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Understanding Fair Housing.Commission on Civil Rights, Washington, D.C.Feb 7323p.; Clearinghouse Publication 42Superintendent of Documents, U. S. GovernmentPrinting Office, Washington, D. C. (Stock Number0500-00092, $0.55)

MF $0.65 HC-$3.29*Civil Rights; Civil Rights Legislation; *EconomicFactors; Equal Protection; *Federal Laws; * HousingDiscrimination; *Housing Opportunities; HousingPatterns; Integration Litigation; IntegrationMethods; Law Enforcement; Property Appraisal; RacialDiscrimination; Real Estate; Residential Patterns

ABSTRACTFew rights are as basic as acquiring a home of one's

choice. The home and neighborhood are the environment in whichfamilies live and rear their children. For minorities, the homeusually means housing vacated by whites, who, because of their raceas well as ability to pay, are able to acquire a more desirabledwelling elsewhere. Congress, in 1968, incorporated fair housinglegislation into the Nation's body of civil rights law. Yet between1960 and 1970 residential segregation actually increased. That thehousing laws have not had an impact on reversing the patterns ofsegregated housing underscores the complexity of the denial of equalhousing opportunity to minority groups. Like other social problemsthat have deep roots in history, fair housing cannot be understoodwithout housing and residential segregation involve a variety ofissues. Many of these are legal in nature, involving the scope ofprotection against housing discrimination afforded by our laws andConstitution. Others involve fundamental questions of therelationship between Government and the people and how to strike theproper balance between protection of the rights of home seekers andthose of property owners. Still others involve practical questionssuch as the effect of racial integration on property values and therelative importance of economics and discrimination as factors thatdetermine where people live. (Author/JM)

UNDERSTANDING FAIR HOUSINGU.S. COMMISSION ON CIVIL RIGHTS Clearinghouse Publication 42 February 1973

U.S. DEPARTMENT OF HEALTH.EDUCATION & WELFAREOFFICE OF EDUCATION

THIS DOCUMENT HAS BEEN REPRO-DUCED EXACTLY AS RECEIVED FROMTHE PERSON OR ORGANIZATION ORIGINATING IT. POINTS OF VIEW OR OPIN-IONS STATED DO NOT NECESSARILYREPRESENT OFFICIAL OFFICE OF EDU-CATION POSITION OR POLICY

For sale by the Superintendent of Documents, U.S. Governme, 'hinting OfficeWashington, D.C. 20402. Price: 56 cents, domestic postpaid; 40 cents, GPO Bookstore

Stock No. 0500-00092

TABLE OF CONTENTS

INTRODUCTION

THE L'.'LlACY OF THE PAST3

FAIR HOUSING AND THE LAW

EQUAL HOUSING OPPORTUNITY ANDINDIVIDUAL PROPERTY RIGHTS

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RACE AND THE PROPERTY VALUE ARGUMENT11

RACIAL DISCRIMINATION AND ECONOMICSIS

PROSPECTS FOR THE FUTURE17

U.S. COMMISSION ON CIVIL RIGHTSThe U.S. Commission on Civil Rights is a temporary,

independent, bipartisan Agency established by Congress in 1957and directed to:

Investigate complaints alleging that citizens are being deprivedof their rights to vote by reason of their race, color, religion,

or national origin, or by reason of fraudulent prar;tices;Study and collect information concerning legal developmentsconstituting a denial of equal protection of the laws under the

Constitution because of race, color, religion, sex, or national origin;Appraise Federal laws and policies with respect to equal

protection of the laws because of race, color, religion, sex, ornational origin;

Serve as a national clearinghouse for information in respectto denials of equal protection of the laws because of race, color,

religion, sex, or national origin.Submit reports, findings, and recommendations to the President

and the Congress.

MEMBERS OF THE COMMISSIONRev. Theodore M. Hesburgh, C.S.C., Chairman

Stephen Horn, Vice ChairmanFrankie M. FreemanMaurice M. Mitchell

Robert S. RankinManuel Ruiz, Jr.

John A. Buggs, Staff Director

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EVTRoDUCTION

It is the policy of the United States to provide, withinconstitutional limitations, for fair housing throughoutthe United States.

With this preamble, Congress, in 1968, incorporatedfair housing legislation into the Nation-s body of civilrights law. Housing was the last of the major civil rightsareas to receive legislative attention from Congress. Yetequal housing is of overriding importance. It is a majordeterminant of the quality of life afforded to minorities.Its achievement is necessary for prcgress in other areasof equal opportunity. Above all, it is vital to the Nation'swell-being.

Few rights are as basic as acquiring a home of one'schoice. The home and neighborhood are the environmentin which families live and rear their children. Forminorities, the home usually means housing vacated bywhites who, because of their race as well as ability topay, are able to acquire a more desirable dwelling else-where. The neighborhood is often a deteriorating ghettoor barrio isolated from the rest of the community.

Housing is a key to improvement in a family's economiccondition. Homeownership is one of the important waysin which Americans have traditionally acquired financialcapital. Tax advantages, the accumulation of equity, andthe increased value of real estate property enablehomeowners to build economic assets. These assets canbe used to educate one's children, to take advantage ofbusiness opportunities, to meet financial emergencies, andto provide for retirement. Nearly two of every threemajority group families are homeowners, but less thantwo of every five nonwhite families own their homes.Consequently, the majority of nonwhite families aredeprived of this advantage.

Housing is essential to securing civil rights in otherareas. Segregated residential patterns in metropolitan areasundermine efforts to assure equal opportunity in employ-ment and education. While centers of employment havemoved from the central cities to suburbs and outlyingparts of metropolitan areas, minority group families remainconfined to the central cities, and because they areconfined, they are separated from employment opportuni-ties. Despite a variety of laws against job discrimination,lack of access to housing in close proximity to availablejobs is an effective barrier to equal employment.

In addition, "lack of equal housing opportunity decreasesprospects for equal educational opportunity. Thecontroversy over school busing is closely tied to theresidential patterns of our cities and metropolitan areas.If schools in large urban centers are to be desegregated,transportation must be provided to convey children fromsegregated neighborhoods to integrated schools.

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Finally, if racial divisions are to be bridged, equalhousing is an essential element. Our cities and metropolitanareas consist of separate societies increasingly hostile anddistrustful of one another. Because minority and majoritygroup families live apart, they are strangers to each other.By living as neighbors they would have an opportunity tolearn to understand each other and to redeem the promiseof America: that of "one Nation indivisible."

In addition to the Federal Fair Housing Law, TitleVIII of the Civil Rights Act of 1968, other laws existwhich ban discrimination in housing. President Kennedy'sExecutive order on equal opportunity in housing, issuedin November 1962, prohibits discrimination in housingwith funds obtained through federally assisted programs.Title VI of the Civil Rights Act of 1964 forbids discrimina-tion in a variety of federally assisted programs, includinglow-rent public housing and urban renewal. And the 1968decision of the Supreme Court of the United States inJones v. Mayer bars discrimination in all housing, publicand private. In addition, more than half the States andthousands of municipalities in the country have enactedfair housing laws.

But these acts have not reversed the pattern ofresidential segregation. Between 1960 and 1970 residentialsegregation actually increased. Some minority groupfam:lies are moving to the suburbs, but in far smallernumbers than white families. Many suburban blackfamilies merely exchange an inner-city ghetto for asuburban black enclave. That the housing laws have nothad an impact on reversing the patterns of segregatedhousing underscores the complexity of the denial of equalhousing opportunity to minority groups.

