimination. Source: Mapping Inequality

The United States is almost as segregated now as it was when President Lyndon Johnson signed the Fair Housing Act in 1968. That seems insane. But it actually shouldn’t be surprising. A house, more than most other goods, is extremely durable. Even poorly built real estate can last a long time. Therefore the consequences of housing decisions have a long-lasting impact. And our country is prone to making poor housing decisions. Since at least the New Deal, Black Americans have been unfairly targeted by federal, state and local governments, siphoned off from suburban homes and the wealth accumulation that comes with owning one.

The other horrible racial injustices of our past (voter suppression, discriminatory hiring practices, etc.) were actually relatively easy to begin fixing as part of the Civil Rights bills of the 1960s. Integrating neighborhoods isn’t nearly as seamless. Housing, like our cities more broadly, is path dependent. The decisions of the past have a profound effect on the present.

This paper examines the debilitating effects of segregation in American cities. They include, but are not limited to: wide health disparities, loss of wealth, poor education and political polarization.

Before I get started, I’d like to get something out of the way. This paper focuses entirely on discrimination against African Americans. While other minority groups have experienced unlawful residential segregation, it wasn’t to the same extent as the segregation experienced by African Americans. Still, I think it’s important to keep in mind that we all are affected by the discriminatory housing policies of the past. Social psychologists have found that segregation can give white people an unrealistic belief in their own superiority (Rothstein 2017). In a segregated society, no one gains experience navigating the diverse climate we’ll face far into the future. Bubbles do us no good.

Openly racist policies replaced with subtly racist policies

De facto segregation is defined as racial residential division through the practices and private prejudices of consumers. The history of segregation in the United States is not predominantly one of de facto segregation, Economic Policy Institute distinguished fellow Richard Rothstein argued in his book Color of Law. It is actually a history of de jure segregation, or segregation through law.

The government demolished integrated neighborhoods and replaced them with segregated public housing. It subsidized the construction of homes as long as they weren’t sold or resold to Black people (Rothstein 2017). It “redlined” areas it defined as risky for mortgage lending, thus sectioning African American communities off from needed goods or services (Mikhitarian 2018).

Even after the Fair Housing Act purportedly put an end to it all, lawful discrimination continues. Communities still use exclusionary zoning ordinances, or land use plans that keep affordable housing out of wealthy neighborhoods. The ordinances require single-family homes to be built on lots with a high minimum square footage. This excludes lower-income families from moving to a more affluent neighborhood even if they wanted to. Exclusionary zoning ordinances were originally motivated in part by racial animosity (Rothstein 2017).

Another seemingly race-neutral policy — the federal tax code’s Home Mortgage Interest Deduction (MID) — exacerbates the gap in wealth building opportunities between African Americans and whites. The MID allows homeowners to deduct from their taxes the interest they pay on a loan for the purchase or improvement of their home or property. Because whites are about 15% more likely to own a home with a mortgage, they receive a disproportionate share of the benefit from the MID. African Americans, who comprise 13% of the population, receive just 6% of MID’s total benefits. That means they miss out on an estimated $44.8 billion in lost housing benefits (Sullivan et. al 2017).

The federal government further perpetuates economic and racial segregation through the Low-Income Housing Tax Credit program and Housing Choice Vouchers, also known as Section 8. On the surface, these two programs seem like ideal remedies to the fair housing crisis. In practice, they’re far from ideal. The Low-Income Housing Tax Credit allocates tax credits to states, which distribute them to developers (Quick 2019). Those developers usually build affordable housing projects in already segregated areas where economic opportunities are scarce. They do so because it’s cheaper and because more affluent communities can and often will veto developers’ proposals. About 75% of the tax credits nationwide are distributed to neighborhoods where poverty rates are at least 20% (Rothstein 2017). Section 8 subsidizes families’ rents so they can live in a place they couldn’t otherwise afford. But some landlords can legally refuse the vouchers even if rent is paid on time. In 2010, over half of vouchers were used in neighborhoods where the poverty rate was at least 20%. African Americans are hit hard by these practices. They have an average lower income and lower wealth than their white counterparts (McIntosh 2020) and are more likely to receive housing assistance (Badger 2015).

