This article was originally published in The American Prospect on July 5, 2015.

In June, the Supreme Court issued several decisions with big policy implications. Its rejection of a challenge to Obamacare and its endorsement of the right to same-sex marriage have received the attention they were due. A third decision, confirming that the Fair Housing Act prohibits not only policies that intend to perpetuate racial discrimination and segregation, but those that have the effect of doing so, was equally momentous. Yet because the ruling concerned an obscure (to the public) and technical phrase (“disparate impact”), it has been more difficult to understand. To comprehend its significance, a review of its background is in order.

Roots of the Fair Housing Act

In over 100 cities during the summer of 1967 African Americans rioted, in rebellion against segregated and inadequate ghetto conditions. President Lyndon Johnson appointed a commission headed by Illinois Governor Otto Kerner to determine the causes of the riots; its report was issued in March, 1968. The Kerner Commission noted that because housing in suburbs surrounding black ghettos was closed to African Americans, creating an artificially reduced housing supply, “housing cost Negroes relatively more” than the cost to comparable white families. Despite its higher cost, ghetto housing was “three times as likely to be overcrowded and substandard.”1 The Commission concluded that:

Our nation is moving toward two societies, one black, one white–separate and unequal… Segregation and poverty have created in the racial ghetto a destructive environment totally unknown to most white Americans. What white Americans have never fully understood–but what the Negro can never forget–is that white society is deeply implicated in the ghetto. White institutions created it, white institutions maintain it, and white society condones it.2

Here, however, the Kerner Commission pulled its punches with, as we shall see, calamitous results that we confront today. As the Kerner Commission (and many well-informed Americans) understood at the time, it was not some vague “white institutions” that created the ghetto, but racially explicit government policy–especially federal public housing programs that unashamedly separated blacks from whites to create racial isolation in neighborhoods where segregation had been previously unknown, and federal home finance programs that underwrote the creation of all-white suburbs with the explicit requirement that blacks be excluded from them. It has been hard to figure out how to remedy the actions of undefined “white institutions;” identifiable federal programs would have been a lot easier to get our hands on.

Nonetheless, the Kerner Commission called for Congress to “mount programs on a scale equal to the dimension of the problems.” Residential integration, it said, “is the only course which explicitly seeks to achieve a single nation,” and “a national fair housing law is essential” to begin the “out-movement” of Negroes from ghettos. “In many suburban areas,” the Commission advised, “a program combining positive incentives with the building of new housing will be necessary” to carry out desegregation.3

There was nothing obscure about the Kerner Commission report: a paperback version published by The New York Times rapidly sold over two million copies. But a month following its publication, Martin Luther King, Jr., who had been making housing integration a focus of his civil rights campaigns, was assassinated. His murder provoked another round of riots, in many cases even more ferocious than those of the previous year. Less than a week after the assassination, Congress passed the “Fair Housing Act,” prohibiting discrimination in housing.

But the act did not explicitly tie its euphemistic “fair” housing to “integrated” housing, a connection that not only the Kerner Commission had made but that Congressional sponsors of the act made clear. Senator Walter Mondale, for example, stated in Senate debate that the act should lead to replacing segregated neighborhoods with “truly integrated and balanced living patterns.”4

The act’s wording, however, was sufficiently vague to inspire nearly a half-century of mischief. Civil rights advocates have had to argue, over and over again, often without success, that policies confining minority housing to segregated neighborhoods, no matter how well the housing may be constructed, cannot be “fair.”5 These cases, beginning in the early 1970s, have asserted that housing policies perpetuating racial segregation, even if not openly discriminatory, have a “disparate impact” on minorities, and therefore violate the Fair Housing Act. For example, a government program that restricts the building of housing for low- or moderate-income families to already segregated neighborhoods, instead of in middle class suburbs, violates the Fair Housing Act–even if the government agency sponsoring the housing does not openly state that its purpose is to keep African Americans out of the suburbs. It was such a case that the Supreme Court decided last month.

