Author and community organizer Leah Rothstein presents her new book (co-authored with Richard Rothstein) during a presentation prepared for OBI staff on July 6, 2023. The presentation was facilitated by OBI Assistant Director Stephen Menendian. Learn more about the book, Just Action: How to Challenge Segregation Enacted Under the Color of Law, at justactionbook.org/.
So good morning everyone. It's great to see staff and summer fellows. We've got a wonderful guest speaker today who has just written a very important book, co-authored an important book which you're going to learn about today. So our guest speaker is Leah Rothstein. Leah is the co-author with Richard Rothstein of Just Action, a sequel to The Color of Law. While in The Color of Law, Mr. Rothstein described how government policy fostered and helped create racial residential segregation, this sequel describes how local community groups can redress and remedy the wrongs of segregation.
Ms. Rothstein has worked on public policy in community change from grassroots to the halls of government. She led the Alameda County and San Francisco probation department's research on reforming community corrections policy and practice to be focused on rehabilitation rather than punishment. She's been a consultant to nonprofit housing developers, cities' and counties' redevelopment agencies and private firms on affordable housing policy, practice and finance. Her policy work is informed by years as a community organizer with Pueblo and Californians for Justice, working on housing, public safety, environmental justice, and youth justice, and as a labor organizer for the Union of Needletrades, Industrial and Textile trades, UNITE. Ms. Rothstein received a bachelor's degree with honors in American Studies from the University of California in Santa Cruz, and a master's in Public Policy from the Goldman School at the University of California, Berkeley.
So with that, the way this is going to go is that Leah will present for as long as she likes, but I think roughly about maybe 20 to 30 minutes. And then we're going to have plenty of time for questions and answers and conversations, which I will moderate. So I'll hand the floor over to Leah. Leah, we're excited to hear about this work. Tell us about it.
I'm going to start by talking about this concept of de facto segregation. This is a concept, an idea, an explanation for why our country is racially segregated. It's one that we've come to accept as a country for a long time. It's how we explain why we live in racially segregated communities. And the de facto segregation idea tells us that we live in segregated communities because of private action, the actions of realtors or landlords or mortgage brokers who refuse to sell or rent or give mortgages to African Americans to live in white neighborhoods. Or that we live in racially segregated neighborhoods by personal choice. We tell ourselves it's just a natural occurrence, it's unlike the laws that require the segregation of restaurants and schools and transportation in the south. And so it wasn't caused by law, it wasn't de jure segregation, it's de facto. It's private actors, it's personal choice, personal preference.
We look around, we think it's too bad that we live in such racially segregated communities, but there's not much we can do about it because anything that happens naturally can only unhappen naturally. It doesn't give us much agency to challenge it or change that trajectory. The Supreme Court has agreed in a long history of decisions that we're still getting, that's based on a faulty history that says that the government had no role to play in creating segregation, and so has no role to play in undoing or challenging it. That was what Chief Justice John Roberts wrote in an opinion almost 20 years ago.
So with that sort of backdrop, my father, Richard Rothstein, wrote The Color of Law in 2017. And the main argument of that book is that this de facto segregation idea is a myth. It's complete nonsense. It's not true. It was never an accident. It was never personal choice, and it wasn't just private action. Color of law described in great detail that, sure, private action played a role in creating racially segregated communities, but that private action was incentivized and often required explicitly by the government. All levels of government: local, state, federal government.
And those government actions, they were as unconstitutional as the laws that created segregation in the south, of restaurants, transportation and schools. It was sometimes less disguised, but not always. It was pretty explicit, it's just a history that we've forgotten, and it's no less powerful than those laws that segregated the South and no less a violation of the 5th and 14th amendments of the Constitution. And once we see that our government took these unconstitutional actions, we can start to see that we have an obligation to do something about it. Because when we come to terms with our government breaking its own laws and violating the constitution, we start to see that we have to do something about it to remedy that.
But so far, nobody has stepped up to this obligation to remedy residential segregation and the role the government played in creating that. So I'll give one example from The Color of Law. And again, that book is full of many, many, many examples with great detail of all of the ways the government supported, created, incentivized, racially segregated communities. One example is how the federal government helped to suburbanized the country. So after World War 2, millions of war veterans came home from the war. They started families. We had the baby boom. They were met with a housing shortage because during the war there was no civilian housing built, and the war followed the Great Depression when there was also no housing built.