The Nation's problems of fair housing have not beenwidely discussed and their complexity is not understood.Slogans like "foicc-d housing" and "open housing" are usedas substitutes for rational analysis. Judgments of thecauses of housing segregation are often based onunsupported assumptions rather than on documentedevidence. There is not even common understanding ofthe statutory term, "fair housing" which Congress leftundefined. In short, the American people have not been wellserved by the public discussion of equal housing oppor-tunity.

The problems of discrimination in housing and residential segregation involve a variety of issues. Many of theseare legal in nature, involving the scope of protectionagainst housing discrimination afforded by our laws andConstitution. Others involve fundamental questions ofthe relationship between Government and the people andhow to strike the proper balance between protection ofthe rights of home seekers and those property owners.

Still others involve practical questions such as the effect ofracial inteaation on property values and the relativeimportance of economics and discrimination as factorsthat determine where peon; live.

These issues also involve fundamental questions of thekind of world we want our children to inherit_ The waswe resolve problems of equal housing opportunity will gofar in answering these questions. in determining whether wleave to future generations a racially divided or a raciallyunited country.

The U.S. Commission on Civil Rights is convinced thatthe problems of discrimination in housing and residentialsegregation can be resolved wisely and compassionately.It is essential that the American people be fully informedof the true nature of the issues involved. The Commissionspeaks out in the hope that it can shed light on theseissues and, by so doing. contribute to piblic understandingof what has been so grossly misunderstood.

Like other social problems that have deep roots inhistory, fair housing cannot be understood withoutunderstanding what that history has been. Segregatedpatterns of residency have not developed spontateously.They have been influenced by a variety of public andprivate forces. We begin by examining what those forceshave been and how they have contributed to the currentpattern of residential segregation.

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THE LEGACY OE THE PAST

Segreeation in housing has a long history. It is theresult of past discriminatory practices in which theprivate housing industry and Federal, State, and

local governments have been active participants. In theory,it is private partiesthe builder, the real estate broker,the mortgage lender, and the private ownerwho makethe decisions that determine where housing will be built,how it will be financed. and to whom it will be sold orrented. In practice. Government is a key participant inthese decisions. It controls most of the theoretically"private" decisions concerning housing. Government alsolends financial and other support to the supposedly`private" housing industry.

The home builder can build only in accordance withzoning laws, building codes, and other appropriate localordinances. The Federal Government offers the homebuilder the benefits of underwriting insurance throughFHA and VA programs, while holding the builder toprofessional construction standards. The real estate brokeris licensed by the State and is tied to an ethnical code inhis business relationships with home sellers and homeseekers. The mortgage lending institution is regulated byone or more State or Federal agencies and benefits fromFederal backing of the lender's accounts or deposits.Finally, the courts stand ready to enforce all contractualagreements in the sale or leasing of housing.

Of the elements included in the housing industry, the oneleast responsible for the development of the segregatedresidential patterns we have today is the privatehomeowner. Individual prejudice has been with us forgenerations, but as the Commission on Race and Housingpointed out some years ago: "It is the real estate brokers,builders. and the mortgage finance institutions whichtranslate prejudice into discriminatory action." Thehousing industry, aided and abetted by Government,must bear the primary responsibility for the legacy ofsegregated housing.

The Role of IndustryMost Americans are dependent upon private industry

to supply their housing needs. They rely on real estatebrokers to inform them of housing that is available. Theyrely on home builders to construct new housing or torehabilitate existing units. They rely on mortgage lendersto provide the financing necessary to purchase theirhouses. Traditionally, the private housing industry hasoperated on the assumption that residential segregation isa business necessity and a moral absolute. In the forefrontof those who established this tradition is the NationalAssociation of Real Estate Brokers (NAREB). Thosewho belong to NAREB are entitled to the exclusive useof the term "Realtor" and enjoy high prestige in the real

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estate profession. The membership of NAREB historicallyhas been nearly all-white.

In 1922, NAREB published a textbook entitled"Principles of Real Estate Practice." It was used to trainreal estate brokers. The textbook emphasized "thepurchase of property by certain racial types is very likelyto diminish the value of other property."

The next year NAREB published two additional texts.One book stated that black families were a threat to prop-erty values. The other text declared "foreigners" were themost undesirable type of residents. As late as 1950,NAREB's code of ethics stated in part:

The realtor should not be instrumental in introducinginto a neighborhod a character of property oroccupancy, met bers of any race or nationality orany individual whose presence will clearly bedetrimental to property values in the neighborhood.

To NAREB and its members the housing market wasreally two marketswhite and black; the white marketwas cultivated and the black market ignored. While thepolicies of NAREB have changed significantly over morerecent years, to the point where the organization nowsupports the Federal Fair Housing Law, the effects of itspast policies in fostering residential segregation remainwith us.

Private builders, while not as outspoken on the necessityof residential segregation as members of NAREB, never-theless, acted in accordance with the separate marketprinciple. Thus in the post-Second World War housingboom of the 1940's and 1950's, giant subdivisions werebuilt from which minority families were excluded. Theonly new housing available to minorities consisted of acomparatively small number of units located in minorityenclaves and designated for minority occupancy. .

Mortgage lending institutions played the role of "silentpartner" in establishing and maintaining a racially separatehousing market. At best, lending institutions acquiescedpassively in the discriminatory practices of the buildersand the brokers with whom they did business. At worst,they refused to finance builders who wanted to providehousing on a nondiscriminatory basis or to make loansavailable to home buyersblack or whitewho desiredto purchase housing in integrated neighborhoods. Theirdefense for these policies was twofold: first, that integratedhousing was an unsound investment; and, second, that tofinance such housing would antagonize valuable customers.

The policies of home builders and mortgage lenders,like those of NAREB, have changed in recent years. Theynow support the principles of fair housing. But the effectsof their past discriminatory policies persist.

The Role Of State And Local GovernmentsState and local goygovernments were active participants in

establishing residential segregation. In some cases. theyoutstripped private industry in their insistence on racialexclusiveness by adopting laws to assure it. Early in the20th century. many American communities enacted zoningordinances requiring block-by-block racial segregation.Between 1910 and 1917, these racial zoning ordinancesv;ere upheld in more than 15 State couTts. In 1917,however, the Supreme Court of the United States, inBuchanan v. Warley, declared these ordinances unconstitu-tional. Despite this ruling, racial zoning ordinances weremaintained in many communities and legal attempts toenforce them in the courts were still being made as lateas the 1950's. Moreover, the racial zoning ordinance wasonly one means by which the State could insist on housingsegregation. Following the Buchanan decision, anotherexclusionary device came into widespread usetheracially restrictive covenant_

The convenant was a written agreement in which thebuyer of a house promised not to sell, rent, or transferhis property to families of a specific race, ethnic group,or religion. A typical covenant read in part:

... hereafter no part of said property or any portionthereof shall be . . . occupied by any person not ofthe Caucasian race, it being intended hereby torestrict the use of said property against theoccupancy as owners or tenants of any portion ofsaid property for resident or other purpose by peopleof the Negro or Mongolian race.

The restrictive covenant became so fashionable that in1937 a leading magazine of nationwide circulationawarded 10 communities a "shield of honor" for anumbrella of restrictions against "the wrong kind of people."By 1940, according to a magazine article, 80 percent ofboth Chicago and Los Angeles carried restrictiveconvenants barring black families.

