Chapter 4

Zoning restrictions that used class as a proxy for race could not keep more affluent middle-class African Americans out of white neighborhoods. Beginning with Woodrow Wilson’s administration in 1917, the federal government encouraged the aspiration of home ownership among Americans, but it did so partly by means of “restricted residential districts,” which promised white residents that they would not have Black neighbors. Federal promotion of home ownership “became inseparable from a policy of racial segregation.”

Most Americans could not afford to purchase a home, and the situation worsened during the Depression of the 1930s, when many homeowners could not make their mortgage payments. The Home Owners’ Loan Corporation (HOLC) was established in 1933 to assist homeowners by purchasing mortgages from lenders and arranging easier amortized repayment plans. The HOLC created maps of every city in the United States with the safest and most dangerous neighborhoods marked out, to assist with its lending decisions. Neighborhoods in which African Americans lived were automatically designated as dangerous. The Federal Housing Administration (FHA), created the following year, pursued similar policies.

The author discusses the case of the Mereday family, who worked hard to acquire a trucking business and assisted in the construction of William Levitt’s Levittown development after World War II. Although they earned a good income and had played an important part in building the houses, the Meredays were prohibited from buying houses in Levittown. This was not merely a personal prejudice of Levitt’s. If he had attempted to integrate the development, the federal government would not have subsidized it. In fact, the FHA would withhold approval for financing even if there were African Americans in neighborhoods close to the development.

Rothstein traces a pattern of government-backed segregation, which began with the suppression of Reconstruction in 1877 and continued through every administration until after World War II. He concludes by quoting the United States Commission on Civil Rights in 1973: “Government and private industry came together to create a system of residential segregation.”

Chapter 5

In 1948, the Supreme Court ruled that racial clauses in private agreements could not be enforced by the power of government. This decision invalidated private restrictions on property owners that prevented them from reselling their houses to African Americans, but it was ignored and subverted by the Federal Housing Administration, along with other government agencies.

Clauses known as restrictive covenants impose obligations on the owner of a property, sometimes stipulating the color the exterior must be painted or prohibiting the opening of a business. In the nineteenth century, clauses prohibiting resale to African Americans became common, and these clauses were often adopted by developers of large housing projects in the twentieth century. All levels of government throughout the country were involved in enforcing these covenants, and their use was upheld by the Supreme Court in 1926. The Hoover administration’s 1931 housing conference noted and recommended the use of racial exclusion clauses, and the Federal Housing Administration, formed by President Roosevelt, later turned this recommendation into a requirement for financing housing projects.

The Supreme Court’s landmark decision in Shelley v. Kraemer (1948) reversed its 1926 ruling and held that racially restrictive covenants were unconstitutional. This decision met with massive resistance, first of all from the FHA, the commissioner of which bluntly stated that the ruling would “in no way affect the programs of this agency.” The FHA slowly and reluctantly altered its position several times before beginning “its lackluster compliance with Shelley ” in February 1950. This compliance was inconsistent and evasive, and the racially restrictive covenants themselves were not made illegal until a federal appeals court...