1 00:00:06,114 --> 00:00:10,994 Decades of housing discrimination have helped create an enormous wealth gap 2 00:00:10,994 --> 00:00:13,406 between white and black families. 3 00:00:14,767 --> 00:00:19,287 - The enduring legacy of redlining, the legal government sponsored effort to 4 00:00:19,287 --> 00:00:23,547 deny mortgages and home ownership opportunities to African-Americans and 5 00:00:23,547 --> 00:00:29,756 other minorities continues to undermine their quality of life. This violation of 6 00:00:29,756 --> 00:00:34,872 basic civil rights continues to negatively impact education attainment, 7 00:00:34,872 --> 00:00:41,002 health outcomes, wealth accumulation, self-esteem, mortality rates, and 8 00:00:41,002 --> 00:00:42,348 civic engagement. 9 00:00:42,348 --> 00:00:47,503 Home ownership has proved to both the doorway and gatekeeper to success and 10 00:00:47,503 --> 00:00:52,694 well-being in America. It is at the core of today's racial wealth gap. 11 00:00:53,635 --> 00:00:57,944 - There's a very powerful myth in this country, and that is that residential 12 00:00:57,944 --> 00:01:02,172 segregation in this country is something we call de-facto segregation. 13 00:01:02,172 --> 00:01:04,098 Something that happened by accident. 14 00:01:04,098 --> 00:01:07,896 Every textbook that's used in American high schools and middle schools today 15 00:01:07,896 --> 00:01:10,703 lies about this history. It talks about how 16 00:01:10,703 --> 00:01:14,707 northern cities were de facto segregated, without government involvement. 17 00:01:14,707 --> 00:01:19,733 They talk about how the Federal Housing Administration did a wonderful job of 18 00:01:19,733 --> 00:01:23,533 creating single family homes in the suburbs for working class families 19 00:01:23,533 --> 00:01:27,233 without mentioning that the working class families they had created these 20 00:01:27,233 --> 00:01:29,515 homes for could only be white. 21 00:01:35,917 --> 00:01:42,788 - This began a history of excluding people of color from government housing programs. 22 00:01:42,788 --> 00:01:47,580 Intended to lower the cost of mortgages and increase home ownership. 23 00:01:49,113 --> 00:01:53,469 Segregated neighborhoods by race using a code system. 24 00:01:56,315 --> 00:02:00,649 Outlined minority neighborhoods using the color red. 25 00:02:02,636 --> 00:02:07,497 Intended to expand the secondary mortgage market by securitizing 26 00:02:07,497 --> 00:02:09,348 mortgage loans. 27 00:02:09,348 --> 00:02:13,007 Community boards often denied minority veterans mortgages. 28 00:02:13,007 --> 00:02:17,796 Many minority vets could not be buried in the same cemetery as whites. 29 00:02:17,796 --> 00:02:23,847 It wasn't until 1970 that lending to communities of color began to increase. 30 00:02:25,873 --> 00:02:30,230 - The way this manifested itself was through the drawing of maps. 31 00:02:30,230 --> 00:02:35,823 Different neighborhoods were underwritten as being riskier or safer and the 32 00:02:35,823 --> 00:02:40,324 principle component that determined riskiness or safety from a lending 33 00:02:40,324 --> 00:02:43,848 standpoint was ethnic and racial composition. 34 00:02:51,696 --> 00:02:55,417 - It was at that point that the real estate developers began to 35 00:02:55,417 --> 00:02:58,043 drop strings around areas. 36 00:02:58,043 --> 00:03:02,790 The local banker could choose who would get mortgages, where. 37 00:03:02,790 --> 00:03:08,122 So that we could not have gotten a loan out in the suburbs because 38 00:03:08,122 --> 00:03:11,019 those were whites only. 39 00:03:11,019 --> 00:03:16,187 The concept of a middle class Black only exists in the mind of a middle 40 00:03:16,187 --> 00:03:17,901 class Black. 41 00:03:17,901 --> 00:03:21,574 Everywhere else in the suburbs you are that nigger family on the 42 00:03:21,574 --> 00:03:24,247 corner of Warren Road and Boulevard Way. 43 00:03:30,993 --> 00:03:36,660 - Well the truth is that we've had in this country generations of affirmative action 44 00:03:36,660 --> 00:03:38,196 for whites. 45 00:03:38,196 --> 00:03:41,880 And the sad truth of it is that whites don't know that that's 46 00:03:41,880 --> 00:03:45,542 happened or they refuse to accept it or don't understand the history. 47 00:03:45,542 --> 00:03:51,969 And what that leads to is this false kind-of narrative that "I did it myself." 