Health and wealth inequalities

Black children suffer from asthma at twice the rate of white children and are 10 times more likely to die from asthma complications (CDC). Low birth weight is one of the main causes of asthma, the leading chronic disease of children. Black children are more likely to be low birth weight and are also more likely to visit the emergency room than other children with the same birth weight. The racial difference in asthma incidence disappears when controlling for where children grow up, according to the National Bureau of Economic Research. New Jersey kids of all races who live in a majority-Black zip code are at much higher risk for asthma (Alexander 2017). In California, researchers found that residents of redlined communities are more than twice as likely to visit the emergency room for asthma (Manke 2019). Thus, residential segregation is one of the driving factors in asthma prevalence (Alexander 2017).

Why does segregation lead to higher asthma rates? Well, segregated communities are more likely to be near sources of pollution. The National Center for Environmental Assessment found that African-Americans are exposed to 1.5 times more particulate matter than white people. Particulate matter is a combination of suspended solids and liquids in the air. Examples include dust, smog and soot. Long-term exposure to particulate matter, which can contribute to low birth weight, asthma and heart attacks, is associated with residential segregation (Newkirk II 2018).

Hotter temperatures are also associated with segregation. Historically redlined neighborhoods are less likely to be shielded from the sun. When an area has fewer trees and more paved surfaces like roads and parking lots, the people living there endure miserably hot temperatures. This is called the urban heat island effect. Every summer, residents in these areas must brace for a high A/C bill, especially if they live in the South.

In Richmond, Virginia (I’m being loose with my definition of the South), residents of formerly redlined neighborhoods face a summer day five degrees hotter than the average greenlined area. One Richmond neighborhood called Gilpin was once part of the thriving area known as Black Wall Street. Then it was hit hard by “slum clearance”, or urban renewal, when the government took land using eminent domain laws for public housing and highway projects. Now Gilpin residents endure summer temperatures averaging 15 degrees hotter than their wealthy Richmond counterparts. Increases in temperature can weaken the heart, make breathing difficult and affect mental health. Gilpin residents should expect to live to 63 years old. Across the river, residents in a largely middle-class white community are gearing up to live until 83 years old (Plumer and Popovich 2020).

African Americans also lack adequate access to healthcare. In New York, pharmacies in minority neighborhoods are less likely to have needed medications in stock. Urban healthcare facilities are also more likely to close in poor and minority areas (Williams 2001). The COVID-19 pandemic’s disproportionate effect on Black people made the problem extremely clear.

Black people are also less likely to be able to pass down wealth from one generation to the next. Middle-class Americans derive most of their wealth from the equity they have in their homes (Rothstein 2017). Many African Americans missed out on the opportunity. By the time the Fair Housing Act came around, it was too late. Today, the Black home ownership rate stands at under 45%, according to Zillow. Nearly 75% of whites own a home. The homeownership gap is larger now than it was during the Jim Crow era (Glantz et. al 2018).

The average white family has about $171,000 in wealth, ten times the average wealth — $17,150 — of a Black family (McIntosh 2020). The racial income gap is smaller, as Black households make an average of $46,073, or about 60% of the average white household income of $76,057 (Semega et. al 2020).

In Atlanta, redlined neighborhoods don’t have nearly the same property value as the greenlined ones (Mikhitarian 2018). And here in Athens, homeowners in a community called Linnentown missed out on the wealth that would have come during the late 20th-Century boom in housing prices. In the early 1960s, the University of Georgia and the city paid the residents a small sum to move so they could build student housing. Black property owners were paid about $3,000 less than white owners for similar parcels of land (Driggers 2020). Mayor Kelly Girtz said the Linnentown homes would be worth hundreds of thousands of dollars today. This February, the Athens Mayor and Commission unanimously passed a resolution granting residents several reparational demands, including a wall of recognition and annual budget recommendations for projects like affordable housing (Allen 2021).

