Decades of housing discrimination have
helped create an enormous wealth gap
between white and black families.
- The enduring legacy of red-lining, 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 todays 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 to happen 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 is
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, racial (inaudible),
individual responsibility narrative.
- They 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
sixty thousand people with its
giant shopping center, winding
lanes named for flowers and
trees. It is (inaudible) 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 that to bequeath
wealth to their children, who can 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 where
discriminated against and were
prevented from taking advantage
of those opportunities.
- The recent housing and foreclosure
crisis were a continuation of a form
of red-lining.
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 loan 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.
- Red-lining discrimination in the
Asian-American communities, live
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 red-lining.
- 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 equates 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 way 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 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.