48 00:03:51,969 --> 00:03:57,467 You know, this Horatio Alger, individual responsibility narrative. 49 00:03:57,467 --> 00:04:02,024 - There were many federal, state, and local policies explicitly racial 50 00:04:02,024 --> 00:04:06,407 designed to create segregation in every Metropolitan area in the country. 51 00:04:06,407 --> 00:04:10,528 And policies that were so powerful that they still determine 52 00:04:10,528 --> 00:04:13,713 the racial boundaries of Metropolitan areas today. 53 00:04:13,713 --> 00:04:19,761 The Federal Housing Administration began a program to suburbanize the entire white 54 00:04:19,761 --> 00:04:22,917 working class population into single family homes. 55 00:04:24,284 --> 00:04:29,085 - This is Levittown, Pennsylvania. A new suburban community of 56 00:04:29,085 --> 00:04:32,963 60,000 people with it's giant shopping center, 57 00:04:32,963 --> 00:04:36,839 winding lanes named for flowers and trees. 58 00:04:36,839 --> 00:04:40,392 It is fairly typical of communities all over America. 59 00:04:40,392 --> 00:04:44,862 Where families are pursuing the American dream to give their children a better 60 00:04:44,862 --> 00:04:46,997 chance in life. 61 00:04:46,997 --> 00:04:49,873 Nearly all are young people. 62 00:04:49,873 --> 00:04:53,872 A large proportion are veterans. For many it is the first house of 63 00:04:53,872 --> 00:04:58,590 their own and it represents a major financial investment. 64 00:05:00,189 --> 00:05:04,144 In August 1957, Levittown, Pennsylvania attracted 65 00:05:04,144 --> 00:05:08,854 international attention as William Myers Jr. and his family moved 66 00:05:08,854 --> 00:05:11,064 into the three bedroom house. 67 00:05:11,064 --> 00:05:13,687 They are very close to the Levittown norm. 68 00:05:13,687 --> 00:05:15,990 Except in one respect. 69 00:05:15,990 --> 00:05:22,261 William Myers Jr. and his family are negroes in an all-white community. 70 00:05:22,261 --> 00:05:28,560 - If more colored are allowed to move in, Levittown is going to go downhill. 71 00:05:28,560 --> 00:05:32,057 - The only way that those developers could get the capital to do that was 72 00:05:32,057 --> 00:05:34,537 by going to the Federal Housing Administration. 73 00:05:34,537 --> 00:05:37,438 In order to get that approval, they had to commit 74 00:05:37,438 --> 00:05:40,124 never to sell a home to an African-American. 75 00:05:40,124 --> 00:05:44,674 - Access to leverage allowed middle-class whites to build wealth. 76 00:05:44,674 --> 00:05:47,958 - The white families who bought those homes were able to use their wealth 77 00:05:47,958 --> 00:05:52,487 to send children to college. And they use it to bequeath wealth to their children, 78 00:05:52,487 --> 00:05:55,501 who could use it as down payments for their own homes. 79 00:05:56,222 --> 00:05:59,383 - Restrictive covenants ensured that minorities could not 80 00:05:59,383 --> 00:06:01,550 buy into white neighborhoods. 81 00:06:01,550 --> 00:06:05,242 Properties shall continue to be occupied by the same social 82 00:06:05,242 --> 00:06:06,986 and racial classes. 83 00:06:07,716 --> 00:06:12,259 - When Karen and I purchased this home that was built in 1948, 84 00:06:12,259 --> 00:06:15,102 we found some documents in a closet. 85 00:06:15,102 --> 00:06:20,611 Neither the whole or any part of said tract shall be sold, rented, 86 00:06:20,611 --> 00:06:27,229 or leased to any persons or persons not of white or Caucasian race. 87 00:06:30,125 --> 00:06:34,976 - Created greatest growth of the middle class in the history of the world. 88 00:06:34,976 --> 00:06:40,707 In 1940, 42 percent of white families owned their own home. 89 00:06:40,707 --> 00:06:46,116 In 2000, 71 percent of white families owned their own home. 90 00:06:47,917 --> 00:06:53,951 - So consequently those 71 percent, 72 percent of white home owners 91 00:06:53,951 --> 00:06:57,394 who own their own home should be thankful to the 92 00:06:57,394 --> 00:07:02,102 federal government for providing them this opportunity. 93 00:07:02,102 --> 00:07:05,931 What did not happen or what happened at the same time 94 00:07:05,931 --> 00:07:11,581 was that we people of color were discriminated against and were 95 00:07:11,581 --> 00:07:16,775 prevented from taking advantage of those opportunities. 