Justice Kennedy’s Breathtaking Opinion

Filed by the Inclusive Communities Project (ICP) of Dallas against the Texas Department of Housing, the case concerned a federal program, the Low Income Housing Tax Credit (LIHTC). As its name states, the program gives tax credits to developers who guarantee that a significant percentage of units in a project will have rents that are low enough to be affordable to low and moderate income families. In Dallas, 92 percent of units subsidized by these federal tax credits were built in already segregated (high-minority), low-income neighborhoods. ICP claimed that this policy had a disparate impact on minorities–in other words, that it reinforced racial segregation. At trial, the Texas Department of Housing insisted that it had a legitimate and race-neutral policy goal: to revitalize inner city neighborhoods with good housing. Other justifications frequently claimed by developers and states for using the credit in segregated neighborhoods include that more housing can be built in the inner city because land is cheaper there; that such housing is located where people needing housing presently live and wish to remain; and that suburban zoning laws and local officials prevent construction of low income housing in attempts to preserve their uniform middle class characters, alleged to be a race-neutral preference. In fact, the history of residential zoning laws and practices in the United States demonstrates that racial exclusion was, from their inception, an important motivation.6

A federal district court in Texas and the Fifth Circuit Court of Appeals ruled that developers’ and states’ justifications for reinforcing segregation by the location of their tax credit projects do not outweigh the obligation to integrate when less discriminatory alternatives are available. The State of Texas then petitioned the Supreme Court for review, arguing that the Fair Housing Act did not forbid programs that had a “disparate impact” on minorities, but only those that were intentionally designed to harm them. Around the country, in cases similar to the ICP case, 11 federal circuit courts of appeals, all those that heard such controversies, had upheld the use of the disparate impact analysis in their evaluation of Fair Housing Act claims. Thus, to put it mildly, it was remarkable that the Supreme Court even agreed to hear the Texas challenge, since the court only rarely considers cases where there is no dispute in the lower courts.

Moreover, the Roberts Court has seemed determined to erode civil rights protections involving race whenever it could find an opportunity. It struck down a critical provision of the Voting Rights Act and has narrowed the options for institutions of higher education, as well as for K-12 districts, to diversify their student bodies. It just announced it has accepted a new challenge to affirmative action at the University of Texas, in a case to be heard next year in which already minimal preferences for African American applicants may be prohibited.

So it is not surprising that the Fair Housing Act was squarely in its sights as well. In this case, four justices (almost certainly the conservatives, Justices Thomas, Scalia, Alito and Chief Justice Roberts) appeared to be determined, notwithstanding the consistent judgment of the appellate system, to repudiate the use of the Fair Housing Act to combat segregation in situations where an intent to segregate cannot be proven. Supreme Court procedure requires only four justices to agree to hear a case. Presumably, the four thought they could get Justice Kennedy to join them to form a five-vote majority. In view of Kennedy’s past conservatism on racial matters, civil rights advocates were terrified in the year leading up to last month’s ruling that he would join the other conservatives in holding that disparate impact cannot be considered in a Fair Housing Act case. It must have seemed to be a safe bet for the conservatives–prior to the ICP case, Justice Kennedy had consistently voted to reject the claims of African Americans in civil rights cases, including those involving voting rights, affirmative action, or employment discrimination. Frequently, he has voted for the conservative majority’s decision while tempering its reasoning with a seemingly more moderate concurring opinion.7

(This new ICP controversy, of course, could easily have been avoided if President Johnson and Congress had not tried to be cute by refusing to call integrated housing by its name, terming it “fair” housing instead.)

But this time, Justice Kennedy was unpersuaded by his conservative colleagues. Perhaps, although it can’t be known, he was influenced by recent events in Ferguson, Baltimore, and elsewhere to recognize that we are not living in a post-racial society, and that the urgent demands of the Kerner Commission have never been addressed. Whatever his motivation, Justice Kennedy’s remarkable opinion made clear that the Fair Housing Act was designed to desegregate communities, not just to eliminate open acts of continued discrimination. He acknowledged that the segregation characterizing metropolitan areas across the nation even today has resulted, at least in part, from official government policies in the 20^th century that were designed, explicitly, to segregate neighborhoods by race. In support of this historical argument, he cited a “friend of the court” brief that was submitted to the Supreme Court on behalf of 61 housing scholars (including the author of this article) who described the myriad public policies that purposefully segregated metropolitan areas by race. (The brief had been organized by the Economic Policy Institute and the Haas Institute for a Fair and Inclusive Society at the University of California, Berkeley). Justice Kennedy quoted the Kerner Commission report, and concluded his breathtaking opinion–breathtaking because the Supreme Court had never before dared to say this so openly–with this passage:

