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Why the U.S. needs an economic fair housing act

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A new report lays out a stubborn barrier to equality and upward mobility


Anniversaries are great times to reflect. With the looming 50th anniversary of the landmark Fair Housing Act coming up next year, researcher and scholar Richard D. Kahlenberg, a senior fellow at the Century Foundation, decided to examine what worked and consider ways it can be improved.

As Kahlenberg lays out in a new report, An Economic Fair Housing Act, the segregation lawmakers hoped to eliminate with this civil rights legislation hasn’t so much disappeared as it has changed. While early 20th century housing laws pushing government-sponsored racial discrimination were eliminated with the FHA, they have since been replaced by exclusionary zoning laws that, by banning apartment buildings in areas meant for single-family homes and mandating minimum lot sizes for homes, separate Americans by class, and in many cases, create racial segregation as a by-product.

“Most people will assume we have rich and poor neighborhoods because we have rich and poor people,” says Kahlenberg. “But public policy is pushing economic segregation. This is a place where government is making things worse by putting up walls. Just the idea that we’re going to set up public policy rules to keep rich and poor apart isn’t good for our society.”

Progress on reducing residential racial segregation has been muted, he says, because “skyrocketing levels of income segregation in housing is compounding racial segregation.” While there has been progress on racial lines—between 2000 and 2014, black-white segregation declined in 45 of 52 metropolitan areas—areas of extreme poverty are growing. Neighborhoods with a poverty rate double the national average in 1970 stayed poor 75 percent of the time, according to City Observatory research, while losing roughly 40 percent of their population.

Exclusionary land use can be found in most major U.S. metro areas, especially in the northeast.
The Century Foundation

Kahlenberg’s report analyzes a number of different data sources, but one of the most striking, and troubling, is research by Jonathan Rothwell and Douglas Massey, a sociologist at Princeton. By studying zoning’s impact on economic segregation, the researchers discovered that zoning was not just a factor, but a key reason for an increase in class-based segregation. They found that “a change in permitted zoning from the most restrictive to the least would close 50 percent of the observed gap between the most unequal metropolitan area and the least, in terms of neighborhood inequality.”

This increasing segregation is troublesome because where Americans live impacts so many factors in their lives: their quality of life, access to transportation, health care, employment opportunities, and access to quality schooling, long seen as a “great equalizer” in society. Since roughly 75 percent of American schoolchildren go to their neighborhood public school, “housing policy is school policy.”

Kahlenberg’s solution to this problem is promotion of inclusionary zoning, which requires new housing construction include affordable units, and an economic fair housing act that eliminates or discourages rules that unnecessarily lead to people being excluded from entire neighborhoods and their schools. He points to Montgomery, Maryland, as an example of success; by adding so-called density bonuses to its zoning code, which allow builders to build more units if a certain percentage is dedicated to affordable housing, the county gives local developers a financial interest in promoting equality and access.

He believes its an uphill fight. Research show exclusionary zoning artificially inflates property values, and expects a strong legal and political backlash from property owners. But to truly finish the important work the Fair Housing Act started, he sees the enactment of these laws as an important, and necessary, step. And, with housing prices continuing to rise, he believes the issue will continue to be at the forefront.

“The affordable housing crisis has really captured people’s attention, and makes it more likely we’ll address these housing issues,” he says.