Although the covenants were private agreements, theyachieved the status of law through enforcement by thejudiei.al machinery of the State. In many cities, neighbor-hood improvement associations were formed to makecertain the residents of the community either honoredthe convenants or were sued in the State court if theydid not. For 30 years, the covenants were enforced. In19 States, they were challenged and were held to be validand enforceable. But in 1948, the Supreme Court of theUnited States, in Shelley v. Kraemer, ruled that enforce-ment of racially restrictive convenants by State courtswas a violation of the Constitution. Despite this ruling, thepopularity of racially restrictive covenants continuedand, although unenforceable, they are sometimes includedin real estate contracts and deeds today. Moreover, thepatterns of residence they helped create during theirheyday still persist.

Less obvious uses of State and local governmentalauthority have contributed to housing segregation. The

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authority of local governments to decide on buildingpermits. building inspection standard;. and the locationof sewer and water facilities have been used to discourageprivate builders willing to provide housing on a non-discriminatory basis. The power of eminent domain.which authorizes Government to acquire private propertyfor public use, has ten used as a ploy to keep blackfamilies from moving into all-white communities. Learningthat a new housing subdivision is intended for interracialoccupancy. some communities decide the land is neededfor public purposes and acquire it through eminent domain.

The Role Of The Federal GovernmentUntil the 1930's the Federal Government was not

actively engaged in the housing field. When it did enterthe field, the discriminatory policies and practices of thehousing industry were firmly established. The FederalGovernment, with its new programs of housing assistance,had an opportunity to alter the policies and practices of thehousing industry. But it did not. Instead, Federal policyin housing reflected the policy of the private housingindustry. The legislation establishing the new program.,and new Agencies was influenced by the lobbying of thehousing interests. Federal housing agencies were staffedby industry representatives and, as a result, thediscriminatory practices of the industry became establishedFederal policy.

For example, the policies of the Federal Home LoanBank Board (FHLBB), created in 1932 to give assistanceto savings and loan associations, were influenced by thesavings and loan industry, which strongly advocatedracial segregation. An example of that influence wasevident in 1940. In that year, the FHLBB's Division ofResearch and Statistics publis-.ed articles on howneighborhoods were to be rated. The neighborhoods whereminority groups lived were to be given low ratings, whilewhite neighborhoods were to be given a high rating.

In 1933, the Government created the Home OwnersLoan Corporation (HOLC). Its function was to assist therefinancing of small home mortgages in foreclosure duringthe Great Depression. The enormous help which HOLCprovided American families saved many from financialruin. In its first 3 years of operation, the Agency financedmore than one million homes. The Agency was of littlehelp to nonwhite families because it adhered to a policyof residential segregation. When IIOLC acquired housesin white neighborhoods and offered them for sale, blackfamilies were not permitted to buy them. When it madeloans its policy was to do so only if the loans were usedto buttress racial segregation. According to the 1940Housing Census, fewer than 25,000 of more than onemillion homes refinanced by HOLC went to nonwhites.

In 1934, the Federal Housing Administration (FHA)was established. The FHA mortgage insurance programwas created to protect the mortgage lender from financialloss caused by the inability of the harrower to pay off themortgage. This was an incentive to induce the lender tomake money available for housing construction. FHA

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quickly became a leader in the housing and home financeindustry and contributed to many changes in the practicesof home financing. As a result of FRA"s leadership_ thetypical home financing vehicle the long-term. low-interest,high-loan-to-value. fully arnoi-,ized loanwas establishedin the housing field.

For nearly 13 years. FHA-s Underwiit:ng Manualwarned of the infiltration of "inharmonious racial groups.-The Manual stated: -If a neighborhood is to retainstability. it is necessary that properties shall continueto be occupied by the same racial classes." Indeed. FHAwas responsible for the widespread use of racial covenantsfollowing its creation. One noted authority on housingcharacterized FHA during the thirties and earl fortiesas "a sort of 'Typhoid Mary' for racial covenants."Another authority described FHA policy as "separatefor whites and nothing for blacks.- As late as 1959, itwas estimated that less than 2 percent of the FHA-insuredhousing bet in the post-war housing boom bad beenavailable to minorities.

As with other Federal Agencies created during the1930's, FHA filled many ,of its key staff positions inWashington. D.C. and in the field offices with representa-tives of the housing industry associated with racialsegregation. When restrictive covenants were held legallyunenforceable in 1948. civil rights groups. joined by theUnited States Attorney General, brought pressure on FHAto reverse its policy and to stop insuring properties withrestrictive covenants. Eighteen months after the SupremeCourt decision FHA agreed. The new FHA policy ofrefusing to insure mortgages on properties carrying aracial covenant applied only to covenants filed afterFebruary 1950. This left the accumulation of the first 15years of FHA-insured mortgages protected by thecovenants on thousands of homes untouched.

The patterns of racial residence we have today are alegacy of the past, in which discrimination, not choice orability to pay, has been the principal factor that determineswhere minority families live. It is a national history inwhich Government and private industry came together tocreate a system of residential segregation. Residentialsegregation is so deeply ingrained in American life thatthe job of assuring equal housing opportunity to minoritygroups means not only eliminating resent discriminatorypractices but correcting the mistakes of the past as well.

FAIR HOUSLNG AND THE LAW

The legacy of the past has made it difficult to achieveequal housing opportunity through the processesof law. But there is a substantial body of law,

through Presidential Executive orders. congressional action,and covistitutional case law, that establishes fair housing asthe law of the land. These laws, if enforced, can contributeto the achievement of fair housing in fact as well as in legalprinciple.

As in other areas of the national civil rights concern,the judiciary has pointed the way for the Nation. TheSupreme Court of the United States, in the 1917 Buchanancase, prohibited. on constitutional grounds, local govern-ments from requiring residential segregation_ This rulingis noteworthy because in 1896 the Supreme Court hadestablished the doctrine that legally compelled segregationin such areas zts public transportation and public educationwas constitutionally permissible. The Buchanan decisiondestroyed the doctrine as it applied to housing. Again in1948, in Shelley v. Kraemer, the Supreme Court struckdown as unconstitutional the legal enforcement of raciallyrestrictive covenants.

As the Court was handing down its decisions, theexecutive branch, through FHA and other FederalAgencies, was actively supporting residential segregation.Congress was silent.

The executive branch of the Government took fairhousing action for the first time in 1962, when PresidentKennedy issued ;An Executive order on equal opportunityin housing. While it represented a significant legal stepforward, his Executive order was limited. First, itsguarantee of nondiscrimination was restricted largely tohousing provided through the insurance and guarantyprograms administered by FHA and its sister agency,the Veterans Administration (VA). But most of theNation's housing is financed through "conventional"(non-FHA or VA) loans, made by private lendinginstitutions. Housing financed through conventional loanswas not covered by the President's order,

Second, the order applied only to FHA and VA housinginsured or guaranteed after the date of the order's issuance(November 20, 1962). It left hundreds of thousands ofexisting housing units receiving FHA and VA assistanceimmune from the requirement of the nondiscriminationmandate. Barely 1 percent of the Nation's housing wascovered by President Kennedy's Executive order.

In 1964, Congress enacted Title VI of the Civil RightsAct of 1964, prohibiting discrimination in any program oractivity receiving Federal financial assistance. Among theprincipal programs affected by this law were low-rentpublic housing, a program directed to providing housingfor the poor, and urban renewal. Like President Kennedy'sExecutive order, Title VI excluded conventionally financed

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housing. Title VI also excluded most FHA and VAhousing. which the Eexcutive order covered. Less thanhalf of 1 percent of the Nation's housing inventory wassubject to the nondiscrimination requirement throughTitle VI.