With all that being said, researchers at Duke University said it’s a myth that the racial homeownership gap fully explains the racial wealth gap. “Homeownership and wealth are clearly correlated, but it is a severe misstatement to claim that if blacks owned homes at the same rate as whites the racial wealth gap would be closed,” the paper from the Samuel DuBois Cook Center on Social Equity said. We might have the relationship between the two phenomena backward: maybe it’s wealth that causes homeownership and not the other way around. Just like other Americans, Black households usually purchase a home as soon as they obtain enough wealth. Even once they own a home, African Americans still lag behind. White homeowners are worth $140,000 more than Black homeowners. It takes money to make money. Wealth’s cumulative nature, along with our country’s history of de jure discrimination, puts Black Americans in a hole that homeownership alone won’t solve (Darity et. al 2018).

The education gap has deep roots

“Slum clearance” and segregated housing affected hundreds of Black families in Athens in the 20th Century. The effects not only linger in the community’s wealth accumulation but also in their educational opportunities. Athens-Clarke County’s racial academic achievement gap is double that of the state. African American students in the district are on average 3.4-grade levels behind White students (Clarke County School District 2019). Yikes.

Across America, kids in poor areas receive a poor education. They perform worse on academic and standardized tests compared to their peers. And impoverished Black students fare even worse. 81.1% of poor Black students attended high poverty schools in 2013 compared to 53.5% of poor white students, according to the Economic Policy Institute.

The concentration of so many disadvantaged children in one classroom is problematic. Think about the strain on the teacher tasked with handling everyone at one time. He or she needs to allocate special attention to kids who need it. But when everyone needs it, that becomes a major issue.

To make problems worse: today’s schools are still extremely segregated. That is due in part to the de jure residential segregation from the past. Some school districts comprise areas that once were redlined neighborhoods. Others are in the greenlined areas. That makes a big difference. Remember the property value gap in Atlanta? Schools are funded through property taxes. The higher the property values in the area, the more the school gets.

A good education is probably the most effective instrument of economic mobility, as I think most people would argue. When poor Black people receive a worse education, they have a reduced chance of moving to the middle class. Fewer than 25% of African American adults whose parents were in the bottom wealth quintile advance to the middle wealth quintile. 42% of white adults are able to make the same jump (Rothstein 2017).

Surprise! Segregation also drives political polarization

It’s probably not America’s growing diversity that is pushing us further and further into a polarized hellhole. Residential segregation is a bigger factor for our current political standstill, according to University of California professor Jessica Trounstine. She wrote a book called Segregation by Design as a result of a conversation with her partner Brian. On a walk by the ocean in Half Moon Bay, California, the two argued about whether or not private control of coastal land led to unequal beach access for the town’s citizens. You know, your casual conversation by the beach.

Like any good political science professor, Trounstine dug into the relevant literature. But she couldn’t find what she wanted. As she began wrestling with more foundational questions of land use control and inequality, she decided to write her own book. That’s how Segregation by Design came to be (Trounstine 2018). Its findings carry a lot of weight.

Trounstine wanted to figure out why some cities have immaculate roads and balanced budgets while others have neither, teetering on the edge of bankruptcy as they fail their residents. First, she tested the relationship between residential segregation and racial divisions in mayoral elections in 25 large American cities between 1990 and 2010. If segregated cities are more polarized, then the voting results should divide more cleanly along racial lines in cities with more residential segregation. To measure segregation, she used something called the H index, which “measures the difference between the diversity of the city and the weighted average diversity of individual neighborhoods”. This took into account the relative size of racial groups.

The higher the H index, the more stark the differences in racial voting patterns. A city in the 10th percentile of H index distribution averaged a 35 percentage point gap between races in support for the winning mayor. A city in the 90th percentile (thus, very segregated) could expect a difference of 63 percentage points. That’s huge. And it held true even after controlling for conservative ideology among the white population. Cities with more conservative white populations actually have smaller racial divides, Trounstine discovered.