96 00:07:16,775 --> 00:07:22,295 - The recent housing and foreclosure crisis were a continuation of a form 97 00:07:22,295 --> 00:07:23,809 of redlining. 98 00:07:23,809 --> 00:07:27,650 - Financial institutions practiced unrealistic credit scoring and 99 00:07:27,650 --> 00:07:29,567 predatory lending. 100 00:07:29,567 --> 00:07:36,361 Subprime mortgages grew nearly 250 percent. In 1998, subprime mortgages 101 00:07:36,361 --> 00:07:44,039 made up 9.8 percent of the mortgage market. By 2006, they made up 23.5 102 00:07:44,039 --> 00:07:46,105 percent of the market. 103 00:07:46,105 --> 00:07:51,505 - And the gap between white home ownership rates and black home ownership rates is 104 00:07:51,505 --> 00:07:58,569 30 percentage points larger than it was back in 1968. In 1968 the typical Black 105 00:07:58,569 --> 00:08:03,335 family had one-sixth as much wealth as the typical white family. 106 00:08:03,335 --> 00:08:05,500 Now it is one-tenth. 107 00:08:05,500 --> 00:08:09,065 We have gone backwards since the civil rights era. 108 00:08:09,065 --> 00:08:15,598 - Latinos lost close to a 170 billion dollars worth of equity that they 109 00:08:15,598 --> 00:08:20,159 had accumulated in the home that they purchased many 110 00:08:20,159 --> 00:08:22,110 many years before then. 111 00:08:24,169 --> 00:08:27,897 - When they come to access products, 112 00:08:27,897 --> 00:08:31,664 the choices that they are given are limited. 113 00:08:31,664 --> 00:08:34,380 So you're given, instead of a conventional loan, you're given 114 00:08:34,380 --> 00:08:39,409 a special loans that have higher interest rates or higher fees 115 00:08:39,409 --> 00:08:44,201 that again set you up for foreclosure or failure as well. 116 00:08:44,201 --> 00:08:47,900 - The scandal of your tenure is your unwillingness to do your job and 117 00:08:47,900 --> 00:08:51,807 enforce the laws that reduce housing discrimination. 118 00:08:51,807 --> 00:08:56,106 - The housing crisis affected all communities but disproportionally 119 00:08:56,106 --> 00:08:58,405 devastated minority families. 120 00:08:58,405 --> 00:09:03,325 Black and Hispanic families lost nearly 20 years of wealth between 121 00:09:03,325 --> 00:09:06,331 2007 and 2013. 122 00:09:06,331 --> 00:09:11,166 Minority home ownership is the lowest it's been since 1996. 123 00:09:12,172 --> 00:09:15,244 - Redlining discrimination in the Asian-American communities, 124 00:09:15,244 --> 00:09:17,704 alive and kicking. And in California, 125 00:09:18,334 --> 00:09:21,766 you'll see that Asians have the second highest probability 126 00:09:21,766 --> 00:09:23,465 of going to foreclosure. 127 00:09:23,465 --> 00:09:27,349 Very comparable to Latinos. Latinos were 1.4, 128 00:09:27,349 --> 00:09:29,664 for Asians it was 1.3. 129 00:09:30,204 --> 00:09:34,945 And so whether it is in home ownership, rental, small business, 130 00:09:34,945 --> 00:09:39,958 foreclosure, across the board there is redlining. 131 00:09:39,958 --> 00:09:49,067 - Between 1934 and 1962, 120 billion in FHA and VA loans were issued. 132 00:09:49,067 --> 00:09:51,937 Over that period of time, 98 percent of the loans 133 00:09:51,937 --> 00:09:54,738 went to white families and less than two 134 00:09:54,738 --> 00:09:57,850 percent went to African-Americans and other minorities. 135 00:09:58,650 --> 00:10:04,395 Using the average Home Price Index between 1934 through 2018, 136 00:10:04,395 --> 00:10:10,015 those FHA, VA loans equate to at least three trillion dollars 137 00:10:10,015 --> 00:10:12,321 in current real estate value. 138 00:10:22,377 --> 00:10:26,954 Assuming that as loans were paid off and excess funds were invested in 139 00:10:26,954 --> 00:10:31,192 stocks and other investments conservatively, another two 140 00:10:31,192 --> 00:10:33,169 trillion were created. 