In 1968. Congress enacted Title VIII of the Civil RightsAct of 1968. the Federal Fair Housing Law. This lawprohibits the discriminatory practices of all real estatebrokers. builders. and mortgage lenders. Discriminationin advertising and "blockbusting" (a method by whichfamilies are induced to sell their homes throughrepresentations that their neighborhood is to be inundatedby minority families) are prohibited. Houses sold w:thoutthe aid of public advertising or a broker, and rooming housesin which the owners live (the so-called "Mrs. Murphy"exemption) are excepted under Title VIII. Today, morethan 80 percent of all housing is subject to the require-ments of the Federal Fair Housing Law.

In June 1968, 2 months after enactment of Title VIII,the Supreme Court of the United States, in the landmarkcase of Jones v. Mayer, ruled that an 1866 Civil Rightslaw passed under the authority of the 13th amendment(which outlawed slavery) bars all racial discriminationin housing, private as well as public.

By 1968 an arsenal of Federal laws prohibited housingdiscrimination. Taken separately, each of the laws hasweaknesses to counterbalance their strengths. PresidentKennedy's Executive order and Title VI have strongenforcement mechanismsthe threat that Federal fundswill be withdrawn from those who practice discrimination.But this applies to barely 1 percent of the housing market.Title VIII and the Supreme Court decision in Jones v.Mayer, although they provide wide coverage of thehousing market. have weak enforcement powers, limited tolitigation and voluntary compliance.

Taken together, however, these laws provide the basisfor a comprehensive effort to establish fair housing as afact of American life. Of major importance is that TitleVIII directs all Departments and Agencies, including theDepartment of Housing and Urban Developm.mt (HUD),to administer programs and activities relating to housingand urban development "in a manner affirmatively tofurther the purposes of [fair housing]." Agencies havegiven little attention to this provision and have failed touse the leverage of their financial assistance programs toassure compliance with the Federal Fair Housing Law.Even in programs subject to the Executive order or TitleVI, where the sanction of fund termination is required, ithas rarely been used. Only a few of the FHA-aidedbuilders, covered under the Eexcutive order, have beendebarred by FHA, even in the most blatant cases ofdiscrimination. A survey of houses with minority group

occupancy conducted by FHA illustrates the limitedsuccess achieved under the Executive order. In July 1967,FHA Insuring Office Directors conducted a survey ofFHA subdivisions built after the date of PresidentKennedy's order. Of the more than 400,000 housessurveyed, only 3.3 percent had been sold tc; black families.

The penalty for violation of Title VI, withdrawal ofFederal funds. has never been used by HUD in cases ofdiscrimination. In public housing the history of HUDacquiescence in discriminatory assignment of tenants andselection of sites has contributed to the segregation andisolation of low-income, minority group families. Federalcourts have found HUD guilty of continuing to condonethese practices in violation of Title VI. the Federal FairHousing Law, and the Constitution of the United States.

In urban renewal, v.hich involves the displacement offamilies from slum areas, three of every five familiesdisplaced as of June 1970 were rninorit group members.It is with some justification that minorities, who sufferunder this program in the name of urban progress, referto urban renewal as "Negro removal." Here, too, courtsuits have been necessary because of HUD's failure toapply equal opportunity requirements. In December 1971,a Federal court in Detroit found HUD to be a party to theremoval of a large number of black families from the cityof Hamtramck, Michigan.

In other programs the courts have had to require HUDto consider fair housing goals in administering its housingprograms. In Shannon v. HOD, a United States court ofappeals in December 1970 found that HUD had approvedthe construction of a low-rent housing project in Philadel-phia, under the rent supplement program, which servedto increase the concentration of minorities in the area.In the face of protests by black and white residents,businessmen, and representatives of civic organizations,HUD, nevertheless, had granted the funds and permittedthe project to be constructed. The court ruled that HUDhad unlawfully failed to consider the racial impact ofthe project in approving it.

Title VIII was nearly 4 years old before HUD started tocoordinate it housing programs with the provisions of thenew law. In early 1972 it adopted regulations establishingcriteria for the selection of sites for subsidized housingaimed at assuring locations outside areas of existingpoverty and minority concentrations. HUD also adoptedregulations requiring FHA-aided builders and deve:opersto develop plans for affirmatively marketing their houses tominority families, long denied equal accesrl to FHAhousing. In addition, HUD, together with the GeneralServices Administration, established criteria for theselection of sites for Federal installations aimed at securingan adequate supply of low- and moderate-income housing,available on a nondiscriminatory basis, in communitieswhere Federal Agencies locate.

The principal mechanism HUI", has relied upon inenforcing Title VIII is the processing of housingcomplaints, which is the least effective way to enforce thelaw. Families that complain of housing discrimination

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cannot be assured of immediate relief. HUD has a backlogof housing complaint ; and the average time for theprocessing of a complaint is 5 months. In some cas,..--s. HUDrefers the complaints to State and local civil rights agenciesfor investigation. But it is unable to r initot its referralsbecause of the backlog of housing grievances.

Federal policy on housing discrimination has changedmarkedly from what it was 30 years ago but its practicein carrying out the new policy has not changed to thesame extent. Commenting on the current posture of theFederal Government, the U.S. Commission on Civil Rightsconcluded last year:

the zeal with which Federal officials carried outpolicies of discrimination in the early days of theGovernment's housing effort has not been matchedby a similar enthusiasm in carrying out their currentlegal mandate of equal housing opportunity. Housingdiscrimination and residential segregation. which theFederal Government helped to foster, remain a fact oflife in the Nation's metropolitan areas.

EQUAL ',HOUSING OPPORTUNITY ANDINDIVIDUAL PROPERTY RIGHTS

If Government's previous policies and practices infavoring housing segregation were reprehensible.the question remains how far should Government

go in correcting the mistakes of the past? To the extentthat Government intervenes on the side of protecting theminority home seeker, does that intervention impair therights of private property owners? Traditionally a person'shome has been a place of refuge. and Government shouldnot lightly intrude upon the owner's dominion over it.Some cc atend that the proper role for Government toplay. clespite the experience of the past, 15: not to redressthe housing imbalance it helped to create, but to leavepeople alone and permit 'the forces of the market place tooperate freely.

These concerns are based on the assumption that variouslaws of the judicial. executive, and legislative branches ofthe Federal Government have reduced the rights of in-dividual property owners in favor of furthering the rightsof minority group home seekers. To what extent is thistrue? Do those laws shift the balance in favor of homeseekers so as to impair the rights of the individual propertyowner? Let us examine the effect of these various Federallaws.

BUCHANAN v. WARLEYThe 1917 Supreme Court decision in Buchanan v.

Worley held that a zoning ordinance maintained by thecity of Louisville, Kentucky, requiring block-by-blockresidential segregation, violated the Constitution. In thatcase, there was a willing buyer and a willing seller. It wasthe State, through the zoning ordinance, that sought toprevent the sale. The Court's decision, far from under-mining the rights of an individual property owner, wasa vindication of the owner's right to sell his propertywithout interference from outside parties: in this instance,the State.

SHELLEY v. KRAEMIER

By the same token, tile Supreme Court's ruling in Shelleyv. Kraemer that judicial enforcement of racially restrictiveconvenants was unconstitutional also supported the right ofprivate sellers and buyers to engage in a real estatetransaction free from outside interference. In thii case, thecontract of sale was freely executed by the seller and buyer.Adjoining property owners sought to prevent the sale bycalling upon the courts to intervene on the basis of therestrictive convenant. That, the Supreme Court ruled, theState courts could not do. Again, the Court rulingsupported the rights of each home buyer and home-owner. No conflict existed.