Trounstine next set out to determine if political polarization determined how much a city spent on public goods like roads, police, parks and sewers. She expected the segregated nature of our cities to carry profound implications for how American cities distribute public goods. More residential segregations should equal less support for government spending. To test this, Trounstine merged data sets from Census of Governments, Census of Population and Housing and the 2007–11 American Community Survey. In total, she had complete data dating back to the 1980s for about 3,000 cities with populations that range from 1,000 people to more than 8 million.

Trounstine’s analysis proved substantively meaningful and statistically significant, even after controlling for factors like age, education status and median household income. Increasing the segregation index from the 25th to 75th percentile lowered per capita direct general expenditure from $1,262 to $1,159. The more segregated a city, the smaller its budget for public goods. When a city’s population can’t come to a consensus, that’s what they get. And because nonwhites are more likely to live in a segregated city, they are much more likely to live in a community that struggles to generate public goods for its residents (Trounstine 2015).

Potential fixes

While the Fair Housing Act did some good, it failed to give the Department of Housing and Urban Development (HUD) enough enforcement power. An internal study conducted by HUD in 2009 found that local jurisdictions across the country don’t complete the required fair housing paperwork when applying for block grants.

Even if the enforcement mechanism was perfect, that alone wouldn’t fully realize the lofty goals of the Fair Housing Act. When private developers construct a neighborhood, its chief concern is money. That makes sense. But if we are to accomplish fair housing for everyone, the private sector must do its part. And, like it or not, the government will have to tell it what to do. Here are some possible solutions, most of which I learned from Rothstein’s The Color of Law:

  • Be like Montgomery County, Maryland. It requires developers building homes in even the most affluent communities to guarantee 12–15% for moderate-income families. Then the public housing authority purchases a third of those units to rent out to low-income families. One caveat to note here is that the county still largely sets its land aside for large lot single-family homes. Ideally, we need zoning laws that incentivize developers to build affordable multi-family housing.
  • U.S. Congress could amend the federal tax code to deny the mortgage interest reduction to homeowners in a community that is highly segregated.
  • Sue the suburbs, as Jerusalem Demsasa argued in Vox. It may be a last resort, but Joe Biden’s administration could decide to go after the worst practitioners of racially biased exclusionary zoning ordinances in court. The disparate impact standard ensures that there doesn’t have to be discriminatory intent. Biden has already proposed the idea of providing $300 million in local housing policy grants to help city governments eliminate exclusionary zoning.

We need to house individuals from across the entire income spectrum and the houses must be geographically dispersed to promote economic integration. We need real estate agents that don’t discriminate based on race, as Newsday discovered. We also need lenders that don’t discriminate based on race, as CNBC and The Center for Investigative Reporting said they do.

As shown in this paper, residential segregation leads to wide health disparities between races, loss of generational wealth in Black families, a Black-white education divide and reduced public spending on needed goods and services in segregated cities.

Alarmingly, the American public is seemingly unaware of why these issues exist. 64% of white Americans believe the legacy of segregation is either a minor factor or no factor at all in today’s racial wealth gap (Rothstein 2017). This is likely due to gaps in our history books, The Color of Law noted. At best, schools are conveniently ignoring the topic to this day. Change the history books, and maybe then we can change the future.