So these growing families had nowhere to live, and the federal government wanted to do something about that to help these families. And it did so by creating suburbs for white families, white working families outside of central cities. So at the time, we weren't a very suburban society. Most people lived in urban areas, they worked in factories and businesses that supported those factories. Those had to be in urban cores, near airports and rail lines to transport the goods they produced, and people needed to live near where they worked because we didn't have the transportation system and highway system we have today. While the federal government in meeting this demand for housing from white families wanted to change sort of that layout of what our residential patterns look like, and helped to create suburbs all across the country. One of the most famous ones you may have heard about is Levittown, located outside of New York City. It was built by a developer named William Levitt. He decided he wanted to meet the demand for working families looking for homes in New York City by building 17,000 homes.
Now 17,000 homes is a lot of homes. William Levitt didn't have the financing, didn't have the money to build those homes himself. He couldn't get a bank loan to do it because it was a speculative endeavor; 17,000 homes is a lot of money he needed. And as I said, we weren't a suburban economy. He didn't have buyers for these homes lined up, so banks weren't clamoring to loan him the money. The only way he could get the money to build Levittown was that the federal government, through the Federal Housing Administration, offered him a loan guarantee to build Levittown on the condition that he would put covenants on the homes he built written into the deeds of those homes that said that those homes could only ever be sold, owned, or occupied by whites. So explicitly excluding African Americans from Levittown. And this happened all over the country in suburbs all over the country.
Now this was written in the Federal Housing Administration manual. The manual that told the FHA appraisers when they were looking at suburban developments and whether they were a good candidate for federally backed loan guarantees, they were told that if the location of the proposed suburban development or subdivision was located anywhere near an African American neighborhood, that it wasn't a good candidate for this kind of loan guarantee because it would, and I quote from the manual, "Run the risk of infiltration by inharmonious racial groups." So another example, there's a photograph in The Color of Law of a wall: it's six feet high, half a mile long in Detroit. This was a wall that was required to be built by the developer of a nearby white subdivision to separate his subdivision from a nearby African American neighborhood. And he had to build that wall in order to get the loan guarantee from the Federal Housing Administration.
So this notion of de facto segregation that the government laws and policies had nothing to do with creating segregation is just nonsense. And these are just a couple of examples to show that. Again, The Color of Law is filled with more of them. So William Levitt himself, he was a bigot. He said at the time he wouldn't have sold his homes to African Americans if he was left to his own devices. But the point is that he wasn't left to his own devices. If the federal government had told William Levitt instead of putting racially restrictive covenants on the homes, that in order to get this federally backed loan guarantee, he had to agree to sell his homes on a non-discriminatory basis, well, Levittown would look very different than it does today. Levittown today is 2% African American in a surrounding area that's 13% African American, and that's due primarily to this policy that kept Blacks out, prohibited them from buying homes in Levittown when it was built. And that just perpetuates itself over the generations. And here's one of the reasons why.
When homes in Levittown and suburbs like it all across the country were built, they were affordable to working class families of any race. They were about a $100,000 in today's money. Those home buyers could also get federally backed mortgages. If they were veterans and they were white, they could get a VA mortgage that had no down payment requirement. So those homes are no longer affordable to working families. They now cost $300,000, $400,000, $500,000 in some places, including many here in California, a million or more. So families that were allowed and subsidized to buy into these suburban homes when they were affordable, those families inherited. They built wealth, they built equity through their homes' appreciation and value. That wealth through the generations that helped those families pay for their kids' college education or weather health emergencies or enjoy their retirements. And most importantly, that wealth was handed down to their kids and grandkids to help them buy homes themselves.
Now this is wealth that African Americans were explicitly prohibited from accumulating in the same way. So as a result, we now have an income gap between Blacks and whites: it's about 60% average. African American household income is about 60% of average white household income. And you would think that the average wealth of white and Black households would have the same gap. Because you make the same amount of money, you should be able to save the same amount of money. But the wealth gap is hugely... It's a lot larger than the income gap. So average African American household wealth is about 5% of average white household wealth. It's a huge disparity due in large part to this unconstitutional government policy that helped whites get into homeownership when it was affordable, earn wealth that way, or build wealth that way, and explicitly prohibited African Americans from doing the same.
So this wealth gap and segregated neighborhoods that we live in as a result is a large cause of a lot of the racial inequality that we see in our country today. In 1968, a Fair Housing Act was passed that prohibited the future discrimination in the sale and rental of housing, which is great. And it only looked to the future, it did nothing to address this wealth gap that already exists due to past government action and past discriminatory policies.
So aside from the wealth gap, segregated neighborhoods we live in are to blame for many of our most serious social problems and racial inequities. Segregated neighborhoods lead to disparities in health, income, education, incarceration rates, exposure to crime between Black and white children and adults. African American children who grow up in segregated African American neighborhoods more often live in communities with more pollution. Because the communities are located closer to highways or polluting industry. They more often live in buildings that have lead paint. They live in neighborhoods where there's higher levels of stress, more violence, less access to healthy food. So as a result, these children grow up to have more asthma and lead poisoning. They grow up to have more cardiovascular disease, shorter life expectancies and greater cancer rates than whites, even whites who grow up in poor white neighborhoods.
