Redlined, A Legacy of Housing Discrimination

Decades of housing discrimination have
helped create an enormous wealth gap

between white and Black families.

- The enduring legacy of redlining,
the legal government sponsored effort to

deny mortgages and home ownership
opportunities to African-Americans and

other minorities continues to undermine
their quality of life. This violation of

basic civil rights continues to
negatively impact education attainment,

health outcomes, wealth accumulation,
self-esteem, mortality rates, and

civic engagement.

Home ownership has proved to both the
doorway and gatekeeper to success and

well-being in America. It is at the
core of today's racial wealth gap.

- There's a very powerful myth in this
country, and that is that residential

segregation in this country is something
we call de-facto segregation.

Something that happened by accident.

Every textbook that's used in American
high schools and middle schools today

lies about this history.
It talks about how

northern cities were de facto segregated,
without government involvement.

They talk about how the Federal Housing
Administration did a wonderful job of

creating single family homes in the
suburbs for working class families

without mentioning that the working
class families they had created these

homes for could only be white.

- This began a history of excluding people
of color from government housing programs.

Intended to lower the cost of mortgages
and increase home ownership.

Segregated neighborhoods
by race using a code system.

Outlined minority neighborhoods
using the color red.

Intended to expand the secondary
mortgage market by securitizing

mortgage loans.

Community boards often denied
minority veterans mortgages.

Many minority vets could not be
buried in the same cemetery as whites.

It wasn't until 1970 that lending to
communities of color began to increase.

- The way this manifested itself was
through the drawing of maps.

Different neighborhoods were underwritten
as being riskier or safer and the

principle component that determined
riskiness or safety from a lending

standpoint was ethnic
and racial composition.

- It was at that point that the
real estate developers began to

drop strings around areas.

The local banker could choose
who would get mortgages, where.

So that we could not have gotten
a loan out in the suburbs because

those were whites only.

The concept of a middle class Black
only exists in the mind of a middle

class Black.

Everywhere else in the suburbs
you are that nigger family on the

corner of Warren Road
and Boulevard Way.

- Well the truth is that we've had in this
country generations of affirmative action

for whites.

And the sad truth of it is that
whites don't know that that's

happened or they refuse to
accept it or don't understand the history.

And what that leads to is this false
kind-of narrative that "I did it myself."

You know, this Horatio Alger,
individual responsibility narrative.

- There were many federal, state,
and local policies explicitly racial

designed to create segregation in
every Metropolitan area in the country.

And policies that were so
powerful that they still determine

the racial boundaries of
Metropolitan areas today.

The Federal Housing Administration began
a program to suburbanize the entire white

working class population
into single family homes.

- This is Levittown, Pennsylvania.
A new suburban community of

60,000 people with it's
giant shopping center,

winding lanes named for
flowers and trees.

It is fairly typical of communities
all over America.

Where families are pursuing the American
dream to give their children a better

chance in life.

Nearly all are young people.

A large proportion are veterans.
For many it is the first house of

their own and it represents a
major financial investment.

In August 1957, Levittown,
Pennsylvania attracted

international attention as
William Myers Jr. and his family moved

into the three bedroom house.

They are very close
to the Levittown norm.

Except in one respect.

William Myers Jr. and his family are
negroes in an all-white community.

- If more colored are allowed to move in,
Levittown is going to go downhill.

- The only way that those developers
could get the capital to do that was

by going to the
Federal Housing Administration.

In order to get that approval,
they had to commit

never to sell a home
to an African-American.

- Access to leverage allowed
middle-class whites to build wealth.

- The white families who bought those
homes were able to use their wealth

to send children to college. And they use
it to bequeath wealth to their children,

who could use it as down payments
for their own homes.

- Restrictive covenants ensured that
minorities could not

buy into white neighborhoods.

Properties shall continue to be
occupied by the same social

and racial classes.

- When Karen and I purchased this home
that was built in 1948,

we found some documents
in a closet.

Neither the whole or any part of
said tract shall be sold, rented,

or leased to any persons or persons
not of white or Caucasian race.

- Created greatest growth of the middle
class in the history of the world.

In 1940, 42 percent of white
families owned their own home.

In 2000, 71 percent of white
families owned their own home.

- So consequently those 71 percent,
72 percent of white home owners

who own their own home
should be thankful to the

federal government for providing
them this opportunity.

What did not happen or what
happened at the same time

was that we people of color were
discriminated against and were

prevented from taking advantage
of those opportunities.