Executive Order And Title VI

The Executive order on equal opportunity in housingand Title VI, which require nondiscrimination in the

operation of federally assisted housing programs. presenta case in pain: where Federal intervention does restrictthe rights of property owners. Under the Federal housingprograms covered by these two laws, Federal financialassistance is made available to builders and mortgagelenders for the purpose of stimulating mortgage creditand the construction of housing to meet the needs of thepublic. Participation in these programs is voluntary.Under the Executive order of Title VI. industry membersare required to be nondiscriminatory as a condition ofparticipation in the programs. In short, the Executiveorder and Title VI assure that the Federal Governmentwill not support housing discrimination with its financialassistance. In law and good conscience, the FederalGovernment could nor do otherwise. As one courtannounced in considering the constitutionality of racialdiscrimination by an FHA-aided builder:

When one dips one's hand into the Federal Treasurya little democracy necessarily clings to whatever iswithdrawn.

TITLE VIII AND JONES v. MAYERThe Federal Fair Housing Law (Title VIII) and the

Jones v. Mayer decision raise the most serious questionof conflict between the interest of Government to protectthe right of free choice for minority home seekers and theinterest of property owners to exercise full control overtheir property. Under the Executive order and Title VIthe prohibition against discrimination applies to thosebuilders, brokers, and mortgage lenders, who voluntarilyseek to participate in Federal programs. Under theselaws, the "right" of property owners to discriminateis curtailed if they choose to subject themselves to Govern-ment regulation by participating in Federal programs. Butunder Title VIII and Jones v. Mayer, the requirement ofnondiscrimination applies virtually across-the- board---to those who participate in Federal programs and to thosewho do not. Without question, Title VIII and the Jonesdecision represent a restriction on the pre-existing rightsof property owners. Additional questions must be asked,however, to understand the nature of this reztriction andto determine whether Title VIII and Jones represent aproper balance between the rights of property owners andhome seekers.

First, regarding Title VIII, against what parties is thatlaw aimed? Nearly all of the provisions of the Fair HousingLaw are concerned with the practices of the housingindustrybuilders, real estate brokers, apartment houseowners, and mortgage lenders. The individual homeowneris also affected, but only insofar as the services of a brokeror public advertising are used in the sale or rental of his

4-111111gr,

fly,

house. If the owner chooses to dispose of the propertypersonally, without the use of a broker or publicadvertising, that person is exempt from the law. Further-more, the resident owner of a rooming house is exemptfrom the statute. In short, the housing and home financeindustry, and not the individual property owner, is theprincipal target of Title VIII.

Second, what rights traditionally associated withhomeownership are restricted by Title VIII? Those in thebusiness of housing and home finance (against whom theFair Housing Law is principally aimed) are not home-owners in the traditional sense. Real estate broke.s andmortgage lenders typically do not own the houses orapartments Ung sold or rented, They render a servicein the form of bringing buyers and sellers together orproviding funds for the purchase of property. To the extentthat members of these two industries do own property(whether through real estate speculation or mortgageloan foreclosure) their sole interest is placing theproperty on the market for a quick turnover. Buildersof subdivisions do own property. But again, their interestis in disposing of the houses they build as quickly and asprofitably as possible. Owners of apartment houses alsoown property, often retaining ownership for many years.Typically, apartment house owners are not individualsbut corporations; and their interest is in profit notresidence.

Together these members of the housing and homefinance industry control the housing market and candictate where people are to live, It is to this industry thatTitle VIII is primarily directed. In this sense, Title VIIIis within the established tradition of 'Governmentregulation of private industry in the interest of protectingthe rights of the public. Furthermore, the restrictionsimposed by Title VIII do not limit the use members ofthe industry may make of property. But it does curbtheir power to dictate, on the basis of race and color, wherepeople shall live.

How does Title VIII affect the individual homeowner?Most of the rights generally associated with homeowner-ship remain unimpaired by Title VIII. Y.f a homeownerchooses not to sell or rent his home the fair housing lawdoes not apply at all. If the homeowner chooses to sell orrent Without the services of a representative of the housingindustry, he or she is free to act on any basis, includingracial discrimination. But if the services of a real estatebroker or newspaper advertising are employed, theprovisions against discrimination contained in Title VIIIare applicable.

Homeowners, while not the principal target of the FairHousing Law, nonetheless are affected because mosthomeowners use the services of a real estate broker orpublic advertising in selling their houses.

Moreover, the Jones v. Mayer decision, holding thatan 1866 Civil Rights Law barred all racial discriminationin housing, by private as well as public parties, affects theprivate homeowner even more directly whether the services

10

of a broker or public advertising are employed or not.Btu Title VIII and the Jones case apply only when home-

owners decide, of their own free will, that they wish todispose of their private property to those who will meettheir terms. They state, in effect, that they do not wishto live in their home any more, that they want dollarvalue in exchange for their property, Title VIII andJones require minority purchasers or renters be giventhe same consideration as others who are willing to meetthese terms.

Title VIII and Jones restrict the rights of homeOwners.That is not new. No one has an absolute dominion overthe property he owns. Property restrictions are imposed inthe public interest: Zoning laws regulate the use ofproperty. Building codes set standards of construction withwhich homeowners must comply. Other requirementsdictate the size of houses. The restriction placed upon thehomeowner by these two laws are mild in relation to otherhousing regulations.

Property rights have never been absolute. Traditionally,they have been subject to modification to accommodateother rights in the public interest. Title VIII and Jonesare within that tradition. They represent, not an under-mining o;: traditional property rights, but a means toredress an historical disadvantage that has restrictedminof:ty groups from competing on equal terms withwhites in the housing market. In the Commission's view,the balance that these laws strike between the interests ofhomeowners and home seekers is historically just, legallysound, and morally right.

RACE AND PROPERTY VALUE ARGUMENT

The cornerstone of the separate housing market is theconviction that the entry of black families into aneighborhood is followed by a drop in property

values. The fear of financial loss generated by this convic-tion is the most frequent reason advanced for the exclusionof racial minorities from a neighborhood. For the averagehomeowners his home is a major investment; and for thereal estate investor, the value of his property is a legitimateconcern.

Origins

Although the origin f the r :rty value argument isnot known, as early as 1,) , st_ , al States and cities usedit as justification for legislating racial zoning ordinances.The professional literature of the real estate industrycontinued to perpetuate the myth of the property valueargument. As one textbook stated the argument:

The colored people certainly have a right to life,liberty and the pursuit of happiness but they mustrecognize the economic disturbance which theirpresence in a white neighborhood causes and foregotheir desire to split off from the established districtwhere the rest of their race lives.

Journals of real estate appraisal in the 1930's advocatedan "intensive study" of the "presence or intrusion ofdiscordant racial groups" in the neighborhood as animportant consideration to 'be used when appraising ahouse. NAREB's Code of Ethics specifically warned ofthe "racial group" threat to property value, as did theFederal Government in its FHA Underwriting Manual.Lending institutions followed suit. All were convinced a"mixed" neighborhood would endanger long term financingof an area because of decreased property values. As onesavings and loan official stated in the 1950's: "We makeloans to colored in established areas only. If they wereintroduced in a new area, property values would fall 50percent." In 1950, one researcher noted, after studyinghundreds of items and examining the content ofprofessional courses offered on the subject of appraisingand real estate generally, that he had uncovered littlematerial that deviated from or disputed the views of thereal estate industry.

