Racism has been perpetuated and institutionalized so effectively through housing policy that it is increasingly unbelievable that stability and wealth creation through homeownership is even possible for households who are not already in this privileged class. Black families are more than 16 times as likely as white families to experience multiple successive generations of poverty and Black adults are much more likely to fall into poverty than white adults. In this increasingly unequal context with diminishing chances of upward mobility, reparations are not a radical, divisive, antiquated policy long-shot; Reparations might be our last best chance to ensure that all industrious Americans, enabled by free-market institutions, have equal opportunity for material success: the American Dream.
Our home ownership systems have played a decisive role in creating the racial divides we see today. In the midst of the Great Depression, the National Housing Act of 1934 was passed with a clear plan to create thousands of new construction and trade jobs through a home building boom fueled by more accessible financial capital for aspiring home buyers. Thus, a vision for housing policy was born, one that makes homeownership available to the majority of the population. It’s a uniquely American vision of stability: In a country where we do not have a right to healthcare, higher education, or housing, we seek to design systems that make these necessities attainable for the majority of residents who are disciplined, able, and ambitious.
And white.
In the 20th century, racialized access to homeownership has perpetuated and widened racial inequality in America. In his 2017 book The Color of Law, author Richard Rothenstein lays out exactly how the Federal Housing Administration (FHA) explicitly pursued segregation and excluded households of color from homeownership opportunities. Through rulemaking, not Congress, the FHA required homeowners to include racially restrictive covenants that would prohibit white homeowners from selling to non-white households in the future. The Veterans Administration adopted some of these ”best practices” after World War II in the implementation of GI housing benefits, including the same underwriting standards that believed “incompatible racial groups should not be permitted to live in the same communities”.
Enforcing segregation throughout the country and excluding many non-white families from homeownership are only some of the ways that wealth creation has been off-limits for many households in most of the 20th century. The culmination of these housing rules, policies, and practices account for the deep wealth gap between white and Black families; The net worth of a typical white family is ten times greater than that of a Black family. The historic and systemic racism in our housing policies has meant that Black families don’t have the same access to home equity as their white counterparts, they have to go into more debt to go to college and care for ailing family members, and there is less to leave to their descendants when they die. To paraphrase Ta-Nehisi Coates’ iconic article “The Case for Reparations”, when Black Americans do get ahead in the face of all these barriers, it’s because they were twice as good and endured twice as much.
America is not making progress toward its meritocratic vision, but where housing policy has hurt in the past it could help in the future.
Since 1989 the late Representative John Conyers, and now Representative Sheila Jackson Lee, have introduced HR 40 Commission to Study and Develop Reparations Proposals for African Americans Act. In all these years the bill, which simply proposes to study the issue, has only ever once left committee. Congressional action is not a viable path, but Congress also didn’t create Redlining or mandate race-based covenants, and America doesn’t need their authorization to make progress on this critical issue. The array of federal agencies that regulate and shape housing in this county can study reparations, make recommendations, and move forward through administrative processes.
Under this executive administration, there is an opportunity to grapple with our past and set a new agenda based explicitly on the need to rectify the mistakes of our past. We can do this using the same mechanisms that built white middle-class wealth: housing. HUD Secretary Marcia Fudge can take up the mission of HR 40 and initiate a thorough review across the full spectrum of federal housing programs to identify racist policies, craft an agenda for a new anti-racist housing future, and identify ways that HUD can give non-white families advantages in achieving homeownership.
Seeking greater equality through administrative means is not wholly unprecedented. The Obama-era Department of Housing and Urban Development administration enacted rules to combat segregation, June HUD published a rule to require local governments to further fair housing, and in early September the Biden administration announced intentions to expand the role of Fannie Mae and Freddie Mac in affordable housing. These ideas are a good start to address critical flaws but HUD should more fully, and explicitly, implement the vision of HR 40. In doing so, the department could have an important public reckoning with its past and create a practical blueprint for a more equitable future.