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OpEdNews Op Eds    H3'ed 6/28/15

Why We Must Fight Economic Apartheid in America

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Reprinted from Robert Reich Blog


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Almost lost in the hullabaloo over the Supreme Court's decisions last week upholding the Affordable Care Act and allowing gays and lesbians to marry was its decision on housing discrimination. It's significant and timely.

In a 5-4 ruling, the Court found that the Fair Housing Act of 1968 requires plaintiffs to show only that the effect of a policy is discriminatory, not that defendants intended to discriminate.

The decision could affect everything from bank lending practices whose effect is to harm low-income non-white borrowers, to zoning laws that favor higher-income white homebuyers.

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First, some background. Americans are segregating ever more by income in terms of where we live.

Thirty years ago, most cities contained a broad spectrum of residents from wealthy to poor. Today, entire cities are mostly rich (San Francisco, San Diego, Seattle) or mostly impoverished (Detroit, Baltimore, Philadelphia).

Because a disproportionate number of the nation's poor are black or Latino, that means we're experiencing racial segregation on a much larger geographical scale than ever before -- a kind of economic apartheid.

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Which is why, for example, black students are more isolated today than they were 40 years ago. More than 2 million black students now attend schools where 90 percent of the student body is minority.

According to a new study by Stanford researchers, even many middle-income black families remain in poor neighborhoods with low-quality schools, fewer parks and playgrounds, more crime, and inadequate public transportation. Blacks and Hispanics typically need higher incomes than whites in order to live in affluent neighborhoods.

To some extent, this is a matter of choice. Many people prefer to live among others who resemble them racially and ethnically.

But some of this is due to housing discrimination. For example, a 2013 study by the Department of Housing and Urban Development found that realtors often show black families fewer properties than white families possessing nearly the same income and wealth.

The income gap between poor minority and middle-class white communities continues to widen. While the recovery has boosted housing prices overall, it hasn't boosted them in poor communities.

That's partly because bank loan officers are now more reluctant to issue mortgages on homes in poor neighborhoods -- not because lenders intend to discriminate but because they see greater risks of falling housing values and foreclosures.

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But this reluctance is a self-fulfilling prophecy. It has reduced demand for homes in such areas -- resulting in more foreclosures and higher rates of vacant and deteriorating homes. The result: further declines in home prices.

As prices drop, even homeowners who have kept current on their mortgage payments can't refinance to take advantage of lower interest rates.

Others who owe more on their homes than their homes are worth have simply stopped maintaining them. In many poor communities, this has caused the housing stock to decline further, and home prices to follow.

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Robert Reich, former U.S. Secretary of Labor and Professor of Public Policy at the University of California at Berkeley, has a new film, "Inequality for All," to be released September 27. He blogs at www.robertreich.org.

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