There's also educational disparities that come down to the segregated neighborhoods we live in. So a school in a segregated neighborhood has a whole student body that has one or more of these challenges: health problems, asthma, lead poisoning, stress. And no matter how good the school is, it's overwhelmed by the challenges of all of the students in their classrooms. And so the education of everyone in that classroom suffers, and that's why we see educational disparities between schools that are segregated in segregated neighborhoods.
So that's a little of the background of what The Color of Law covers. And a lot of people read The Color of Law. It has been widely read and talked about book since 2017. And as a result, this de facto myth about how we came to be segregated has somewhat less currency in our country today. We more clearly see the costs of segregation. We more clearly understand that it was unconstitutional actions by our government that created and maintain it. And once we see that, as I said before, we see that we have an obligation to do something about it. It doesn't mean we know what to do about it. A lot of people who read The Color of Law went to my dad's lectures about it: myself included, went up to him afterwards and said, "It's amazing that we now see this history more clearly than we have before, but what do we do about it?"
Now I didn't know... I have a background in community organizing and housing policy. I still felt that the segregation of our communities is such an overwhelming, seemingly intractable issue. I didn't know how we could make progress towards undoing and challenging it. Well, when I asked him that, he challenged me back and asked me to join him in writing a book to answer that question. So that's what we did. And together we wrote Just Action, where we attempt to answer that question and give people some ideas, lots of ideas of what we can do. Because it turns out there's actually a lot we can do in our own communities that will really have a large impact in undoing and challenging and remedying racial segregation.
So we start Just Action by arguing that to live up to this obligation to remedy racial segregation, we need a new activated civil rights movement. This is a movement it needs to start locally. We understand that federal policy change will be necessary. Eventually we'll need massive federal interventions and policy changes and investments to change segregation on the national level. But we also aren't naive, and we know that we don't have the political will on the federal level to do that right now, but that we can build that political will locally in our own communities. And there's a lot that we can do locally that will have a big impact on the segregation of our communities.
So how do we start building this local movement? Well, we start by building biracial, multi-ethnic groups in our own communities that start to work on these issues and talk about them. Now we emphasize that it's important that these groups are biracial and multi-ethnic, that they have leadership that's both white and African American. And we understand that this is daunting because we have little cross race contact these days outside of the workplace. We have little social contact with people of other races in large part because we live in such racially segregated communities.
So we understand that this is a challenge in and of itself, but we also know that it's not impossible, and in Just Action, we give several examples of groups that have bridged these divides to bring people together from segregated other race parts of town in the same city, to come together to start to learn that they actually have a lot in common and start to build social connections and build groups that can then work together to address the issues that their communities are facing. Often these groups, once they form, they start by learning about the history of their own community, how it came to be segregated. We give some examples: Modesto, California; Rochester, New York; Charlottesville, Virginia, who all started working on these issues when homeowners in these communities discovered these racially restrictive covenants that I mentioned before on the deeds of their own homes.
As I mentioned, these covenants were a primary tool of the federal government to create segregation in the 20th century. They're no longer legally enforceable, but they remain on the deeds of homes forever. They're a part of the legal document. They can only be removed by legal action. So homeowners discovered these on the deeds of their own homes and were shocked to see how intentionally their own community and indeed their own home was segregated. And from that, they began to inventory the covenants in their cities, create educational campaigns, educate their neighbors, and just raise awareness and inspire people to action. Because once we see how intentionally segregation was created, we can see that intentional action can do something to undo it. It gives us some agency back in this issue. Whereas before when we thought it was an accident, there's nothing we could do about it. But when we see it was intentionally created, it gives us the awareness that intentional action can do something to undo and remedy and challenge it.
So in Just Action, we described dozens of these policies and strategies that a group can then take on to begin to remedy and challenge segregation. And the strategies, I'll describe a couple of them in a second. But just to give like an overview, the dozens of strategies and policies that we describe, we describe the policies and strategies and then we often for most of them, give an example of a group somewhere in the country that's working on this issue and successfully implementing these strategies. And all of these strategies, they together do two things. We believe that we both need to end ongoing segregation; so change policies that continue to create and maintain segregated neighborhoods going forward. And then we also need to enact and implement policies and programs that right the wrongs of the past, that address the disparities, like the wealth disparity I talked about that exist now because of the policies that created and maintain segregation. So we have to both address the causes and the consequences of segregation if we're going to truly redress segregation.