Sources

Allen, Stephanie. “‘This is the beginning’: Athens-Clarke commission unanimously passes Linnentown resolution.” Athens Banner-Herald. Feb. 16, 2021.https://www.onlineathens.com/story/news/politics/government/2021/02/16/athens-clarke-commission-unanimously-passes-linnentown-resolution/6775158002/

Alexander, Diane and Currie, Janet. “Is it Who You Are or Where You Live? Residential Segregation and Racial Gaps in Childhood Asthma.” National Bureau of Economic Research. July 2017. https://www.nber.org/system/files/working_papers/w23622/w23622.pdf

Badger, Emily. “How Section 8 became a ‘racial slur.’” The Washington Post. June 15, 2015. https://www.washingtonpost.com/news/wonk/wp/2015/06/15/how-section-8-became-a-racial-slur/

Centers for Disease Control and Prevention. Most Recent National Asthma Data, https://www.cdc.gov/asthma/most_recent_national_asthma_data.htm

Clarke County School District. Achievement Gap in CCSD, 2019, https://www.clarke.k12.ga.us/cms/lib/GA02209096/Centricity/Domain/4/ACHIEVEMENT%20GAP%203WITH%20NUMBERS2.pdf

Darity, William Jr., et. al “What We Get Wrong About Closing the Racial Wealth Gap.” Samuel DuBois Cook Center on Social Equity at Duke University. April 2018. https://socialequity.duke.edu/portfolio-item/what-we-get-wrong-about-closing-the-racial-wealth-gap/

Driggers, Samuel. “Racial Disparities in Athens’ Urban Renewal Project GA R-50.” University of Georgia Community Mapping Lab. May 2020. https://public.tableau.com/profile/sam1360#!/vizhome/CGIS_Final_Project_Dashboard/Dashboard1?publish=yes

Glantz, Aaron and Martinez, Emmanuel. “For people of color, banks are shutting the door to homeownership.” Reveal from The Center for Investigative Reporting. Feb. 15, 2018. https://revealnews.org/article/for-people-of-color-banks-are-shutting-the-door-to-homeownership/

Manke, Kara. “Historically redlined communities face higher asthma rates.” Berkeley News. May 22, 2019. https://news.berkeley.edu/2019/05/22/historically-redlined-communities-face-higher-asthma-rates/?fbclid=IwAR0HeHhqkS38uWZC1hXkg7W98cN8c33kECdosYBrL1YABxi1ctE0mnphIE8

McIntosh, Kriston et. al “Examining the Black-white wealth gap.” Brookings Institute. Feb. 27, 2020. https://www.brookings.edu/blog/up-front/2020/02/27/examining-the-black-white-wealth-gap/

Mikhitarian, Sarah. “Home Values Remain Low in Vast Majority of Formerly Redlined Neighborhoods.” Zillow. Apr. 25, 2018. https://www.zillow.com/research/home-values-redlined-areas-19674/

Newkirk, Vann R. II. “Trump’s EPA Concludes Environmental Racism Is Real.” The Atlantic. Feb. 28 2018. https://www.theatlantic.com/politics/archive/2018/02/the-trump-administration-finds-that-environmental-racism-is-real/554315/

Plumer, Brad and Popovich, Nadja. “How Decades of Racist Housing Policy Left Neighborhoods Sweltering.” The New York Times. Aug. 24, 2020. https://www.nytimes.com/interactive/2020/08/24/climate/racism-redlining-cities-global-warming.html

Quick, Kimberly and Kahlenberg, Richard. “Attacking the Black–White Opportunity Gap That Comes from Residential Segregation.” The Century Foundation. https://tcf.org/content/report/attacking-black-white-opportunity-gap-comes-residential-segregation/?agreed=1

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Government Segregated America. Liveright Publishing Corporation, a Division of W.W. Norton & Company, 2017.

Semega, Jesssica et. al. “Income and Poverty in the United States: 2019.” United States Census Bureau. Sept. 2020. https://www.census.gov/data/tables/2020/demo/income-poverty/p60-270.html

Sullivan, Laura et. al. “Misdirected Investments: How the Mortgage Interest Deduction Drives Inequality and the Racial Wealth Gap.” Institute on Assets and Social Policy (IASP) & National Low Income Housing Coalition. 2017. https://heller.brandeis.edu/iere/pdfs/racial-wealth-equity/racial-wealth-gap/misdirected-investments.pdf

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Sports reporter for the Atlanta Journal-Constitution and fourth-year undergraduate student at the University of Georgia.

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