Zoning, Housing Regulation, And America’s Racial Inequality

Round Roc is a town in the state of Texas. Single-family zoning rules in the United States have effectively discriminated against… [+] Black and lower-income homeowners, resulting in segregated cities and suburbs.
getty
The Biden Administration The White House has been promoting America’s new official holiday, Juneteenth, which commemorates the end of slavery and the continued battle for true Black independence and equality. “Exclusionary Zoning: Its Effect on Racial Discrimination in the Housing Market,” according to a White House release, may have perplexed some. Zoning? Protecting and increasing voting rights, combating job discrimination, and battling white supremacist organizations are all things we can comprehend (all of which the Administration is doing.). But why is housing and zoning policy being highlighted?
Biden’s team is well-versed in the subject. Systemic racism pervades America’s housing and zoning systems. And, as a result, long-term and ongoing negative effects on Black incomes, wealth, and equality are exacerbated. Whites are far more likely than Blacks to inherit wealth, and much of that wealth is derived from house equity.
Across the country, skyrocketing housing prices are wreaking havoc on the economy and households. However, they are having a particularly negative impact on Black families, who have long faced discrimination in American housing markets as a result of rising prices.
Home ownership has long been the most effective means of increasing household wealth, establishing creditworthiness, and accumulating financial equity. My colleague Darrick Hamilton and Chris Farmighetti discovered that the Black-white homeownership disparity widened between 2004 and 2017, especially among college graduates, according to their research.
ADDITIONAL INFORMATION FOR YOU
Expert on the housing market Despite the battles and achievements of the civil rights movement and anti-discrimination laws, the black-white house ownership divide in America is now five points higher than it was in 1920, according to Jim Carr. Of course, few individuals bought homes back then, but the post-World War II increase in American homeownership was also racially segregated.
Formal government policy, housing finance practices, economic discrimination and exclusion, and the political organization of our metropolitan regions have all contributed to the racial divide.
To begin, look at government policy. During the Great Depression of the 1930s, the federal government intervened in the housing market to assist failing banks. Consistent appraisal and valuation standards were adopted as part of that national policy to improve the effectiveness of the national capital market.
Those benchmarks were drawn onto city maps by the Home Owners Loan Corporation (HOLC), indicating which neighborhoods were deemed to be better or worse for home investments. The areas were color-coded, with red being the most dangerous.
These maps gave rise to the term “redlining,” which refers to the practice of banning certain districts from government-backed housing lending. Pre-existing patterns of discrimination were locked into the growing national finance market by drawing red lines around segregated Black and non-white areas.
Those discriminatory housing criteria were implemented by federal lending agencies and private housing finance when America turned to substantial postwar spending in education and housing through the G.I. Bill. Housing schemes in America were “tantamount to a state-sponsored system of segregation,” according to Richard Rothstein’s breakthrough book The Color of Law.
Real estate brokers’ tactics exacerbated discriminatory lending. Agents engaged in anti-Black practices such as undervaluing Black properties, requiring excessive financial documentation from Black buyers and steering them away from white neighborhoods, and using “blockbusting” techniques to panic white homeowners into selling at below-market prices, with the brokers pocketing the difference, according to sociologist Rose Helper.
Finally, the rise and political structure of America’s suburbs grounded housing discrimination. With racially restrictive housing rules as a major element, all-white suburbs formed around increasingly non-white cities. Many suburban housing developers, such as J.C. Nichols in Kansas City or the Levitts of Long Island’s Levittown, include explicit racial restrictions in their contracts, prohibiting Blacks from purchasing properties and white homeowners from selling to Blacks.
Exclusionary zoning, which only allowed single-family houses on big lots, was paired with these racial restrictions. This prohibited multifamily construction, further excluding non-whites and keeping their children out of public schools with higher funding. (Many of our public schools are funded by local property taxes, which have grown more fast in these richer suburbs.)
Many cities are now heavily zoned for single-family dwelling, and the suburbs are even more so. The New York Times published maps in 2019 depicting how single-family zoning dominates residential land in cities. And it wasn’t just conservative places that had high levels: Minneapolis (70 percent), Los Angeles (75 percent), Seattle (81 percent), and San Jose (80 percent) all had high levels (94 percent ).
Some places are making policy changes. Minneapolis has chosen to eliminate single-family zoning on 70% of its residential land, Portland will allow up to four units on formerly restricted sites, and Berkeley has voted to abolish single-family zoning due to its racially discriminatory effects.
However, restricted zoning is strongly rooted in urban and suburban politics, supported by politically active house owner associations. As a result, the Biden Administration’s effort for federal incentives, education, and guidance is a positive development. Given the complex forces preventing Black people from becoming homeowners, this alone will not be enough to reform America’s racially discriminatory policies. But it’s a crucial start./nRead More