The Fair Housing Act must play an important part in avoiding the Kerner Commis­sion’s grim prophecy that “[o]ur Nation is moving toward two societies, one black, one white–separate and un-equal.” The Court acknowledges the Fair Housing Act’s continuing role in moving the Nation toward a more integrated society.

The Poverty and Race Research Action Council has published a more comprehensive summary of Justice Kennedy’s opinion, written by Florence Roisman, a law professor at Indiana University and an ICP board member, demonstrating in greater detail how unique and pathbreaking this opinion may be.8 It is recommended reading.

The Downside

There is, however, one cautionary note to all this. Despite his full-throated endorsement of integration, Justice Kennedy’s opinion also asserts that revitalization of inner-city neighborhoods can be a legitimate government policy, and disparate impact claims cannot be used to force local governments to choose desegregation over revitalization. His decision sends the case back to the lower courts to determine whether, in light of his opinion, the Texas practice should be permitted. Justice Kennedy’s opinion states: “This case, on remand [that is, upon reconsideration by the lower courts], may be seen simply as an attempt to second-guess which of two reasonable ap­proaches a housing authority should follow in the sound exercise of its discretion in allocating tax credits for low-income housing.”

It is unlikely that this instruction will result in the ICP victory being reversed–the Texas policy was so blatant and extreme that its allocation of tax credits to developers of housing in segregated communities cannot be termed “reasonable.” At the very least, housing proposals for segregated neighborhoods that purport to contribute to “revitalization” must be part of a concerted plan of revitalization that includes providing access to good jobs, improved transportation infrastructure, development of well-maintained parks and other community facilities, adequate funding of schools, and making the neighborhood attractive to middle class families, while preserving affordability for those with moderate and lower incomes. Only with such a plan will revitalization contribute to integration, not undermine it.

The LIHTC policies followed by the Texas Department of Housing had none of these characteristics. But Justice Kennedy’s endorsement of “two reasonable approaches” could pose problems for civil rights groups that challenge low-income housing developments that support segregation less blatantly than Dallas’s, but still fail to surround tax-credit projects in segregated communities with true neighborhood revitalization.

“Gilding the Ghetto”

Policymakers have long debated whether African Americans are well-served by new investments in ghetto communities. In 1949, Thurgood Marshall, then special counsel to the National Association for the Advancement of Colored People (NAACP), wrote a memo to President Harry Truman protesting the federal government’s refusal to permit African Americans to participate in suburban mortgage programs and the government’s insistence that African Americans remain in already segregated and dilapidated communities:

Housing in our society today is more than a shelter. It includes the whole environment in which the home is maintained. A well-built house in a poorly planned, impoverished, slum area, without adequate schools, community facilities, etc., does not provide good housing. Nor does a well-built house in a ghetto provide good housing in a democratic society. The [Federal Housing Administration] has recognized that good neighborhoods are an integral part of good housing, but it has equated “good neighborhood” with a “racially homogenous” neighborhood. Any such concept can only frustrate the most important objective of the National Housing Act–which is to provide for Americans a healthful home environment, both physically and psychologically, in which they will develop into democratic citizens.”9 

This was not an idea unique to Thurgood Marshall. When the Federal Housing Administration guaranteed loans to mass-production builders of whites-only suburban subdivisions in the mid-20^th century, those builders used these guarantees to build communities, not just houses. William Levitt, developer of the Levittowns, acknowledged that in defending his federally financed and racially restricted subdivisions, “Access to a swimming pool or a baseball diamond is as important a part of what a purchaser buys as solid walls or a strong roof because he’s not just buying a house, he’s buying a way of life.”10