By the 1950's the opinion of the real estate industrybegan to change. NAREB changed its Code in 1952,and professional articles urged the industry to reconsiderthe generalizations regarding the effects of "infiltration"by blacks on property values in an area. Some real estateprofessionals admitted that race might be only one factor,or that racial integration could have a positive effect onreal estate values. An appraiser urged his profession to"approach the problem without prejudice." He recognizedthat it would be difficult. "We have been brought up,"

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he said, "with deeply ingrained emotional feelings," on theissue of race. As late as 1961 the Federal Agencies thatsupervise the Nation's mortgage lending institutions stillheld the view that minority groups moving into a neighbor-hood could be the cause of a decline in property values.

Myth And ilealityThe fact is: there is no substance to the view that

minority group residency inevitably leads to a decline inproperty values. The objective factors affecting propertyvalues have no relation to race at all. They depend uponthe condition of the housing market and include a clusterof elements, such as the age and condition of the housing,the under-or-over supply of certain house styles, theprice range of the housing, zoning changes, the under-or-over development of a neighborhood, and changes inneighborhood amenities.

Studies made in the last 20 years rarely have concludedthat property values decrease whcn blacks move into apreviously all-white arca. They support the finding thatrace has little effect on values and that racial integrationis generally associated with stable and even increasedproperty value. A study completed in Louisville, Kentuckyin 1966 showed that of the sales of 183 houses in"changing" neighborhoods, 91 houses showed an increasein value, 73 houses showed no change in the value of theproperty. and 17 houscs decreased in value. Another studyin Plainfield, New Jersey 2 years liter found that propertyvalues in a neighborhood that underwent a racial changeshowed the same upward trend in prices as the comparableall-white arca. Other studies have drawn similar conclu-sions. Thcsc studies have been conducted in San Francisco,Philadelphia, Chicago, Detroit, Kansas City, Houston, andBaltimore.

The Self-Fulfilling ProphecyExperience suggests that when the forces of the housing

market operate freely, minority group place of residencedoes not result in property value instability, and thetraditional belief about the relationship between race andproperty values is a myth. When this myth becomes thebasis for action, however, the economic forces of thehousing market can become so distorted as to make themyth a reality.

Appraisers play an important role in this process. Theyset the "value" on residential property for sale or forpurposes of investment. As a profession, appraising ischained to the real estate industry and appraisersfrequently share the same beliefs and traditional attitudesregarding race and property values as Realtors. Anappraiser's professional opinion of a piece of propertyincludes the social and economic trends of a neighborhood.He considers race as a factor, if he believes the entry ofblacks into the area will affect the stability of the neighbor-

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hood. Consequently, his judgment of "value- is similarlyinfluenced.

White residents of a neighborhood into which a blackfamily has moved may create the problem they fen most,a decrease in property value. If a number of whitehomeowners list their homes for sale because of a blackfamily's presence, others may follow. and a panic to sellis underway. The fears of the residents may materializebecause they have overtaxed the market and prices muttbe lowered to attract buyers to balance the unusually largenumber of sellers. Their own actions have caused theirfears to be realizeda "self-fulfilling" prophecy.

Blockbusters

Indeed, white residents do have something to fearnot black families moving into a neighborhood, but theunscrupulous "blockbusters" and speculators who feedupon those fears. The worst of these speculators solicitlistings of houses for sale, deliberately inciting panic andwhite flight, to buy property at very low prices and re-sellto blacks at very high prices. This is now illegal, but thepractice continues and homeowners are panicked intoselling their houses instead of standing firm and refusingto cooperate with the speculators.

Mortgage Lenders

The financing of home purchase and improvement iscrucial to the stability of property values in an area.The availability of loans is influenced by the lenders'attitude toward race and property value. The practice of"redlining" by lenders [the refusal to make any loans ina particular area] can be the cause of decreasing propertyvalue. A study by the National Urban League in 1971found that in five major cities, the neighborhoods thatunderwent a racial change in the 1950's faced a withdrawalof home financing and insurance. The result was adeterioration of the neighborhood and, finally, anabandonment of the area.

In Chicago and Cleveland where "blockbusting" wasused, black buyers were sold houses at inflated prices.These were the same houses that former white owners werepanicked into selling at low prices. The black buyers,unable to obtain regular loans were left with impossiblecommitnientstwo mortgages, high interest rates, landcontracts (under which they accumulate no equity andstand to lose the house if they fail to continue payments),and no capital with which to repair or improve theirhomes.

l'rt Si. Louis, mortgage lenders freely admitted to shuttingoff housing fund; to large areas of the city except in thewhite neighborhoods. But in Atlanta and Detroit, alsostudied by the Urban League, lenders continued to makemortgage loans and home improvement monies available.Blacks were able to maintain homeownership and the"value of property that had undergone a racial transforma-tion in the two cities remained stable.

Minority Housing. Need

Finally, there is another phenomenon affecting the

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value of property. Since minorities face a restrictedhousing market because of racial discrimination, theirdemand for housing tends to he high in.areas that become"open" to them. After one or more minority families havebeen able to buy or rent in a previously white neighbor-hood, the demand by other minority families for housingin the same neighborhood may grow, thereby increasingthe price of housing. Sometimes the rise in price istemporary and values fall back to a level commensuratewith the original value of the property. At other timesprices remain high, especially if the minority familiesmoving into the area have higher incomes than theprevious occupants.

There is no inevitable relationship between race andproperty values, But When the normal forces of thehousing market are artitically manipulated the race-prOperty relationship may be created. When areaspreviously closed to minorities are opened, the level ofprices rise; and when white homeowners are induced tosell in panic, prices decline. In either case, only thosewho artifically manipulate the market gain from the riseand fall of property value. Minority hayers, excluded fromdecent housing, pay a premium for housing in neighbor-hoods that are "open". White residents who panic and sellassure by their action that property values will fall. Theirfears are realized.

0'

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e-s

11111.11"1.1111.1.11111aliRACIAL NCRIMINATION AND ECONOMICS

The myth of the relasionship between race and housingproperty value persists. Today, it is expressed in adifferent form. Because of the civil rights laws

enacted over the last decade and a half, racial discrimina-tion has gone largely underground. Open statements ofracial prejudice are rarely made by persons in positions ofresponsibility in public and private life. Members of thehousing industry and public officials seldom argue publiclythat the entry of black families into a neighborhoodnecessarily causes it to deteriorate. 'I he property valueargument is veiled and couched in terms of the effect low-income families will have upon property values in aneighborhood. In many communities, particularly whitesuburbia, measures are taken to exclude these families.Ordinances re enacted to require the zoning of largelots. Minimum square footage requirements are steppedup. Building codes that unnecessarily increase the cost ofconstruction are tightened. And residential property isconverted into public use. These measures are enacted toprevent the construction of low- and moderate-incomehousing, some of which minority families could occupy.The communities argue that their opposition to low- andmoderate-income housing has nothing to do with race, onlywith economics.

Similarly, public and private housing officials explainthe absence of minority group families from newsuburban ams as a consequence of economic, not racial,barriers,. The homes are too expensive for blacks, theyexplain, and the rents are more than blacks can afford.

Economics helps to explain why minority families aremore poorly housed than members of the white majority.For example, median black family income is lower thanthat of whites, and good housing tends to be expensive.But economic factors do not entirely explain the existentwidespread residential segregation. It can be explainedonly if racial discrimination is also weighed in the balance.

The notion that blacks and other minorities need onlylarger incomes to gain an equal choice of housing is notsupported by fact. If that were true, it would be expectedthat all poor families, whether white or black, would beequally restricted in their choice of housing. The evidenceindicates that segregation by race is more widespread thansegregation by income.

