In 1954, one Peninsula real estate agent seized upon the sale of a single home on the east side of Palo Alto.
Floyd Lowe, President of the California Real Estate Association at the time, quickly began amplifying racial tensions by warning residents that the one black family moving into their neighborhood marked the beginning of an impending "Negro invasion" into their community. The sordid strategy — known in time as "blockbusting" — worked as Lowe had intended it to: white families quickly sold at lesser values, enabling Lowe to market these homes to black buyers at inflated prices. Within a few years the neighborhood was predominantly African American, yet fast-tracked towards becoming a slum as residents struggled with exorbitant mortgages, schools became overcrowded and white-owned businesses fled the local economy. In time, Lowe's scheme — which was never opposed by government regulators — has been conveniently forgotten despite being essential to understanding the current social fabric of modern-day Palo Alto.
In his 2017 book, The Color of Law: A Forgotten History of How Our Government Segregated America, local author Richard Rothstein deftly chronicled how Lowe's legacy was merely a single case study in how our nation was, in fact, very purposefully segregated along racial lines in the modern era. No, not by chance or even ill-intentioned private forces, but by public housing policy that went all the way to the federal level.
Rothstein, a research associate with the Economic Policy Institute, has documented a lengthy list of historical examples which suggest that housing segregation was not only intentional, but that it still remains at the heart of so many racially oriented disparities within our nation: education, income, health and more.
And while it's easy to think that the historical focus of his book would focus on red states with slaveholding legacies, Rothstein presents the Bay Area as Exhibit A of how tangible segregationist housing policy had been implemented in liberal urban areas throughout our nation. Indeed, there is no shortage of local examples: San Francisco, Richmond, Daly City. In fact, the example of Lowe and East Palo Alto was not the only instance of segregationist policy on the Peninsula. Rothstein also explains how in 1948 economic and real estate forces in Palo Alto purposefully thwarted Wallace Stegner's efforts at developing a racially-integrated working-class housing settlement near the Stanford campus.
When we caught up with Rothstein by phone recently, The Color of Law was ranked #9 on the Amazon Book list, where it has lingered for the past month.
We spoke with him briefly to expand upon how the makeup of today's Bay Area communities are tied to these historical policies, why many modern housing regulations still perpetuate segregation and how social media can keep these issues on the front burner.
Take a look…
To begin, I was curious about when this history first came onto your radar? And I ask that because when it comes to discrimination in this country and social struggles in general, housing discrimination and segregation tends to be less visible of an issue.
I was, as you may know, an education policy writer. As I explain in the book, I came to the conclusion that school segregation was one of the biggest problems we face in American education and that segregation largely explains the achievement gap. And I realized that schools were segregated because the neighborhoods in which they are located in are segregated. So I approached this really not as a housing issue, but as an educational issue. The more I got into it, the more housing segregation became an issue unto itself.
In that regard, your book functions so well as a connecting of the dots — how one issue leads to another — and why so many of those dots do indeed lead back to housing segregation.
Well, that's right. The more I studied about this the more I understood that it wasn't just an achievement gap at schools that were a result of residential segregation. It's health disparities between African Americans and whites, because so many African Americans are concentrated in neighborhoods that are less healthy and more polluted, with less access to fresh food. African Americans have higher rates of heart disease and diabetes, and part of the explanation for that is that they are concentrated in neighborhoods that are less well-resourced.
Also, mass incarceration would not exist to such an extent for African Americans if so many young black men weren't concentrated in single neighborhoods where the police serve as an occupying force and maintain policies that are consistent with colonial police forces. And if young black men were not concentrated in single neighborhoods…I'm not saying that police would not discriminate against them, but it would not nearly be to the extent that we have.
The biggest single cause of racial inequality in this country is the ongoing enormous wealth gap between African Americans and whites. African Americans have household wealth that is 5% on average of white household wealth. And that enormous disparity is largely attributable to the fact that African Americans have been restricted to neighborhoods where if they own homes at all they don't appreciate in the same way that homes in white neighborhoods do, and that African Americans in the 20th century were prohibited from moving into neighborhoods where appreciation was rapid. So the wealth gap, and all of the other social inequalities that stem from the wealth gap, they all are continuations of residential segregation.
And finally, I would also say that the enormous and frightening political polarization in this country today is in part a consequence of racial segregation. It's hard to imagine how we can ever develop a common national identity that is necessary for the preservation of this democracy if so many blacks and whites live so far from each other, with no ability to understand each other or empathize with each other's life experiences. So I think residential segregation is the fundamentally most serious problem this country faces. And this is not something that I thought before getting into this. I had thought it was just an educational issue.
You point out early on in the book that this history wasn't a product of the former slave-owning south, but notably designed and implemented by liberal leaders. And as a way of conveying that to our local readers, to what degree would you say that the makeup of modern Bay Area communities had been shaped by these policies?
Well, as you know I focus a lot on the Bay Area. Many of my examples come from the Bay Area. I definitely think that the Bay Area has been shaped by this.