In the years before the Fair Housing Act was passed, federal officials debated whether the needs of ghetto residents could be better addressed by investments in ghettos themselves, or by mobility programs that would assist ghetto residents in moving to middle class suburbs where they, and their children, could thrive. In January 1966, President Johnson proposed a model cities program to fund planning to desegregate metropolitan areas. In his message to Congress, Johnson said that “[t]he impact of the racial ghetto will become a thing of the past only when the Negro American can move his family wherever he can afford to do so.”11 Secretary of Housing and Urban Development Robert Weaver warned that the program funds could not be used only to improve the housing stock of the ghetto; “[we] must proceed in tandem with simultaneous moves to open up housing occupancy to all potential customers throughout the whole metropolitan area.”12 Yet when the program was adopted by Congress, Johnson’s proposal that funds be used to compel metropolitan areas to desegregate was deleted. Control was placed in the hands of local officials who refused to use the funds for desegregation, and made clear they would not accept funds if compelled to desegregate.13

Meanwhile, advocates of integration within the administration were being defeated by a combination of liberals, conservatives, segregationist Democrats, and radical civil rights advocates of Black Power to revive African American neighborhoods from within, not disperse their residents into the broader community. Some liberals agreed because they thought political resistance to integration was so strong that the goal was unachievable. They proposed instead programs to rebuild the ghettos into more livable and, in the view of some, even self-sustaining communities. Frances Fox Piven and Richard Cloward were the most influential of these liberals, writing in 1966 in The New Republic that “strategies must be found to improve ghetto housing without arousing the ire of powerful segments of the white community.” The reason we don’t invest more in ghetto revitalization, they said, was that suburban whites fear that attention to urban Negroes’ problems would be an invitation to black “invasion” of white neighborhoods. If liberals unequivocally forswear integration, they argued, more urban investments might be forthcoming.14 In retrospect, advocacy of integration seems quite an implausible explanation of why we’ve allowed truly disadvantaged neighborhoods to fester.

At a planning conference in late 1965, intended to lead to a full White House Conference on Civil Rights, National Urban League President Whitney Young stated what was emerging as a new consensus: “For years in the civil rights movement we said we did not want any new schools, we don’t want any new hospitals, we don’t want anything new in a Negro neighborhood because this reinforced the segregated pattern. What is our position now?” Young answered his own question by saying that he now only wanted quality schools and facilities in black neighborhoods.15

There was some pushback. Daniel Patrick Moynihan, an advisor to President Johnson (and subsequently to President Nixon) referred to the Model Cities program as “gilding the ghetto” and was an advocate within the administration of integration programs. He believed that if African American men could live where jobs were accessible, their unemployment would decline and families would be strengthened when black men could better contribute to support of their wives and children. The urban riots of 1967-1968 further demonstrated what an explosive threat the concentration of low-income and frequently jobless African Americans, encircled in ghettos by a suburban “white noose,” represented. The consensus temporarily shifted from support of ghetto-improvement to support of integrated (“fair”) housing. Hence, the Fair Housing Act.

In the first years of the Nixon administration, Secretary of Housing and Urban Development George Romney took steps to make integration of suburbs a priority, perhaps partly to distinguish himself from his Johnson administration predecessors. But political advisors eventually persuaded President Nixon that white opposition to integrating the suburbs would harm his re-election prospects in 1972, and Romney’s promotion of integration–by denying federal funds, for example, to suburbs that did not repeal zoning ordinances that prohibited multi-family housing–was abandoned.16 Subsequent administrations have continued efforts to gild the ghetto– “enterprise” or “empowerment” zones, for example, were popular for many years as efforts to lure jobs to ghettos by promising tax breaks to employers–but these efforts have had very limited success. Experience has shown that the revitalization approach on its own has been unsuccessful in remedying the segregation that Justice Kennedy so eloquently denounced.17 As the events in Ferguson, Baltimore and places between have demonstrated, the issues that bedeviled the Kerner Commission are with us still today.