Census figures show that poor white families are notconfined to housing in the central city as are poor blackfamilies. White families are widely dispersed throughoutthe metropolitan areas. The percentage of poor whitefamilies who live in suburban areas comes close to equalingthe percentage of white suburban residents who are notpoor. Nearly half of all poor white families live in thesuburbs, while four out of five poor black families areconfined to the inner-city.

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The Commission's own study of the Section 235program of homeownership of lower-income families alsodocumented the fallacy of the belief that economic, ratherthan racial, factors are the main obstacles to free housingchoice for minorities. Under the Section 235 program,the Department of Housing and Urban Developmentprovides financial subsidies to enable lower-income familiesto become homeowners. All families eligible to participatein the programwhite and blackmust be within thesame income range. All houses digil* for r urchaw odorthe program \\ purt..:71:Nerd by whites or blacksare subject to the same restrictions as to cost. TheCommission found that the program was operating freelythroughout metropolitan areas. Most of the new housingwas being built in the suburbs, while existing housingutilized under the program was located in the centralcity.

If the economic rationale used to explain racialresidential patterns were valid, it would be expected thatblack and white families alike, would have access tosuburban, as well as central city, housing. But this wasnot the case. The new suburban housing was occupiedalmost entirely by white families, while existing centralcity housing generally much inferior to the suburbanhousingwas occupied by black families. In short, thesame pattern that exists in the housing market generallywas almost precisely duplicated under the 235 program.But the economic justification was absent. The Com-mission's investigation showed that a variety Ofdiscriminatory practices, not economics, accounted for thesegregation that occurred.

A companion program to Section 235, a program ofrental housing for lower-income families called Section236, has generated the same segregated patterns ofresidence, again without the traditional economic rationale.Under this program, where costs and income limits arethe same regarding all participating families, the projectshave been occupied largely on a racially segregated baiis.

Statistics on homeownership indicate that at everyincome level blacks have less of an opportunity thanwhites to become homeowners. Half of all white familiesearning between $3,000 and $6,000 a year are hcme-owners, but only a third of all black families in the aameincome range own homes. In the middle- and upper-incomegroup, four of every five white families own their homes.For black families in the same income group only twoout of three are homeowners.

There is evidence that opposition to low- and moderate-income housing by suburban communities is as stronglymotivated by racial factors as it is by economic factors.In many cases, the economic argument against lower-income housing is used to conceal racial discrimination.

For example, sonic white suburban communities haveprevented the construction of lower-income housing thatwould permit black families to move into the community,but have accepted similar housing construction plannedfor poor elderly persons already living within the bordersof the suburban community.

Several court cases have pierced the veil of deceptionrepresented by the economic argument. In 1970, the cityof Lackawanna, New York, was the subject of litigationin Federal court for refusing to grant a building permitto a sponsor (who was black) of a low-income housingproject. The city defended its position on the ground thatthe new units would be a burden on the city's sewa alltiwater system. In addition, the city contended:the proposedsite was needed for a city park. The court found a differentreason for the position of the city. Sabstantial evidenceproved to the court that cippositicato the low-incomehousing project was based on tine "discriminatorysentiments of the community:"

ha similar case in Lawton, Oklahoma, thecity arguedthat its refusal to change anoninglaw to permitconstrue-don of subsidized housing vas baseni on the increased costof public services which thetew bowing woulni require.But this court, too, ruled the hiddemcause of the city'saction was the racial prejionticeof white residents.

At least one Federal ibas rolled that a tiliscrimina-tory effect is unlawful, Whettsesidents of a Cailiforniatown voted to block construction of shousingirroject tobe occupied primarily by 1Viertican Americans, a Federalcourt ruled, even if the votersimd not been raciallymotivated, the action was stetunconstitutional, if it badthe effect of keeping minonityAgroupssegregated. Cityofficials, the courts said, ,haveran absciline duty to considerthe housing needs of minoritySamilies.

These cases indicate the coverts understand the:partracial attitudes play in opposition to low-income housing,and they have been unwillingto allowcommunitiesttomaintain segregation by hidingbehindia cloud Of otherissues.

President Nixon, in his 1971 "Statment on FederalPolicies Relative to Equal Housing Opportunity"recognized the use of economic arguments as :falsejustification for excluding minority hasseseekers from acommunity. The President said: ". . we will notcountenance any use of economic measures as a subterfugefor racial discrimination." Three daysailter the President'sstatement, the Department of Justice initiated court actionagainst the city of Black Jack, Missouri. Black Jack hadbeen an unincorporated anea until the: announcement thata low-income housing project rponsored by a church groupwas to be constructed in the city. Residents of Black.Jackopposed the project and offered a variety of economicburdens as their reason. Theresidents,denied that raceplayed a part in their decision. The Government's suitcharges that Black Jades r fineorpcsatipn as a city andits immediate enactmest ()L.? taw prohifritiag new multiple-family dwellings had the col siontation of racial segregationas its objective.

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PROSPECTS FOR THE FUTURE

0 ne lesson learned from the civil rights experience inthe 1960's is there is no single path to resolvingproblems of racial injustice. The lesson was

learned on a trial-and-error basis, as the Ni: m focused itsattention piecemeal on civil rights issues-- , kiting rights,jobs, public accommodations, and educationas thougheach provided the only solution. Housing came last.

Housing is one of the most complex and intractableareas in the civil rights field. A denial of the right to votecan be corrected instantly because thousands ofdisfranchised citizens can be registered to vote. Whilediscrimination of the past is more difficult to overcomein emplioyment and education, the Nation has achievedmeasuraible results in these areas in a relatively short time.

In housing, the legacy of the past has a much strongerbearinpon the present and future. Patterns of residencehave dieveloped over a period of decades in whichgovernment at all levels and private industry combined toestLblislh a racially dual housing marketseparate andunequal. The problem facing us now is not merely to endcurrent discriminatory practices, but also to eliminate theeffects cif past discrimination and reverse the residentialsegregation that now exists. This is extraordinarily difficultand the answer does not lie in any single approach whetherit be adoption of a fair housing law or breaking downexisting suburban barriersracial and economictominority residence. Rather, it lies in an across-the-boardeffort in which all elements of the housing industry, publicancrprivate, become active participants.

Despite the complex and difficult problems that face usin reversing patterns of residential segregation, prospectsfor the future are not entirely gloomy. There is evidence ofchange in housing policy and practicechange that is stillsmall and insubstantial, but which can provide the basisfor the kind of large-scale effort necessary.

The Federal Government, which years ago was anactive exponent of housing discrimination and residentialsegregation, now maintains strong laws and policies favor-ing equal housing opportunity. State and local governmentshave changed their official position. A few decades agothese governments were either indifferent to the problemof housing discrimination or were insistent upon residentialsegregation. Today 33 States, including the border andSouthern States of Kentucky, Maryland, and Virginia, andliterally thousands of municipalities, have fair housing laws.Likewise, the policies of the housing industry have changed.Trade associations of mortgage lenders and builders,which in earlier years took positions in support of racialdiscrimination, now pledge support of the principles offair housing. NAREB, which played a major role inestablishing the separate housing market and led theunsuccessful fight against enactment of the Federal Fair

17

Housing Law, now urges full compliance.Nevertheless, a change in official policies, while a

beginning, is not enough. The policies must beimplemented if results are to be achieved. There areencouraging signs. In recent months HUD, which carriesthe major responsibility for enforcing the Federal FairHousing Law, has issued a series of regulations in suchareas as affirmative marketing requirements, site selectioncriteria, and fair housing advertising guidelines. Theseregulations are an effort to assure that HUD's programsof financa1 assistance advance the goals of fair housing.The General Services Administration, responsible forproviding facilities for most Federal Agencies, has issuedregulations concerning the selection of sites for Governmentinstallations to assure that lower-income and minorityemployees have access to housing. The Agencies thatsupervise mortgage lending institutions have started toaccept their responsibilities under Title VIII by issuingregulations to assure that minority home buyers have equalaccess to mortgage credit.

