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U.S. Democratic presidential candidate and U.S. Senator Kamala Harris (D-CA) speaks during a Fourth of July House Party in Indianola, Iowa, U.S., July 4, 2019.    REUTERS/Scott Morgan - RC1F4150F4F0
The Avenue

Democratic candidates begin to address the woes of historical discrimination

This past June, in response to a question given by a reporter about reparations, a topic which has become a litmus test for Democratic presidential hopefuls, Kentucky Sen. Mitch McConnell expressed this belief: “I don’t think reparations for something that happened 150 years ago for whom none of us currently living are responsible is a good idea.” There’s a common, disconcerting claim that demands for restitution require a culpable individual, even if the person acted as a member of Congress.

McConnell may be less skeptical about policymakers’ ability to redress the country’s long history of legalized racism and more interested in avoiding the appearance of accepting blame. While NBC News reported on July 8 that two of McConnell’s great-great-grandfathers owned slaves, it’s important to note that the goal of addressing the ongoing effects of racism is to lift up people and places, not to persecute the descendants of slaveowners.

To be clear, making policy that addresses the current impacts of past legislation is the main job of a lawmaker. Racially-restrictive housing covenants shaped by legal segregation prohibited black Americans from buying homes in certain areas throughout the 20th century. Racially-biased redlining facilitated by the federal government from the 1930s to well beyond the passage of the Fair Housing Act of 1968 deemed black-majority neighborhoods too risky for mortgage lenders, quite literally robbing opportunities for black Americans to establish equity in a home and build wealth.

The remnants of those policies still exist in today’s housing prices. Our housing research shows that homes in black neighborhoods are devalued nationally by 23% on average, resulting in $156 billion in cumulative losses and keeping those who are striving for the American dream from actually reaping its benefits–and currently robbing communities of value they deserve. Discrimination and reparations are not concerns of a bygone era; they are relevant today. By not acting on the past, legislators extend current harms caused by their predecessors. Sitting legislators are responsible for acting.

Democratic presidential hopefuls weigh in on the legacy of discriminatory policies

This past weekend at the Essence Festival in New Orleans, California Democratic Senator and presidential hopeful Kamala Harris announced a plan to address housing that would grant up to $25,000 in down payment assistance and closing costs to low-to-moderate income renters who live in formerly redlined districts. It was also no coincidence that Sen. Harris made her announcement at the Essence Festival, one of the largest celebrations of black music, politics and business in the country, in front of thousands who attended the event. Other presidential candidates, including Sen. Elizabeth Warren (D-Mass.), Sen. Cory Booker (D-N.J.) and New York City Mayor Bill de Blasio made their appeals for their candidacy to the Essence crowd comprised mostly of black women.

Harris seeks to break away from a congested Democratic primary field that has been tested on how each will provide recompense to the people injured by slavery, de jure segregation and legal housing discrimination–all facilitated by the federal government. Her exchange with former Vice President Joe Biden on busing and school desegregation during the first Democratic presidential debate in June gave her boost in the polls as well as cemented a sense of credibility on issues of racism in America. In 2018 Elizabeth Warren released the American Housing and Economic Mobility Act, which also included payment assistance to first-time homebuyers in formerly redlined districts. Warren titled this section of the plan “Reversing the Legacy of Housing Discrimination and Government Negligence,” making explicit the need to address historic, structural barriers to home ownership for blacks living in the U.S.

Homeownership rates among black Americans lags other racial groups. In the 100 cities with the largest black populations, each experiences a black-white homeownership gap ranging from 15% to 50% according to research published by The Urban Institute in 2018. In addition, historic discrimination in housing also contributes to a widening wealth gap that sees white families holding 10 times the amount of wealth as blacks. Although racism leveled against black people was the source of the problem, race-based solutions will be hard to come by. The Supreme Court has struggled with policies and practices that account for race, reflected in numerous affirmative action decisions. Legislators and policymakers then are left with using proxies, with place-based strategies having emerged as the favorite.

Addressing the current impacts of historical legislation

While imperfect as a stand-alone strategy, place-based endeavors can address many of the impacts of historic racial discrimination. Formerly redlined communities overlap with black-majority neighborhoods that suffer from devaluation. A 1938 map of “residential security” in Birmingham, Ala. shows extensive redlining, with very few neighborhoods classified as “first grade”. A 1933 version even classifies some areas as “negro concentrations.”

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As of 2017, the areas redlined in 1938 include 32% of the city’s population and over 27,000 occupied housing units. Some eight decades later, those areas are still among the most acutely devalued regions of Birmingham. The gross devaluation of homes’ values in these areas of the city is an estimated $563 million.

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These are also areas in which homeownership wanes, even though devaluation lowers home prices.

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Harris’ proposal calls for a $100 billion fund through the U.S. Department of Housing and Urban Development (HUD), from which the $25,000 grants would be awarded to qualified applicants for down payment assistance and closing costs. The proposal cites research from The Urban Institute, which found in 2018 that first-time homebuyers bought houses worth $245,320 with an average down payment of $22,561 and at an interest rate of 4.43%. The campaign estimates the award amount will help at least four million potential homeowners currently living in federally-supported or renting housing in historically red-lined communities. To qualify, the renter must have lived in the area for 10 years prior. Families cannot have annual incomes of over $100,000 or $125,000 in high-cost areas. Individual applicants cannot make over $50,000 or $75,000 in high-cost areas.

Increasing the proportion of homeowners in devalued areas is but one way to increase the value in communities. Current homeowners also need a policy solution. Low income home owners could use micro grants to fund significant repairs and façade improvement to increase home values in neighborhoods. In addition, having an affordable home can be prioritized over having a home that will build wealth. Harris’ plan seeks to promote homeownership to help close the wealth gap, but black people also need homes to anchor themselves in communities. Incentivizing long term renters who are ostensibly committed residents to become homeowners is important, but anchoring low-income residents in affordable homes is more important.

There are other provisions in Harris’ plan that get at the root causes of discrimination as well as its consequences. The measure would update the Home Mortgage Disclosure Act to assign a unique loan identifier to every loan, so we can see if homebuyers are being steered to certain neighborhoods. In addition, Harris seeks to amend the Fair Credit Reporting Act to require the credit scores to include other measures to show a track record, including payments for rent, phone bills, and utilities. While we should always seek restitution and repair for those injured by racism, we should never forget to cut discrimination off at the pass, so we do not have to deal with its supplemented future effects.

While Harris’ policy offering is not a form of reparations for black people (there are long-term white and brown residents in formerly redlined areas who would be eligible for assistance), it does seem to offer a pragmatic, albeit incomplete, solution to address structural inequality created in part by historically biased federal housing policy.

While Harris’ policy offering is not a form of reparations for black people (there are long-term white and brown residents in formerly redlined areas who would be eligible for assistance), it does seem to offer a pragmatic, albeit incomplete, solution to address structural inequality created in part by historically biased federal housing policy.

As the presidential campaign season continues to ramp up in earnest, we should continue to track what other candidates are articulating, and not articulating, on these important policy issues. For all of the talk about those who have felt left behind by today’s changing economy, and the impact of such voters on the 2016 election, let’s certainly not forget those that have been left behind by centuries of discriminatory federal, state, and local policies.

David Harshbarger provided excellent research assistance for this post.

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