Contemporary Federal Policy

Not only in Dallas, but nationwide, the LIHTC has been used more in fruitless attempts to shore up the ghetto than to disperse its inhabitants. Another federal housing initiative, the Housing Choice Voucher (“Section 8”) program that subsidizes the rents of low income, mostly minority households has also been used disproportionately to improve living conditions for African American families who remain in segregated neighborhoods.18 Landlords in middle class neighborhoods typically refuse to rent to voucher holders except in a few states and municipalities where such refusals are prohibited.19 The Department of Housing and Urban Development (HUD) also calculates the value of a voucher with a method that yields insufficient dollars to make middle class neighborhoods affordable, so vouchers are used predominantly in already segregated neighborhoods.

Justice Kennedy’s decision was strongest where he recapitulated the history of public support for racial segregation, and where he defined integration as a core purpose of the Fair Housing Act–he called integration the act’s “heartland.” But his decision was weakest where he speculated that disparate impact could be avoided by revitalizing ghettos as well as by supporting their residents in moves to higher opportunity neighborhoods. To capitalize on the strong part of Justice Kennedy’s opinion, advocates of integration can supplement the legitimacy of disparate impact analysis with reliance on another newly invigorated provision of the Fair Housing Act.

In addition to prohibiting discrimination or, by inference, prohibiting policies whose effect, or disparate impact, is to support segregation, the Fair Housing Act also requires every jurisdiction that receives HUD funds for any purpose to “affirmatively further fair housing” (AFFH). It is another euphemism, employed instead of a forthright statement that jurisdictions supported by HUD programs must “take aggressive steps to integrate.” This clause in the law has been inadequately enforced, at least since George Romney attempted to use it to justify his integration policies 45 years ago.

Since then, although the “affirmatively furthering” provision of the Act has been consistently interpreted by the courts to require pro-integration steps, HUD’s own enforcement of the provision has been inconsistent and weak. Enforcement improved somewhat during the first six years of the Obama administration, and now HUD is finally preparing to issue a rule clarifying how jurisdictions can comply with their AFFH obligations. The rule is weak in comparison to what the law demands, but strong in comparison to what has been attempted in the last 45 years.

The proposed rule requires jurisdictions to conduct a statistical assessment, with federal software and other help, of community resources and demographics, including the concentrations of disadvantaged populations, and to identify goals for the remedy of segregated conditions, of conditions inconsistent with the ideal of “fair housing.” The rule’s assumption seems to be that segregated jurisdictions want to do the right thing, but don’t have adequate information about their own demographics and resources to be able to do it. Giving suburbs around the country the benefit of the doubt in this respect may be a smart way to present AFFH obligations, but unsaid in the rule is what HUD proposes to do if and when suburbs don’t take the steps necessary to advance integration. Will federal funds actually be denied to white suburban communities that remain segregated? If so, will the Obama, or future administrations, resist the political backlash that, as during the Nixon years, will inevitably follow? Will the renewed awareness of our continuing racial divide, not only from Justice Kennedy’s opinion but from reflections after the murders in Charleston, give HUD more space to proceed?

In the wake of Justice Kennedy’s opinion, the AFFH rule may now have greater potential. With the Fair Housing Act now explicitly defined by the court as prohibiting racial segregation, HUD may have the wind at its back when it requires steps that affirmatively further integration. These should include, at a minimum:

• A ban on zoning ordinances that effectively prohibit multi-family housing
• A reform of the Section 8 program to give families the opportunity to leave ghettos for high opportunity neighborhoods–by increasing voucher amounts to realistic levels for middle class neighborhoods so families can rent apartments in multi-family buildings, even if those buildings are not subsidized by the LIHTC program; by providing counseling and other social supports for families willing to be integration “pioneers;” and by prohibiting landlords from refusing to accept families with vouchers
• And a prohibition on the use of the LIHTC program to locate additional low income residents in already segregated neighborhoods

Justice Kennedy’s opinion is a giant step forward. The proposed AFFH rule takes another step. The extent to which HUD and the courts will support civil rights groups like ICP when they attempt to climb these steps remains to be seen.

Richard Rothstein is a Research Associate of the Economic Policy Institute, a Senior Fellow of the Chief Justice Earl Warren Institute on Law and Social Policy at the University of California (Berkeley) School of Law, and a Contributing Editor of The American Prospect. His previous work on racial segregation and public education is posted at http://epi86dev.wpengine.com/people/richard-rothstein/. Readers may correspond with him about this article at riroth@epi.org.