The suburbanization of the country that took place in the late 1940s and through the 1950s that was underwritten by the Federal Housing Administration was created on a racial basis. So you talk about the Bay Area, talk about Westlake in Daly City, a development that was financed by the Federal Housing Administration. The developer of that project, Harry Doelger, could never have generated the capital to build in Daly City on his own. No bank would have been crazy enough to lend somebody the money to build 15,000 homes which had yet to have any buyers. The only way you could do it was to go to the Federal Housing Administration and make a commitment to never sell a home to an African American, to concede to the Federal Housing Administration's requirement that every deed in the home prohibit resale or rental to African Americans. And on that basis, Daly City was built on a racially segregated, exclusively white basis. The homes at the time were relatively inexpensive (in today's money about $100,000 in Westlake at that time) and African Americans could have afforded that just as whites could. And if they were returning WWII veterans, which were much of the buyers of those developments, they required no downpayment via a VA loan. So this was not an economic difference. Of course, to some extent whites were able to afford homes more than African Americans, but many African Americans could have afforded to move to Westlake, but they were prohibited from doing so by the Federal Housing Administration and were instead concentrated in government created ghettos in the Bay Area.
And it's not just Westlake. Other areas in the East Bay — San Leandro, San Lorenzo — were similarly exclusively white-based on a federal requirement.
During World War II, with the influx of black and white war workers, to work mostly in the shipyards, the government had to supply housing for these workers and it did so always on a segregated basis, with separate housing projects for blacks and whites. The federal government built four projects, I believe, for whites only in San Francisco. And then one designated for African Americans in the Fillmore district, which became the black neighborhood in S.F.
So the Bay Area is no exception at all to these events.
Prior to reading your book I was unaware of the incident of "blockbusting" that had occurred in East Palo Alto during the 1950s, and I was struck by how foundational it was to where the city finds itself today.
Well, absolutely. East Palo Alto was transformed from a white to a black neighborhood through blockbusting that was led by a realtor who was the head of California's realtor association.
The whole theme of my book is that this is government action. So in the case that we are talking about, every real estate agent in California is licensed by the state, and (the realtor's association) did not pull the license of the real estate agent who led that effort in East Palo Alto, which means the licensing agency was violating the 14th Amendment. That was their obligation. So I don't consider this purely private activity.
Had you come across any examples where there was intervention by any of the regulatory agencies?
No, that's the problem. There was not. In fact, the National Association of Realtors had a code of ethics which prohibited the sale of homes in white neighborhoods to African Americans families. Every real estate agency in the country was obligated to subscribe to that code of ethics.
Along those lines, how have these incidents and this history just fallen through the cracks of popular memory?
I don't know. All I can say is that they were. We never dealt in this country with the legacies of slavery or Jim Crow.
And now, not just in the post-George Floyd era — but the last five or so years…really since Ferguson — we're dealing with it more accurately and passionately than we ever have before in American history. I guess you can blame that on social media and the fact that people walk around with cell phones. But as you know, the subtitle of my book is A Forgotten History of How Our Government Segregated America. Not a hidden history, no conspiracy…it's been forgotten. It is a difficult history to deal with, but people would rather forget it if it's not in their faces, but social media puts it in their faces.
I'm not a professional historian, but one thing I take some pride in is that — almost three years now that the book has been published — not a single historian has challenged a single fact in the book. So I think it is incontrovertible that it is accurate. And it's been forgotten.
In terms of our current state of affairs, are there certain modern policies that are playing a role in perpetuating segregation today? For instance, here in Palo Alto there is a 50-foot height limit on new developments as well as rigid parking requirements.
Oh, yes, you mentioned one of the biggest ones — zoning. That certainly perpetuates segregation. That's one.
For low-income families, the well-known Section 8 voucher program — as a subsidy to rent apartments — that re-enforces segregation because most Section 8 vouchers are only usable in low-income existing segregated neighborhoods. The biggest program for subsidized low income families is something called the low-income housing tax credit, and most of those developments are placed in low-income segregated neighborhoods, because there's no community opposition to placing it there. So that re-enforces segregation.
But I will say this, even if we were to reform these programs and change zoning, that wouldn't make much difference because what is also required is remedies for the enormous wealth gaps and income gaps that have been created by this segregation. Many fewer African Americans today, than in the past, can afford to move to Palo Alto even if it did change it's zoning. And that was not true in the past. So we need compensation, financial remedies, subsidies for working families (I'm not talking about poor people). We need subsidies for working-class African Americans to be able to buy into communities from which they have been excluded and which would have been affordable to them. Simply opening up those communities by relaxing zoning is not going to accomplish what needs to be accomplished.
Early in your book, you write that the idea to "‘Let bygones be bygones' is not a legitimate approach if we wish to call ourselves a constitutional democracy." And in that regard, I have to ask about your level of optimism in terms of how we move forward from here on these matters as a nation.
Well, I'm very optimistic. And I would have said this even before the current awakening, because as I said to you earlier, we are having a more accurate and passionate discussion about race today in this country then we have ever had in the past, ever.
My book has had a stunning reception, completely unexpected by me. But it's not just my book, it's Michelle Alexander's book The New Jim Crow, it's Brian Stevenson's book Just Mercy, it's the work of Ta-Nehisi Coates. All of these have penetrated the American consciousness in a way that has never before been done on issues of race. We have white elected Southern politicians removing statues that commemorate the defenders of slavery. That has never happened before.
Now, raised consciousness does not lead to action by itself. So my optimism is qualified by the fact that we need to move beyond awareness to action. And the action is difficult. But, am I optimistic? Yes, more than ever before. Am I confident? Absolutely not.
(Editor's Note: This interview was edited for length and clarity.)
Richard Rothstein's book The Color of Law: A Forgotten History of How Our Government Segregated America is available now via Liveright Publishing.
This article was originally published June 25 on TheSixFifty.com, a sister publication of Palo Alto Online, covering what to eat, see and do in Silicon Valley.