So the policies and strategies we talk about fall in two main categories. The first are those that are called place-based strategies. And these are strategies that intend to increase investments in lower income segregated African American communities where the concentration of poverty is the direct result of government sponsored segregation. So we want to make these areas, areas of higher opportunity with more investments and more resources. And we understand that once a lower income neighborhood starts to see more investment, more resources, that higher income tenants often want to move in, and the longtime residents of that neighborhood are often at risk of displacement, gentrification occurs. So we need to couple these investment strategies with anti displacement strategies that attempt to prevent some of the displacement then that can occur when gentrification happens.
So some of those are policies that attempt to control rising rents; so rent control, rent regulation policies, also those that protect renters from unjust evictions. And a policy called inclusionary zoning, which requires that when new market rate housing is built, which often happens in a gentrifying neighborhood, that a certain percentage of the units built have to be reserved and sold or rented at affordable prices for lower and moderate income families. So one example of a place-based strategy that I'll describe in a little more detail is a land trust.
So there's almost 300 communities around the country that has a community land trust. These are often nonprofit organizations, and we describe one in Durham, North Carolina. It started in a lower income predominantly African American neighborhood in Durham where neighbors started organizing there to see what they could do to improve conditions in their neighborhood. And they started by realizing that they wanted to create a park in their neighborhood, because there was no safe place for kids to play and a child had been hit by a car. So they started by organizing and advocating that the city turned a vacant lot in their neighborhood into a park, and they won. They got the park. So then they were excited and galvanized to think what could they do next to help their community.
Well, their neighborhood was undergoing gentrification because they were near Duke University, which was expanding. So investors were buying up houses and displacing residents. So these neighbors learned about a land trust and started one. And what a land trust does is it attempts to... Or it does maintain and create affordable, usually, homeownership opportunities in communities where housing prices are rising, and it creates permanently affordable homeownership opportunities in those communities and also attempts to prevent displacement in those communities as housing prices rise. And it does this by acquiring properties. So the Durham Land Trust started by acquiring two vacant parcels or vacant homes that they then fixed up and they got those that properties because the local government donated it to the land trust to start. And that's how land trusts often acquire properties by donation of vacant unused land that the local municipal governments are sitting on. So then the land trust fixes up those homes and sells them at affordable prices to lower and or moderate income families.
The Durham Land Trust, their first homes sold for a $100,000 in today's money. A pretty affordable price. And the way a land trust can afford to do that is because in the sale of the home, it retains ownership of the land underneath the house. So the rising cost of land is one of the primary drivers of the increasing unaffordability of housing. So by taking the land out of the equation and just selling the home on top of the land, it can keep that home price affordable. So then the homeowners own the home like any other homeowner, and when they want to resell the home, they agree to adhere to a maximum resale price set by the land trust. And that maximum resale price tries to balance the desire to build up some equity for the home selling family, not as much as they would gain if they were selling for market rate prices, but some equity, and balances that with a desire to keep that home affordable to the next home buying family.
So in that way, a land trust can build some equity and some wealth for families, but maintain permanently affordable homes in perpetuity. So in Durham, the homes that the land trust now sells when homeowners resell their homes, they sell for about $150,000 in a neighborhood where homes are now selling for $500,000. So while they've gotten slightly less affordable, they're still far more affordable than the other home in the neighborhood. And we can see how that equation has worked there. So the land trust in this neighborhood has also been an effective anti displacement strategy. On the blocks where the Durham Land Trust was able to acquire property, most of the residents are still African American. And on the blocks where investors outpace the land trust, most of the residents are now white. So we can see it's both an effective anti-displacement strategy and an effective affordable homeownership strategy for these neighborhoods.
So what can we do with this example? Well, individually we can find land trust in our communities and donate or volunteer to support them. But most importantly, what we can do is collectively we can pressure our governments, our local governments and local institutions to donate vacant land and resources to land trust so that they can continue to expand their portfolio of affordable homes. And we can do that by pressuring local governments. And I talked about land trusts as a strategy to be used in gentrifying neighborhoods, but if there were groups organized around these issues in a suburban neighborhood, for example, a suburban community, that could pressure their suburban local government to donate vacant land to a land trust. It could be a very effective way of creating affordable homeownership opportunities in expensive suburban communities for families that have historically been excluded from those communities. And the only way to do that, those local suburban governments will donate... Probably won't just donate land to a land trust without some local residents advocating that they do so.
Local suburban governments are also sitting on a lot of vacant land. We describe ingest action in Modesto, California. The city owns a vacant golf course. And in Woodbridge, Connecticut, the town owns a vacant country club. Both of these cities are trying to figure out what to do with this vacant land. They could donate part of it to a land trust to create permanently affordable housing in those communities. Those are just a couple of examples.
