In The Color of Law: A Forgotten History of how our Government Segregated America, author Richard Rothstein tackles the misconception that private prejudice coupled with private lending practices led to racial segregation in America. Instead, he contends that government policies—including lack of enforcement of the Fair Housing Act—promoted the patterns of segregation that still exist today. At the San Diego Regional Alliance for Fair Housing Conference, which took place in early April, Rothstein recommended four action steps to reverse housing segregation in the United States:
(1) Promoting the purchase of market rate homes by local government for sale at lower prices to populations affected by housing segregation
(2) Withholding mortgage interest deductions from communities that refuse to desegregate;
(3) Reforming low-income housing tax credits to promote development outside of low-income communities; and,
(4) Enhancing Section 8 vouchers to allow renters to live outside of low-income communities.
Promoting Local Government Purchase and Sale of Homes
To increase residential integration, Rothstein suggests local governments could buy homes in predominantly white neighborhoods and offer them at a subsidized price to households affected by housing segregation.
Withholding Mortgage Interest Deductions from Segregated Communities
Although the tax reform bill that passed last year downsized the mortgage interest deduction, it is still regressive, benefitting wealthier households more than others. The deduction subsidizes homeownership, redistributing wealth to richer households, and encourages the construction of larger, more expensive housing. Additionally, the government spends four times more on subsidies for mortgages than supporting renters or people who live in affordable housing. Rothstein suggested that communities that refuse to desegregate and continue to block low-income projects in their neighborhoods should have their mortgage income deductions withheld until residential integration in their community is implemented.
Reforming LIHTC to Develop Projects Outside of Low-Income Communities
Rothstein argues that federal subsidies such as the Low Income Housing Tax Credit program (LIHTC), which subsidizes the development of affordable housing, and Section 8 vouchers promote racial segregation in communities. A review of federal data by the New York Times found that in the nation’s largest metropolitan areas, low-income housing projects that use federal tax credits are disproportionality built in high poverty and high minority neighborhoods.
Enhancing Section 8 Vouchers
Many of the 2.2 million households that receive Section 8 vouchers remain in low-income neighborhoods and are unable to rent in more affluent areas. Rothstein proposes reforming these federal programs to remedy segregation, by improving the Housing Choice Voucher Program to allow low-income renters to live in middle income neighborhoods.
Whatever resolutions are proposed to address housing inequality, Rothstein argues that combatting deeply entrenched segregation will require a better public understanding that it is a result of decades of policymaking by local, state and federal governments. Only by accepting that segregation is a government-sponsored system can we create equally effective government policies to reverse it.
Artemis Spyridonidis covers housing policy issues, including structural solutions to the housing affordability crisis, consolidated plans, housing elements, accessory dwelling unit policy implementation, and regional issues across the state of California. For information about linkage fees and other housing policy issues, contact Artemis Spyridonidis, at email@example.com.