141 00:10:33,169 --> 00:10:36,250 This "White Subsidy" is the major contributor to the current 142 00:10:36,250 --> 00:10:37,822 racial wealth gap. 143 00:10:38,442 --> 00:10:42,527 - So many white Americans experience this sense of self esteem, a sense of 144 00:10:42,527 --> 00:10:44,419 you know superiority, if you will. 145 00:10:44,419 --> 00:10:49,633 This sense of mastery, that they have created their own destiny 146 00:10:49,633 --> 00:10:53,112 in their lives. And they have no acknowledgment of this invisible 147 00:10:53,112 --> 00:10:58,969 hand that supported them throughout their lives and not just them, but there's 148 00:10:58,969 --> 00:11:03,598 a legacy of that invisible hand across generations that has translated itself 149 00:11:03,598 --> 00:11:09,734 from the original affirmative action to trillions of dollars of head start 150 00:11:09,734 --> 00:11:13,604 ahead of other communities, like African-Americans, Latinos, 151 00:11:13,604 --> 00:11:17,988 Native Americans, others who don't have the same benefit. 152 00:11:17,988 --> 00:11:22,985 - Children of homeowners are more likely to graduate from high school, have less 153 00:11:22,985 --> 00:11:26,991 childhood behavioral problems and achieve higher college 154 00:11:26,991 --> 00:11:28,593 graduation rates. 155 00:11:30,354 --> 00:11:34,465 - In segregated housing, and in neighborhoods that everybody is 156 00:11:34,465 --> 00:11:38,393 segregated that tend to be low income neighborhoods. 157 00:11:38,393 --> 00:11:45,111 There is the greater likelihood that the youngsters will be involved in 158 00:11:45,111 --> 00:11:48,674 gangs, or will be recruited to be in gangs. 159 00:11:48,674 --> 00:11:53,125 - I noticed an absence of hope, an absence of light. These kids 160 00:11:53,125 --> 00:11:56,461 were barraged with a message every single day of their lives, 161 00:11:56,461 --> 00:11:59,269 that they weren't valued, that they didn't matter. 162 00:11:59,269 --> 00:12:01,156 And they internalized that. 163 00:12:01,156 --> 00:12:07,582 And that caused frustration and anger, and eventually despair 164 00:12:07,582 --> 00:12:09,209 and a loss of hope. 165 00:12:09,209 --> 00:12:11,802 There is now a very good science that shows the sense of not 166 00:12:11,802 --> 00:12:16,431 belonging, the sense of lacking self-esteem raises cortisol levels 167 00:12:16,431 --> 00:12:21,070 in your blood. And cortisol is good for you when you're in an extremely 168 00:12:21,070 --> 00:12:26,097 stressful situation, but when you're constantly bathed in cortisol, 169 00:12:26,097 --> 00:12:30,083 because you're constantly feeling these stressors of being marginalized and 170 00:12:30,083 --> 00:12:34,194 being told that you're less worthy, less valuable and being in constant 171 00:12:34,194 --> 00:12:38,815 state of really fear and anxiety, it changes your physiology completely. 172 00:12:38,815 --> 00:12:42,493 It makes you more prone to cardiovascular disease, 173 00:12:42,493 --> 00:12:45,745 it makes you more prone to diabetes, it makes 174 00:12:45,745 --> 00:12:48,444 changes in your brain, which actually makes it 175 00:12:48,444 --> 00:12:52,611 more difficult to engage in what we call executive function. 176 00:12:52,611 --> 00:12:57,782 This kind of chronic stress which is driven by the policies that we've 177 00:12:57,782 --> 00:13:04,442 created is as lethal as any knife or any gun. 178 00:13:04,442 --> 00:13:07,039 - Suppose discrimination did end today. 179 00:13:07,039 --> 00:13:11,197 How many generations would it take to get to rough equality and wealth 180 00:13:11,197 --> 00:13:12,965 across races. 181 00:13:12,965 --> 00:13:17,832 France was seven generations, more than 200 years. 182 00:13:17,832 --> 00:13:22,040 - And so when white Americans hear about affirmative action 183 00:13:22,040 --> 00:13:26,145 for Blacks, or for Latinos, they're outraged. 184 00:13:26,145 --> 00:13:30,996 They think "I've done this by myself, why can't these people." 185 00:13:30,996 --> 00:13:33,236 "There's something wrong with these people." 186 00:13:34,698 --> 00:13:41,821 - The same programs that were provided to white Americans, that enabled them 187 00:13:41,821 --> 00:13:45,021 to accumulate this wealth through home ownership, 188 00:13:45,021 --> 00:13:49,103 those same opportunities have to be provided to us. 189 00:13:50,945 --> 00:13:54,893 - Imagine where minority families would be today if their grandparents had the 190 00:13:54,893 --> 00:13:59,164 same access to wealth through home ownership that white families had. 191 00:13:59,864 --> 00:14:02,455 What would the wealth gap be between white and minority 192 00:14:02,455 --> 00:14:07,876 families if minorities had the same access to wealth through home ownership? 193 00:14:08,413 --> 00:14:10,901 Would there be a gap?