We can also pressure our local institutions to donate to a land trust. And one way to do that is going back to those restrictive covenants, the deeds on a home that said that home when it was built could only ever be sold or occupied by whites. Well, those deeds often list the developer that first built the house, the bank that first financed it, the realtor that first sold it, the builder who built it. And those companies are often still in business in our communities. And if they aren't, then they've often been acquired by another company that is still in business. So we can find those companies and pressure them to contribute to remedies for the segregation that they help to create. A lot of these companies have issued letters denouncing racism and promising to do better. Well, this is one of the ways that they can do that as long as local residents are pressuring them to do so. That's sort of the first step to get them to live up to this obligation.
So that's an example of a place-based strategy. The other category of strategies we talk about are called mobility strategies. They're concerned with opening up exclusive, usually predominantly white neighborhoods, usually suburban neighborhoods to more diverse residents. We can do that through things like zoning changes, changing single family only zoning, providing subsidies to African Americans to move into these neighborhoods. Inclusionary zoning is also effective at this kind of strategy. And then we need to protect the integration of those neighborhoods and prevent white flight, prevent those neighborhoods from resegregating to become all African Americans so that we can create integrated healthy neighborhoods. And we have a whole chapter on how to do that, some examples of communities that have effect effectively and successfully done that.
So I'll go into one example of a mobility strategy, and that is one that has to do with the Section 8 Housing Voucher program, Housing Choice Vouchers. This is a program administered by local housing authorities funded by the federal government. It's the largest rental housing subsidy for low income families, the largest program in the country. 2 million low income households who are disproportionately African American receive Section 8 vouchers. And the Section 8 voucher allows the recipient to rent a unit in the private market. So unlike a public housing recipient whose benefit... It comes in a unit and is tied to a place, a building. Section 8 housing voucher recipients get a voucher that they can use to rent anywhere in the jurisdiction of the housing authority, and sometimes outside of it.
So most of us want to live in neighborhoods with low crime, with well-resourced public schools, access to open space and jobs and transportation. Children who grow up in these areas, they have better educational health, income, outcomes. Parents have less stress and depression. We call these areas of high opportunity. But these communities are often also areas of high cost. And so they basically cost... price low income households out of these high opportunity areas because of the high cost of living there. Well, Section 8, the program has the potential to address this by giving low income families a subsidy to be able to rent anywhere in the private market, including in high opportunity areas.
It had the potential to do this and indeed the intent when it was created, to allow mobility of low income households to live in higher opportunity neighborhoods. But in reality, only 5% of Section 8 households live in these areas of high opportunity, and white Section 8 recipients are more likely to than African Americans. There's several reasons for this. One is just discrimination; plain and simple. Discrimination against tenants who use Section 8 to pay their rent is an allowed form of discrimination by the federal government. But many states, about 20 states and over a 100 cities and counties have outlawed this kind of discrimination. California is one of those states. Then these are called source of income discrimination laws that say that you can't discriminate against a tenant because they use Section 8 to help pay their rent.
But passing these laws is only the beginning. And many of these places, including throughout California, where we have these laws on the books, discrimination against Section 8 tenants is still common. And so the only way to stop that is that we need more education about the laws, monitoring and enforcement of them. One way to do all of that is to support fair housing organizations that often do this work: the education monitoring and enforcement of anti-discrimination laws. One way fair housing organizations do this is by sending paired testers to landlords who are advertising that they have a unit for rent and they send two potential tenants who are, one is white, one African American, they have similar financial histories. One may say they use Section 8, one not. And then they see how they're treated. One might be offered the unit and one might be told that it's already been rented. And that's how we can find where discrimination is occurring, and then we can enforce anti-discrimination laws.
But fair housing organizations are under resourced. They need funds to be able to do this testing. They also need volunteers to do the testing, and that's another way we individually can contribute to remedies and to challenging segregation by volunteering as testers with fair housing organizations. So another part of the Section 8 program that makes it hard for Section 8 tenants to move to higher opportunity areas is the voucher amount itself. So when a Section 8 recipient gets a voucher, they pay 30% of their monthly income towards their rent, and the voucher pays the difference up to a maximum voucher amount. And that maximum amount is based on the median rent of the entire metropolitan area's rents. So you take the lowest rent of a metro area, the highest rent, go in the middle rent, the median, and 10% below that is the maximum rent of voucher will afford.