- The recent housing and foreclosure
crisis were a continuation of a form

of redlining.

- Financial institutions practiced
unrealistic credit scoring and

predatory lending.

Subprime mortgages grew nearly 250
percent. In 1998, subprime mortgages

made up 9.8 percent of the mortgage
market. By 2006, they made up 23.5

percent of the market.

- And the gap between white home ownership
rates and black home ownership rates is

30 percentage points larger than it was
back in 1968. In 1968 the typical Black

family had one-sixth as much
wealth as the typical white family.

Now it is one-tenth.

We have gone backwards
since the civil rights era.

- Latinos lost close to a 170 billion
dollars worth of equity that they

had accumulated in the home
that they purchased many

many years before then.

- When they come to access products,

the choices that they are given
are limited.

So you're given, instead of a
conventional loan, you're given

a special loans that have higher
interest rates or higher fees

that again set you up for
foreclosure or failure as well.

- The scandal of your tenure is your
unwillingness to do your job and

enforce the laws that reduce
housing discrimination.

- The housing crisis affected all
communities but disproportionally

devastated minority families.

Black and Hispanic families lost
nearly 20 years of wealth between

2007 and 2013.

Minority home ownership is the
lowest it's been since 1996.

- Redlining discrimination in the
Asian-American communities,

alive and kicking.
And in California,

you'll see that Asians have the
second highest probability

of going to foreclosure.

Very comparable to Latinos.
Latinos were 1.4,

for Asians it was 1.3.

And so whether it is in home
ownership, rental, small business,

foreclosure, across the
board there is redlining.

- Between 1934 and 1962, 120 billion
in FHA and VA loans were issued.

Over that period of time,
98 percent of the loans

went to white families
and less than two

percent went to African-Americans
and other minorities.

Using the average Home Price Index
between 1934 through 2018,

those FHA, VA loans equate to at least
three trillion dollars

in current real estate value.

Assuming that as loans were paid off
and excess funds were invested in

stocks and other investments
conservatively, another two

trillion were created.

This "White Subsidy" is the major
contributor to the current

racial wealth gap.

- So many white Americans experience
this sense of self esteem, a sense of

you know superiority, if you will.

This sense of mastery, that they
have created their own destiny

in their lives. And they have no
acknowledgment of this invisible

hand that supported them throughout
their lives and not just them, but there's

a legacy of that invisible hand across
generations that has translated itself

from the original affirmative action
to trillions of dollars of head start

ahead of other communities, like
African-Americans, Latinos,

Native Americans, others who don't
have the same benefit.

- Children of homeowners are more likely
to graduate from high school, have less

childhood behavioral problems
and achieve higher college

graduation rates.

- In segregated housing, and in
neighborhoods that everybody is

segregated that tend to be low
income neighborhoods.

There is the greater likelihood that
the youngsters will be involved in

gangs, or will be recruited
to be in gangs.

- I noticed an absence of hope,
an absence of light. These kids

were barraged with a message
every single day of their lives,

that they weren't valued,
that they didn't matter.

And they internalized that.

And that caused frustration
and anger, and eventually despair

and a loss of hope.

There is now a very good science
that shows the sense of not

belonging, the sense of lacking
self-esteem raises cortisol levels

in your blood. And cortisol is good for
you when you're in an extremely

stressful situation, but when you're
constantly bathed in cortisol,

because you're constantly feeling these
stressors of being marginalized and

being told that you're less worthy,
less valuable and being in constant

state of really fear and anxiety,
it changes your physiology completely.

It makes you more prone
to cardiovascular disease,

it makes you more prone
to diabetes, it makes

changes in your brain,
which actually makes it

more difficult to engage
in what we call executive function.

This kind of chronic stress which is
driven by the policies that we've

created is as lethal as any
knife or any gun.

- Suppose discrimination did end today.

How many generations would it take
to get to rough equality and wealth

across races.

France was seven generations,
more than 200 years.

- And so when white Americans
hear about affirmative action

for Blacks, or for Latinos,
they're outraged.

They think "I've done this
by myself, why can't these people."

"There's something
wrong with these people."

- The same programs that were provided
to white Americans, that enabled them

to accumulate this wealth
through home ownership,

those same opportunities
have to be provided to us.

- Imagine where minority families would
be today if their grandparents had the

same access to wealth through
home ownership that white families had.

What would the wealth gap be
between white and minority

families if minorities had the same
access to wealth through home ownership?

Would there be a gap?