As Robert Reich states frequently in his Wealth and Poverty course at UC Berkeley, “laws create legacy”.
In June of 2015, the Supreme Court ruled that policies that segregate minorities into neighborhoods violate the Fair Housing Act and are unconstitutional, even if they were implemented unintentionally in the process of creating low-income housing. Although the decision was 5-4, the Supreme Court decided that actions that adversely affect minority groups through housing segregation work against the Fair Housing Act. In a statement, Justice Kennedy wrote that, “In striving to achieve our ‘historic commitment to creating an integrated society, we must remain wary of policies that reduce homeowners to nothing more than their race. The FHA must play an important part in avoiding the Kerner Commission’s grim prophecy that our Nation is moving toward two societies, one black, one white—separate but equal.”
The relevancy of this issue occurs right in Berkeley’s own backyard, as the distinctions between Piedmont and Oakland are increasingly evident. It is no coincidence that the 4 year dropout rate for Oakland school districts are 15% compared to the 0.5% dropout rate of Piedmont school district or that only 68% of Oakland graduates compared to 92% of Piedmont graduates met the UC/CSU course requirements in 2015-2016.
Due to the manner in which history is written and taught, it is easy to assume that visible racial segregation based on area occurs through individual choices or that racial segregation results from differences in income and wealth. In the current understanding, much of the geographic racial segregation is a result of the legacy that laws and regulations have created. In addition, geographic racial segregation largely contributes to the differences in income and wealth by race.
Our country, and even our community, faces the remnants of racial segregation. During World War I, the federal government built public housing designated for “whites only” in 170,000 units across America. During World War II, the federal government created housing around war industries but ensured that these housing resources were segregated. Richmond was one of the shipbuilding hubs and the population in the area grew from to 100,000 during the war efforts. Due to the expansion of population, the federal government created public housing, explicitly segregated. African American housing was poorly constructed with the intent as temporary housing while housing for white individuals was located further inland in nicer residential areas.
After the war, white-only suburbs were developed across the Bay Area and individuals of non-color were encouraged to purchase housing. In the 1949 Housing Act, Truman forbade integrated housing. Regardless of the 1954 Supreme Court ruling that stated the merits of equal but separate conditions were unconstitutional, housing segregation was not highly affected. The Federal Housing Administration and Veterans Administration refused to insure mortgages for African Americans in designated white neighborhoods like Stanford.
In 1954, one family in East Palo Alto sold a house to an African American family. As a panic response, Floyd Lowe from the Real Estate Association, quickly advised white families to place their houses on sale before a “colored invasion” occurred. In six year, the area became densely filled with 82% African American families. The conditions, however, were much worse than any other areas in Palo Alto and it is still what we recognize today as East Palo Alto.
While the Fair Housing Act of 1968 ruled out the illegal discrimination based on race under the Fair Housing Act of 1968, the legacy of prior laws remains through inferior public services, unresponsive local governments, and low tax bases. For those families that were unable to purchase houses, rental units do not obtain the benefits of mortgage interest deduction, property appreciation or capital gains when resold which are benefits that come with owning housing.
As of a report in 2014, the biggest contributor to the wealth gap was not an income gap but rather home equity and educational equity. Racial wealth gap far exceeds racial income gap (albeit which still exists), due to the legacy of who was allowed to own homes, in what areas and of what color. Geographic-based poverty perpetuates the occurrence of generational poverty. With the high IGE of the United States, there are indications that intergenerational wealth is currently very transmittable and that for those not within the realm of privilege, social mobility is quite low.
For those that are interested in reading more about the history of how our communities have continually engaged in geographic racial segregation and enforced the cycles of poverty, read The Color of Law: A Forgotten History of How Our Government Segregated America by Richard Rothstein. It is essential that we are informed on our history so that we, as the next generation, can shape the society into one closer to the ideal for every single individual.