Racism in housing policies locked Black Americans out from generational wealth

I occasionally take evening strolls near my apartment through Denver’s Observatory Park neighborhood, which has large houses with superbly manicured lawns, gorgeous flowers, and beautiful shrub work. It’s the kind of well-appointed, middle-upper class area where dogs have a better life than some children do.

What for years was a nice walk in a quiet neighborhood has become the catalyst for my growing anger over generational wealth that’s often found overwhelmingly in white communities. Sure, there may be a household or two with people of color sprinkled in, but they are few and far between. In fact, 20 people in the entire census tract, including the blocks around Observatory Park reported their race as Black, while 4,002 people, or 82%, reported “white only,” according to the 2020 Census.

Many people in such neighborhoods have benefitted from America’s intractable problem of institutional racism, given that the best avenue to gaining wealth is owning the place where you live.

Miriam Webster defines institutional racism as the systemic oppression of a racial group to the social, economic, and political advantage of another, namely the white community.

Wikipedia explains it as a form of racism that is embedded in the laws and regulations of a society or an organization and manifests as discrimination in areas such as criminal justice, employment, housing, health care, education, and political representation.

It’s all about that power

What angers me the most about our economic system, vis-a-vis housing especially, is that it’s locked into the mechanisms of institutional racism so firmly that most attempts to increase Black wealth are insignificant. And with today’s home prices on an upward spiral, a significant jump in unearned wealth will be passed on to white descendants in Colorado and across the country. The boom in housing prices will also put homeownership further out of reach for lower-income Americans, especially people of color who lack equal access to financing.

The Colorado News Collaborative reported recently that the gap between Black and white homeownership in our state continues to widen thanks to longtime lending practices and concomitant appraisal systems.

The story revealed that “In Colorado, Black mortgage applicants were turned down almost twice as often as white applicants. According to a Zillow analysis, 15% of Black mortgage applicants in Colorado were denied in 2020, compared with 9% of white applicants.”

COLab’s reporting quoted the Brookings Institution as saying, “Across the country, owner-occupied homes in Black neighborhoods are undervalued by $48,000 per home, on average, which amounts to $156 billion in losses nationwide. When half of the residents in a neighborhood are Black, the homes are valued at roughly half the price of homes in neighborhoods with very few or no Black residents.”

COLab also noted that “The median white household has at least 10 times the wealth of the median Black household.” Further making the point that being shut out of the chance to own a home remains a significant obstacle to building wealth.

A remedy gone bad

America has missed opportunity after opportunity to make significant improvements in Black homeownership, not least of which was The Servicemen’s Readjustment Act of 1944, aka The GI Bill. It could have begun a long march towards rectifying de facto and de jure housing discrimination. The federal loan guarantee program was supposed to give returning WW2 veterans help with rebuilding their lives through a combination of educational opportunities and housing loans.

But instead, it was written in a blatantly discriminatory way so as not to defang Jim Crow laws in order for President Franklin Roosevelt to score the support he needed to appease Dixiecrats and get the legislation through Congress. Black folks again got the shaft and the white community reaped the benefits.

In essence, the much-lauded New Deal president agreed to let state and local governments implement the bill in accordance with their customs and prejudicial beliefs. The result was obtaining low-cost mortgages, low-interest loans and financial support to buy houses turned out to be a pipe dream for deserving veterans of color, and not just in the south.

The bill’s implementation also gave cover to bankers and other private actors in the real estate game to engage in blatant discrimination in President Roosevelt’s home state. There’s the often cited case of a large development called Levittown on suburban Long Island east of New York City that focused on providing modest houses for returning veterans.

Talk about blatant. The lease agreements said no house could be used or occupied by any person other than members of the Caucasian race. The clause was written in capital letters with bold type.

Federal officials had no problem with the fact that race restrictions being demanded by developers and redlining practices used by mortgage lenders would increase racial wealth disparities. Columbia University historian Ira Katznelson said The GI Bill amounted to affirmative action for whites.

Think about it. Eighty years ago could have been a turning point. It could have been the beginning of a revolutionary movement to slow the advance of poor and low-income areas that were solely based on race.

It hits close to home

My uncle, James Joseph, served honorably in the U.S. Navy during WW2. He and other Black men and women who risked their lives for their country came home to find that their service was not appreciated as much as their white counterparts because the GI Bill allowed discrimination to remain intact.

Take a moment to imagine how different American neighborhoods would look if in the wake of the war, Black soldiers and sailors could have taken full advantage of the government’s promise of giving vets a leg-up through education and homeownership.

Not only would my uncle’s kids and grandkids have begun accumulating real estate wealth decades ago, they also would have learned the importance of homeownership and seen people who look like them achieving The American Dream that could turn into lasting economic security.

Black people who came before me were overtly denied equal opportunity to be successful, and many of the ones coming after me will still won’t be treated right.

The fact that the hopes and dreams of generations of Black people have been systemically dashed must be remembered and eventually rectified. I have no illusions that drastic improvements will be made in my lifetime or even over the next century, given that the white community is already halfway around the track.

Don’t you dare just talk the talk

Now, before anybody gets their knickers in a twist, let me say I don’t blame white people as individuals unless they’re guilty of directly exerting the power that perpetuates discrimination, such as bankers, policymakers, real estate companies, etc.

I don’t begrudge anyone the ability to afford highfalutin domiciles. Good on ya. But the question is how much of wealthy Americans’ their station in life came solely from their own hard work and how much of it can be attributed to white skin privilege enjoyed by a line of ancestors?

In the current political climate, there’s a tendency not to want it to recognize white skin privilege as a real thing and attack those who bring it up as being anti-white racists.

They’ll say, “I’m white, and my family is poor and working class. We don’t live in a fancy house or drive a fancy car or send our kids to an expensive private school.”

Some may counter that not all white Americans get a fair shake in our capitalist system. That’s not a flimsy argument. There’s no doubt that unfortunate factors keep many poor and working-class white brothers and sisters from attaining one of the biggest goals of the American Dream — homeownership.

Indeed, some White people have felt the sting of discrimination on the basis of intellectual disabilities, physical capabilities, body size, sexual preference, lack of education, gender, religion, ethnicity, political beliefs, and other excuses by the powers that be.

But race ain’t one of them.

Skin color, first and foremost, would not have landed them on the lower rung of the economic ladder as is the case for generation after generation after generation of Black Americans.

It’s time for members of the white community who believe in equality and fairness to wake up to the fact that wealth inequality has been carried on by them as collective beneficiaries of an unjust system. If you’re not part of the solution, then you are part of the problem.

I’m not mad at all of y’all. But I am mad at those who don’t see, don’t want to see, or, worst of all, staunchly refuse to see that they have gained generational wealth through unearned assets fostered by a system of housing discrimination and injustice.

Know that the lack of Black generational wealth through homeownership is a problem that can be solved eventually if Americans understand the issue and stop traveling along the road of complacency.

Recognize the damage that institutional wealth has caused, and don’t wait another 80 years to clean up the mess.

Jo Ann Allen is the creator and host of the podcast Been There Done That. She started her journalism career in 1975 at The Capital Times newspaper in Madison, WI. She spent 18 years as a news anchor at WNYC/New York Public Radio, and also worked as an anchor at KPBS Radio in San Diego, WHYY Radio in Philadelphia and Colorado Public Radio in Denver.

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