At the State and local levels, there are small butencouraging signs of action to overcome obstacles to theexercise of free housing choice, particularly the suburbanexclusion of lower-income minorities. Several States havepassed laws aimed at overcoming the barrier of exclusion-ary zoning laws that keep out low- and moderate-incomehousing. Thus, Massachusetts has enacted an "Anti-SnobZoning Law," which establishes a quota for low- andmoderate-income housing for each town in the State.New York has established a State Urban DevelopmentCorporation with power to override local zoning lawsand other exclusionary land use controls to provide low-and moderate-income housing. Furthermore, in some met-ropolitan areas, communities that previously viewed eachother with hostility are cooperating to develop plans bywhich they will accept the responsibility for meeting afair share of the lower-income houSing needs of the entirearea. The Dayton, Ohio Metropolitan Area is the first toadopt such a plan and the Washington, D.C. MetropolitanArea has followed Dayton's lead. Other areas to takesimilar action include San Bernadino County, California,and the Twin Cities (Minneapolis-St. Paul), Minnesota.HUD is providing encouragement for widespread use ofthese "fair share" plans in other metropolitan areas. Afew suburban communities have enacted ordinancesrequiring builders to set aside a percentage of theirhousing for lower-income families.

Private groups are increasingly active in the housingfield. A few years ago, private activity was limited to theefforts of scattered fair housing councils and neighborhoodstabilization organizations. Today the private fair housingmovement has burgeoned, and the knowledge and the

sophistication of those involved in the movement haveexpanded. These groups are engaged in monitoring theeffect of Federal housing programs. They are pushi- g forinnovative S. 'It legislation that will expahousing ,,ppo- throughout the metropolitan areas.And they are Grg;rtg bastic changes in the operation of theprivate housing market,

None of these developments, singly or in combination,has yet had a significant impact in altering the patternsof segregated racial residence. They must be greatlystrengthened if real change is to occur. Fair housing lawsFederal, State, and localmust be enforced much morevigorously than they are now. Federal housing programsmust be designed more precisely to achieve equal housingopportunity goals. States and localities must recognize thatmetropolitan areas represent single social and economicunits and take stringent measures to assure that housingis available to all. Private industrybuilders, brokers, andlendersmust reevaluate their traditional practices so theycan contribute to achieving the goals of fair housing, towhich they now pay little more than lip service. Thenumber of organizations and individuals working in thefield of fair housing must expand and impress theirconvictions and strength upon public and private housingofficials who may think that the fair housing movementis a passing fad.

In the last analysis, we must ask who benefits from fairhousing? The obvious and immediate beneficiaries are, ofcourse, minority group families, who, in an open housingmarket, gain the benefits of a free housing choice longdenied them. But fair housing is of vital importance to usall. The dual housing market has bred a variety of ills fromwhich our whole society is suffering: the physical decayand financial insolvency of our cities; the irrationalproliferation of jurisdictions in metropolitan areasseparated from each other by race and income; and theracial alienation and distrust that make us strangers toeach other. This is the legacy that the present generationhas inherited from the past. It :s we who will determinewhich legacy we leave our children.

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SELECTED BACKGROUND SOURCES

PUBLIC STUDIES, PUBLICATIONS, AND REPORTSA Decent Home, "The Report of the ?resident'sCommittee on Urban Housing." 1968.Federal Home Loan Bank Board, "Neighborhood Rating,"August 1940.Federal Housing Administration, Underwriting Manual,1938.Kentucky Commission on Human Rights, Fair Housing:Myth or Fact, Frankfort, Ky., 1969, Marcus, Matityahu,"Racial Composition and Home Price Change: A CaseStudy"; Journal of the American Institute of Planners,September 1968.Mayor's Committee on Race Relations, Race Relations inChicago, 1940.Report of The National Advisory Committee on CivilDisorders, 1968.U.S. Bureau of the Census, 1960 Census of Housing.U.S. Bureau of the Census, 1970 Census of Populationand Housing.U.S. Bureau of Labor Statistics, The Social andEconomicStatus of Negroes in the United States, 1969; BLS ReportNo. 375, 1970.U.S. Commission on Civil Rights, 1961 Report No. 4,Housing.U.S. Commission on Civil Rights, Federal Civil RightsEnforcement Efiort, 1970.U.S. Commission on Civil Rights, Federal Civil RightsEnforcement Efiort: One Year Later, 1971.U.S. Commission. on Civil Rights, Home Ownership forLower-Income Facilities: A Report on the Racial andEthnic Impact of the 235 Program, 1971,

PRIVATE STUDIES AND PUBLICATIONSAbrams, Charles, Forbidden Neighbors, New York,Harper, 1955.American Friends Service Committee, A Report to thePresident, 1967.Babcock, Richard F., The Zoning Game, University ofWisconsin Press, 1970.Commission on Race and Housing, "Privately DevelopedInterracial Housing; An Analysis of Experience," Berkeley,University of California Press, 1960.Equal Opportunity in Housing; Laws, Regulations,Decisions, Prentice-Hall Loose Leaf Report.Helper, Rote, Racial Policies and Practices of Real EstateBrokers, University of Minnesota Press, 1969.Laurenti, Luigi, Property Values and Race, Berkeley,University of California Press, 1960.McMichael, Stanley L. and R. F. Bingham, City Growthand Values, Prentice-Hall, 1923.Myrdal, Gunnar, An American Dilemma, New York,International Pul:',,,ers, 1944.

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National Committee Against Discrimination in Housing(NCDH ), "How the Government Builds Ghettos,"Housing, October 1968.National Urban League, The National Survey of HousingAbandonment, New York, 1971."The Suburbs: Frontier of the 9.70's," City, January/February 1971.Weaver, Robert C., The Negro Ghetto, New York,University Press, 1948.

COURT CASESBuchanan v. Worley, 245 U.S. 60 (1917).Dailey v. City of Lawton, Okla., 425 F. 2d 1037 (10thCir. 1970).Garrett v. City of Hamtramck, Mich., 335 F. Supp. 16(E.D. Mich. 1971).Gautreaux v. Romney, 448 F. 2d 731 (7th Cir. 1971).James v. Valtierra, 402 U.S. 137 (1971), rev'g. Valtierrav. Housing Authority, 313 F. Supp. 1 (N.D. Cal. 1970).Jones v. Alfred H. Mayer Co., 392 U.S. 409 (1968).Kennedy Park Homes Ass'n., Inc. v. City of Lackawanna,N.Y., 318 F. Supp. 669 (W.D.N.Y.) aff'd., 436 F 2d 108(2nd Cir. 1970), cert. denied, 401 U.S. 1010 (1971).Southern Alameda Spanish-Speaking Organization(SASSO) v. City of Union City, Calif., 424 F. 2d 291(9th Cir. 1970).Shannon v. HUD, 436 F. 2d 809 (1970).Shelley v. Kraemer, 334 U.S. 1 (1948).

ii-:;/11/11711tIM((f riiidr,o4),.gyrrif

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