So by definition, over half of the rents in a metropolitan area are out of reach of a voucher holding tenant. Not surprisingly, those are more likely to be in higher opportunity areas. Well, in 2010, there was a lawsuit in Dallas about this that alleged that this voucher payment standard caused the segregation and isolation of African American and Latino voucher holders into high poverty neighborhoods. As a result of this lawsuit, the housing authorities in the Dallas area adopted a small area rent standard where instead of basing the maximum voucher amount on the entire metropolitan area's rents, it took smaller areas. So a zip code or a group of zip codes, and took the median rent in that small area, and that's the maximum rent a voucher could afford in that area. So a voucher would pay a higher rent in higher cost areas, a lower rent in lower cost areas, which makes sense. And it allowed for more mobility of voucher holders.
So now 180 housing authorities in 24 metropolitan areas around the country are required to use these small area rent standards, but any others can do so voluntarily. And so it just takes the housing authority going through some administrative steps with HUD to adopt these small area rent standards, but then it can adopt them metropolitan area wide and really open up a lot of opportunity for mobility for voucher holding tenants. And so another thing a group that's organized around the redress of segregation could do is advocate that it's a local public housing authority, adopt these small area rent standards. So that's another example of what we can do to challenge segregation.
So I have one more. I know I want to leave time for questions, but I want to get into this one really quickly. This one is a strategy that spans place-based and mobility strategies. It has to do with increasing homeownership for African Americans in all types of neighborhoods. And we can do this in a lot of ways, like down payment assistance, homeownership counseling, subsidies towards homeownership for African Americans. And there's ways that African Americans have been denied homeownership opportunities in obvious ways, like the racially restrictive covenants I talked about earlier that are no longer legally enforceable, but have had an ongoing effect on homeownership opportunities and wealth building potential. But there's also less obvious ways that African Americans are kept out of homeownership that are still in effect, and one is the credit scoring system.
So the credit scoring system is an example of a policy that is race neutral on its face. It has no racial intent, but it has a racially discriminatory impact. And here's why. When we think of a credit score, we think it's an objective rating of our financial history. That's what it's supposed to be. It tells a lender if we're a good candidate for a mortgage or for a loan based on our financial history. If we've paid our debts in the past, we're more likely to pay them in the future, so we're more likely to get a loan. If you have a high enough credit score, you're eligible for a mortgage, and if it's really high, you'll get a good interest rate.
Well, the fact of the matter is it is based on your financial history, but it's only based on a certain type of financial history, and it's based on the type of financial history that whites are far more likely to have than African Americans. African American neighborhoods of all income levels have fewer bank branches than white neighborhoods. So people in those neighborhoods more often have to rely on non-traditional financial institutions like payday lenders. And even if you pay back your loan with the exorbitant interest rates charged by a payday lender and you pay it back in full and you never miss a payment, that doesn't benefit you on your credit score because that's not a type of financial history that's taken into account in a credit score.
And another reason. If you've been a mortgage holder in the past, if you've owned a home in the past and you've paid your mortgage on time, that'll benefit you in your credit score. Whites who are applying for a mortgage are more likely to have owned a home in the past than African Americans. So an African American who's buying a home for the first time and has never owned a home, has never held a mortgage, but has been a renter their whole life and have paid their rent on time, never missed a rent payment or a utility bill payment, none of that financial history counts towards your credit score. So this is why, as a result, we now have a situation where about a third of African Americans compared to 17% of whites have no credit score at all. So not enough eligible financial history to even create a score. And of those that have a credit score, about 25%, 23% of African Americans, compared to over half of whites, have credit scores high enough to be eligible for a mortgage.
So this is, as I said, an example of a policy that's race neutral on its face, but racially discriminatory in effect. And so in order to open up home buying opportunities for African Americans, we should address this. Now there's a movement on the federal level to change the national credit scoring systems to begin to factor in rental payment history, but this is a policy change that's been over 15 years in the making. So if we wait for federal policy change, we'll be waiting a long time. So instead, we can work with our local financial institutions, credit unions, banks, local bank branches to begin to factor in rental payment history, utility bill payment history into their own calculations of credit scores. And we give examples, ingest action of local bank branches and credit unions that are doing that. It goes a long way to opening up home buying opportunities for African Americans.
So I will wrap up now, but those are a couple of examples from Just Action. There's many, many more in the book. There's more we couldn't include in the book. We're continuing to write about in our Substack column where we write a new column every couple of weeks. But I hope that the takeaway from anyone reading Just Action or anyone listening today is that there's a lot that can be done. There's a lot to do. We have a lot to do, we have far to go and so much that needs changing in order to truly redress segregation. But there's actually a lot we can do and it doesn't really matter so much where we start, just that we get started somewhere. And so we hope that this gives people some ideas of how to do that locally.
