Systemic discrimination lives and breathes not always on the surface but at deeper, less apparent levels in recorded covenants and applicable zoning and land use ordinances. Many believed the passage of the Fair Housing Act (FHA) in 1968 would erase racial discrimination, but the FHA could not undo the entrenched segregation underlying our neighborhoods.
Because the systemic racism extending multiple generations deep cannot be repaired overnight, African American families who were prohibited from buying homes in the suburbs in the 1940s, 50s and 60s, by the Federal Housing Administration and others, gained none of the equity appreciation that whites gained.
Minority homeownership lags behind
Even after the 1968 passage of the Fair Housing Act, black Americans and other minorities have continued to experience housing inequalities. In the first quarter of 2020, the U.S. Census Bureau reported that black households had the lowest homeownership rate at 44%, nearly 30 percentage points behind white households. The National Association of REALTORS®’ (NAR) “Snapshot of Race and Home Buying in America” report found the U.S. homeownership rate was 64.2% in 2019. At 69.8%, the rate for non-Hispanic white Americans exceeds the national rate. However, the Black homeownership rate — 42% — represents a Black-white homeownership gap of almost 30%. The homeownership rates for Asian Americans and Hispanic Americans are 60.7% and 48.1%, respectively. In addition, Black homebuyers purchased residences with the lowest median price of $228,000. Black home shoppers also had the lowest median household incomes at $75,000. As a result, their homes are also the smallest — at 1,800 median square feet.
Improving Black homeownership
NAR, the Urban Institute and the National Association of Real Estate Brokers developed a five-point plan to address the Black homeownership gap. The plan promotes measures to:
- Advance policy solutions at the local level.
- Tackle housing supply constraints and affordability.
- Promote an equitable and accessible housing finance system.
- Provide further outreach and counseling initiatives for renters and mortgage-ready millennials.
- Focus on sustainable homeownership and preservation initiatives.
Obviously Black homeownership will need to be addressed in multiple steps and at various levels. Some measures would benefit lower-income buyers as well as workforce housing purchasers by building and opening up more affordable housing. NAR, for instance, believes policy proposals such as a first-time buyer tax credit of up to $15,000 would help address the situation. Homebuyers would receive the tax credit when making the home purchase, rather than having to wait until filing federal income taxes the following year. NAR also believes incentives to create more affordable housing units should also be advanced. Other measures that would go far in these efforts would be to remove zoning impediments to minority homeownership. Some of these ordinances may violate the FHA while others are more subtle but still have segregation-enhancing effects.
Fair housing meets state and local zoning and land use
The regulation of land use and zoning is traditionally reserved to state and local governments, except to the extent that it conflicts with requirements imposed by the FHA or other federal laws. As established by the Supremacy Clause of the U.S. Constitution, federal laws such as the FHA take precedence over conflicting state and local laws. Even absent a discriminatory intent, state or local governments may be liable under the FHA for any land use, zoning law or practice that has an unjustified discriminatory effect on a protected group. HUD and the Department of Justice in 2016 issued the “Joint Statement of the Department of Housing and Urban Development and the Department of Justice on State and Local Land Use Laws and Practices and the Application of the Fair Housing Act.” A land use or zoning practice results in a discriminatory effect if it caused or predictably will cause a disparate impact on a group of persons or if it creates, increases, reinforces or perpetuates segregated housing patterns based on a protected characteristic. A state or local government has the opportunity to show that the practice is necessary to achieve one or more of its substantial, legitimate, nondiscriminatory interests. If these interests could not be served by another practice that has a less discriminatory effect, then the practice does not violate the FHA.
Examples of land use practices that may violate the FHA under a discriminatory effects standard include minimum floor space or lot size requirements that increase the size and cost of housing if such an increase has the effect of excluding persons from a locality or neighborhood because of their membership in a protected class, without a legally sufficient justification. Similarly, prohibiting low-income or multifamily housing may have a discriminatory effect on persons because of their membership in a protected class and, if so, would violate the FHA absent a legally sufficient justification. The standard for evaluating housing-related practices with a discriminatory effect is set forth in HUD’s Discriminatory Effects Rule, 24 CFR § 100.500.
When enacting or applying zoning or land use laws, state and local governments may not act because of the fears, prejudices, stereotypes or unsubstantiated assumptions that community members may have about current or prospective residents because of the residents’ protected characteristics. Doing so violates the FHA, even if the officials themselves do not personally share such bias. For example, a city may not deny zoning approval for a low-income housing development that meets all zoning and land use requirements because the development may house residents of a particular protected class or classes whose presence, the community fears, will increase crime and lower property values in the surrounding neighborhood.
Lift the zoning constraints
While not as overt, contemporary local zoning and land use regulations can contribute to the same patterns of segregation established in the past by redlining, restrictive covenants and other systemic discriminatory measures. Some of the local ordinances and policies that can serve to reinforce segregation include minimum lot size, expensive building code requirements, building height limits, single residence per lot requirements, minimum square footage requirements, and high hurdles for accessory dwelling units, such as in-law apartments.
These requirements make it difficult to build multifamily units that would allow minorities and lower-income residents to live in suburban developments with access to their jobs, quality schools and transportation. In addition, large lot size requirements reduce the supply of available land, drive up housing costs, and further keep out low-income and minority families.
Reaching out to local building code and zoning officials and amending ordinances to modify the standards and hurdles in these ordinances would contribute to making them more consumer- and developer-friendly and help open neighborhoods to more diverse inhabitants. Adoption of such incremental changes could contribute to making Wisconsin more integrated. These communities would enjoy rising property values and the benefits of living in a diverse society.
Sources
Debbi Conrad is Senior Attorney and Director of Legal Affairs for the WRA.