Acknowledgments

The author gratefully acknowledges advice he received in preparing this article from Stephen Menendian, Assistant Director of the Haas Institute for a Fair and Inclusive Society at the University of California (Berkeley); from Board members of the Inclusive Communities Project Florence Roisman and Stacy Seicshnaydre; from Phil Tegeler, Executive Director of the Poverty and Race Research Action Council (PRRAC); and from John Paul Schnapper-Casteras, Special Counsel for Appellate and Supreme Court Advocacy at the NAACP Legal Defense and Educational Fund, Inc. Failure in some cases to heed their good advice, and errors of fact and interpretation that remain, are the sole responsibility of the author. Jenna Nichols provided research assistance. Harold Meyerson edited this article for The American Prospect.

Endnotes

1. Kerner Commission (National Advisory Commission on Civil Disorders). 1968. Report of the National Advisory Commission on Civil Disorders. Bantam Books, March, p. 8.

2. Kerner Commission (see note 1, above), pp. 1-2.

3. Kerner Commission (see note 1, above), pp. 2, 407.

4. Stacy E. Seicshnaydre. 2013. “Is Disparate Impact Having Any Impact? An Appellate Analysis of Forty Years of Disparate Impact Claims under the Fair Housing Act.” American University Law Review 63, December. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2336266

5. Seicshnaydre 2013. See note 4, above.

6. See, for example, Richard Rothstein. 2013. The Making of Ferguson. Public Policy at the Root of Its Troubles. The Economic Policy Institute, October 15.

7. Analysis by Stephen Menendian, Assistant Director, Haas Institute for a Fair and Inclusive Society, University of California (Berkeley).

8. Florence Wagman Roisman. 2015. “The Power of the Supreme Court’s Decision in the Fair Housing Act Case, TDCHA v. ICP.” Poverty and Race 24 (4), July/August, 17.The Poverty and Race Research Action Council.

9. Thurgood Marshall. 1949, “Memorandum to the President of the United States Concerning Racial Discrimination by the Federal Housing Administration.” February 1, p. 18. Proquest History Vault, NAACP Papers. Group II, Series A, General Office File, 1940-1955: Housing; Folder: 001521-009-0592

(Racial discrimination and FHA loan policies), Library of Congress (NAACP). (subscription required).

10. Rosalyn Baxandall and Elizabeth Ewen. 2000. Picture Windows. How the Suburbs Happened. Basic Books, p. 131.

11. Quoted in Mark Santow. In Press. Saul Alinsky and the Dilemma of Race in the Post-War City. University of Chicago Press.

12. Quoted in Santow, in press (see note 12, above).

13. Santow, in press (see note 12, above).

14. Frances Fox Piven and Richard A. Cloward. 1966. “Desegregated Housing. Who Pays for the Reformers’ Ideal?” The New Republic 255 (25), December 17; Frances Fox Piven and Richard A. Cloward. 1967. “The Case Against Urban Desegregation.” Social Work 12 (1), January.

15. Kevin Yuill. 1998. “The 1966 White House Conference on Civil Rights” The Historical Journal 41 (1), March: 259-282.

16. Mark Santow and Richard Rothstein. 2012. A Different Kind of Choice. Educational Inequality and the Continuing Significance of Racial Segregation. The Economic Policy Institute, August 22.

17. As an example of limited results, see this evaluation of an “empowerment zone” intervention in Baltimore: Stefanie DeLuca and Peter Rosenblatt. 2013. “Sandtown-Winchester–Baltimore’s Daring Experiment In Urban Renewal: 20 Years Later, What Are the Lessons Learned?” The Abell Report 26 (8), November.

18. Margery Austin Turner and G. Thomas Kingsley. 2008. Federal Programs for Addressing Low-Income Housing Needs. A Policy Primer. The Urban Institute, December. Table 3 (p. 5), and Table 4 (p. 7).

19. For a list of states with such prohibitions, as of March, 2015, see: Poverty and Race Research Action Council. 2015. “Expanding Choice: Practical Strategies For Building A Successful Housing Mobility Program. APPENDIX B: State, Local, and Federal Laws Barring Source-of-Income Discrimination.”