Thank you so much, Leah. Let's get into the questions immediately.
I'll start out. So I also want to flag that in the book, it's not just a lot of prescriptive policies, but examples of where these different things have actually been adopted. So the example of the Cleveland Shaker Heights integration effort in the 1980s and others. One of the things that you mentioned... So you covered a lot of grounds, Small Area Fair Market Rents, financial institutions, homeownership programs, counseling. One of the specific things that's come up in California is around erasing restrictive covenants of their racial history, and this has become really controversial. I actually asked Richard if he wanted to co-author a piece on this and he deferred because you were both working on the book. But the California state legislature has essentially created a process where the recorder's offices in each county are basically instructed to create a process where if someone has a home, and in the CCNRs of their home... Because many generations ago, it has a restricted covenant, it can be erased. And there'll be a file put in there, like a white sheet that says, "The racial language has been erased."
I raised the concern and wrote a blog that got a lot of social media attention, that this was problematic because only now do we have these large scale documentation projects that are incredibly labor-intensive, that are going through... It's not like redlining where there's one map that covers tens of thousands. There's a lot of elbow grease that goes into digging up these deeds, going back through each successive ownership, and then figuring out what the specific languages and how many houses were covered by that deed or different language. And only in a few cities have these large scale documentation projects actually canvased the entirety of the region. And it will take, in my estimation, probably the next 40 to 50 years before we get systematic clarity on just exactly how widespread these were.
So I'm wondering what your position is. Richard, I think, basically strongly agreed with me, but didn't want to take the time to write something at the time. What are the implications of erasing this history, and what happens then?
And then, if folks have questions, if you could just get your questions ready, I'll invite you to pose it directly after Leah answers this one.
Yeah, it's a great question. We do write about this in Just Action, and we also give examples of communities that have created these inventory projects. And one in Charlottesville, Virginia, they created a crowdsourcing campaign where volunteers were trained to read deeds and flag them if they had a restrictive covenant, if it was racial. And that created a whole group of people who were educated about this and inspired to do something about it. So I think that there's a danger in just erasing all of that history. I do think it's uncomfortable. A lot of people would like it to be erased from our memory, but when we do that, it leaves us back to this sort of myth that we had that segregation happened by accident. It's the discovering of the documentation and evidence of how it came to be that helps people be inspired to do something about it, and be inspired to take action, and be inspired to see that intentional action can undo it.
And if we erase all of that history, we sort of lose that opportunity and we lose this sense of obligation we have to remedy it, because we no longer are faced with how intentionally it was created and all of the actors that were behind creating segregation. So I think you're right, that it's a dangerous proposition to just erase it, not only for the work involved but for what's lost in losing that history from our collective memory. Now there's one. I think it's Marin County, that passed a law where they will... If you make the request, if a home homeowner makes a request, they will staple a statement on top of the restrictive covenant saying, "This community no longer supports the values behind this racially restrictive covenant." And that is a little bit better because it helps to challenge the history, but it doesn't completely erase it from the documentation and from our memories.
Okay. EJ, you go ahead. I see your hand up.
Thanks Stephen. Thanks Leah for this really great presentation. I appreciate all the insights and all the information you provided us. My question has to do with, I guess, the recent Supreme Court decision around affirmative action and some of the points that you and Richard raised in your Substack column. And so I think in the aftermath of this decision, the institute's been thinking a lot about potential steps and policies that various institutions can take to stay within the bounds of the law, but to try to maintain or even increase the diverse student body. But I'm recalling one of your Substack entries where you talked about sort of resisting the court order and contradicting it, not necessarily staying within the bounds of it, but pushing back and not adhering to it. And I guess on the face of that, it sounds like a provocative or controversial statement, but you gave historical precedent of groups or people in elected office and positions advocating, ignoring the court decision. So I'm wondering if you could talk a bit about that as a strategy.
Sure. Thanks for that question. Yeah, we have a chapter, I just put our a link to our Substack page there. So you can see we have a new one about this issue come out yesterday. We have a whole chapter in Just Action that we call Dare to Defy. It goes through 165 years of Supreme Court history decisions that are inconsistent in their interpretation of the constitution when it comes to racial equality. And given that, once we can see that the court has never been consistently on the side of a advancing racial equality and interpreting the constitution as it should be interpreted to advance equality, that given that we should defy the Supreme Court rulings that we feel are not interpreting the Constitution correctly.
So when it comes to affirmative action, we do advocate that... So the reason that the Supreme Court has adopted or accepted affirmative action until now is to increase diversity in oncology university campuses. And we believe that the true justification for affirmative action should be as a remedy for past discrimination and for the unconstitutional actions of the government in the past that makes it so that applicants to colleges and universities are not applying from a level playing field. And this is one way of remedying that. Now when you use that justification, then we see based on the true history of the country, that we are justified in doing that. And it will take defying the Supreme Court and defying the Supreme Court's rulings, but we advocate that college and university presidents should continue to have race-based affirmative action in order to advance these remedies. Because we argue and state that race-based crimes of the past require race-based solutions. We cannot be race neutral and try to remedy the race-based crimes of the past. That just won't work.
And so we do give examples throughout history. I think the one you may have been referring to is the Dred Scott decision that said that African Americans couldn't vote in elections because they didn't have full citizenship rights. They weren't voting when the constitution was adopted. And that history was false. The Supreme Court cited a false history. When the Constitution was adopted, free African Americans, including in North Carolina, voted on its ratification. And so because of that false narrative, that false history, a false reading of the constitution, many legislators including Abraham Lincoln, before he was president, advocated for defying the Supreme Court's Dread Scott ruling and allowing African Americans to vote. And many states even sort of reduced the barriers that they had to African Americans voting at the time to defy the Supreme Court, to kind of socket to the Supreme Court for issuing this bad decision.
And so there is precedent to defying Supreme Court decisions that we believe are unconstitutional and wrong, and we think that racial justice advocates today tend to be more careful about complying with the Supreme Court precedence. And we go through this history in a very detailed way, both in our Substack and in our book, to show that there really isn't a consistent precedent from the Supreme Court when it comes to racial equality, and so it's up to us to advance the remedies that we believe are required of us. And if that leads to more legal action, then we'll have more legal cases and dissents, and potentially victories that will then justify future race-based remedies as well.
And there are examples from today of other activists or advocates in on other issues that do this. So when you think of abortion, for example, when Roe v. Wade was the law of the land, abortion opponents passed laws in violation of Roe v. Wade all across the country, even though it was in defiance of the Supreme Court. And now under Dobbs abortion, proponents are providing abortions in those states that have anti-abortion laws. So we do sort of do this as a country, defy Supreme Court rulings when we believe that they are wrong, and we believe that we should do that today.
Thank you EJ. I think we're running really long time. I think we have time for maybe one more question.
Okay. So I'll present this quickly. So you talked about the Small Area of Fair Market Rent program, Leah, which was piloted originally during the second Obama administration. I'm wondering if you think that the research shows... So one of the questions and concerns of course is that ostensibly it raises costs, because it means that in higher opportunity areas, rents are more expensive and therefore the subsidy will be greater to be able to pay for that. And you said that jurisdictions can opt into it, I didn't realize that that had expanded. What is your sense of how that program is working right now and the effectiveness of it? And how many jurisdictions... You said 24 jurisdictions now, because the original pilot was only five.
Yeah, 24 metro areas are required to use it now and many more adopted voluntarily or some more. It's hard to know how many, but I know some do. And the cost issue is an issue locally initially. So when some tenants move to higher cost areas using a higher voucher amount, it costs the housing authority more. And then in the next year, they'll get more funding from the federal government to cover those voucher amounts. It does increase costs, but over time it also decreases the rent amount in lower cost areas. So right now, by using that median market rent, it's also paying higher rents than the market rent in low cost areas of those metropolitan areas. So landlords in those areas are getting higher rents from Section 8 tenants than they would on the market. So they get pushback from those landlords to change that, not surprisingly. But as those rental amounts, those subsidy amounts go down and subsidy amounts in higher cost areas go up, it does balance out sometimes.
So the costs aren't as great as that we're originally feared.
Any other questions? I know folks have questions.
I'll just add... If anybody raises their hand, I'll stop. But the Section 8 program also has a homeownership component, which people don't really know about. And housing authorities can opt into using that too, where the voucher can be used towards a mortgage. And not many housing authorities do this. They cite higher costs or higher administrative costs, or they just don't have staff trained in the homeownership market like they do in the rental market. So it's a little bit harder for them to do, but it is possible and it helps get low income families into homeownership in a stable way, and it's a great program. And so that's another thing we can advocate that our local housing authorities do.
Well, thank you so much, Leah. This was fascinating. I know that some of our... Eli, who's left, has investigated the Section 8 homeownership program utilization in the Bay Area, which is, as you can imagine, minuscule numbers.
Really interesting stuff. Your book is available in our Kindle library: we purchased it. So folks should go ahead and grab a copy if they haven't already, or get a Kindle and read it on our device library. But we will be looking for you out there continue to talk about this work, and hopefully some folks will sign up for your Substack. So thank you so much. It was great to be with you this morning.
Thank you so much for having me. Thanks everybody for coming.