The history of housing discrimination

Redlining, blockbusting, racial home-buying covenants - these are some of the well-known tactics that were used to create and maintain systemic racism in the United States. But in this typically liberal bubble known as the San Francisco Bay Area, people might be surprised to learn how segregationist attitudes and tools associated with the Jim Crow south played a role in the development of the Peninsula and where African-Americans could and couldn't buy a house.

Redlining, blockbusting, racial home-buying covenants – these are some of the well-known tactics that were used to create and maintain systemic racism in the United States. But in this typically liberal bubble called the San Francisco Bay Area, people might be surprised to learn how segregationist attitudes and tools associated with the Jim Crow South played a role in the development of the Peninsula and where blacks could – and couldn’t – buy a house.

What author Richard Rothstein calls the “forgotten history of how the government segregated America” is the subject of his provocative 2017 book, “The Color of Law,” which was the focus of a recent workshop by San Mateo County Housing Leadership Council. 

To be sure, racial attitudes in Northern California in the early 1900’s were more relaxed than elsewhere in the country, including America’s southern states. But the Bay Area did experience episodes of overt racism, and attitudes that reinforced racial segregation contributed to how the communities that formed San Mateo County grew.

East Palo Alto

Truck farms, commune dwellers, and transient newcomers were typical of the residents in early 20th century East Palo Alto, then considered the eastern outskirts of Palo Alto. It was part of a rural, unincorporated area known for its rich soil and abundant, small farms, according to Palo Alto Historical Association Historian Steve Staiger.

“Truck farms grew high-value crops on an intense, concentrated scale,” said Staiger. “The rich soil and abundant water were the perfect foundation for a Utopian society with a shared social philosophy to make a community. That community came to be known as Runnymede.” Runnymede Street still cuts across the City of East Palo Alto today.

But by the 1920’s, the growth of Asian- and African-American settlements began to draw concern from local residents, leading to a Palo Alto Chamber of Commerce resolution supporting a segregated district for minorities. Racial zones were never formally adopted by local governments, but private developers used restrictive covenants to prevent people of color from purchasing homes in the neighborhoods they built. As a result, there were few areas where minorities could find housing of any kind. Communities that did allow integration sprang up in North Fair Oaks and East Palo Alto, among other places in early San Mateo County.

Rothstein uses the story of the post-World War II organization, the Peninsula Housing Association of Palo Alto, to illustrate this problem. The group sought to increase the local housing supply through a cooperative that included several African American families. The co-op purchased a 260-acre ranch adjacent to the Stanford campus. But because the project included African Americans, the Federal Housing Administration rejected the request for an insured loan. At the time, FHA did not permit lending to African Americans – even those who had served in the United States Armed Forces.

Eventually the co-op was forced to sell the land to a developer who constructed single-family homes for sale to whites only. The Ladera subdivision still stands next to the campus today, although such bans have long been unenforceable.

A Race Riot Averted

At the same time the Peninsula Housing co-op was attempting to improve integration, Redwood City’s residents were experiencing their own racial reckoning.

December 1946 in Redwood City was one of racial conflict for the small community. The Redwood City Tribune and the San Francisco Chronicle recounted the disturbing saga of two African American families living in the Dumbarton Oaks neighborhood. One family, the Derbigneys, had built a home on an unzoned parcel on Stanford Avenue and was generally considered part of the community until a second black family began building a home nearby.

That set off alarms for segregationists within the community. Mrs. Derbigney was harassed with menacing phone calls and letters, a false fire hazard report and threats of hanging by members of the Ku Klux Klan, according to the Chronicle. Neighbors filed petitions and exhausted other legal options to keep John Walker, a decorated veteran of the U.S. Navy, from building his house.

A fire claimed the structure before the family could move in, setting off fears of a race riot. Tensions climbed between veterans groups who supported Walker and those opposed to the neighborhood’s  integration.

Though community members rallied to the Walkers’ side, by the 1950’s exclusionary home-buying covenants and a banking system designed to consider minorities “high risk” loan candidates would do the work of effectively segregating these communities in subsequent years.

Blockbusting and White Flight

Most historians suggest the post-war suburban boom was partially driven by “white flight,” or fears over increasing integration in industrialized cities. As Rothstein explains, this was partially born of the federal government’s emphasis on home-ownership through VA loans for returning World War II veterans and the creation of federally-insured FHA loans.

African Americans were barred from obtaining VA and FHA loans. On the rare occasion a black family could afford to rent or buy in a traditionally white community, real estate agents engaged in a tactic known as “blockbusting” to drive home prices down and white residents out.

As Rothstein writes, “blockbusting was a scheme in which speculators bought properties in borderline black-white areas; rented or sold them to African-American families at above-market prices; persuaded white families residing in these areas that their neighborhoods were turning into African American slums and that values would soon fall precipitously.”

Eventually the president of the California Real Estate Association showed the organization’s commitment to the tactics by setting up an office in East Palo Alto specifically for the purpose of blockbusting. Word spread among local real estate agents that minority families should only be shown homes in block-busted communities due to covenants that prevented non-white homeowners from buying elsewhere.

East Palo Alto’s Incorporation

East Palo Alto City Councilman Carlos Romero first moved to the then-segregated community as a Stanford freshman in the 1980’s and soon began working on an effort to incorporate the area. The community was cut off from the rest of the county by U.S. 101 on the west and saddled with an influx of industrial zoned activities that ringed the residential neighborhoods.

It was common for industrial uses, local dumps, wastewater treatment facilities and highway construction to be targeted for areas often adjacent to redlined and block-busted communities, according to Rothstein. As a result, without incorporation and access to city services, residents in these areas suffered the local zoning and regulatory decisions of their nearby city governments, in addition to federal and state impacts, with little to no voice in the process.

The rapid rise in rents in the 1980s was a driving issue in East Palo Alto’s incorporation. “One of the first acts after incorporation was to put in place rent control laws in the city and to prevent unjust evictions and unfair rent increases,” Romero recalled. Predatory rental tactics are another by-product of block-busted communities. Often landlords purchase properties in low-income neighborhoods, put little investment into maintaining homes, but implement market-rate rental increases working class communities struggle to keep up with.

Romero went on to found EPA Can Do, a nonprofit responsible for the construction of more than 500 housing units to date. His work on housing justice took him to communities throughout the state before he eventually returned to run for office in East Palo Alto.

“East Palo Alto remains a low-income community and some people may feel that is not a feather in one’s cap, but for me it reflects the policies that we put in place to preserve homes for low-income and working-class folks in a sea of enormous prosperity where as many other low-income communities are being pushed out to the fringes of the Bay Area,” Romero said.

Lessons for Today

Rothstein and others make the point that the negative impact on property values, business opportunities, the quality of schools, and even a resident’s physical health is long-lasting.

The communities hardest hit by today’s pandemic are largely the same ones that are home to the majority of the low-income and working-class residents in the county, not coincidentally those groups are disproportionately people of color. That disparity is a symptom of the massive wealth gap between Black and white Americans, Rothstein stated. According to a report by the Brookings Institute, on average white Americans own ten times the wealth that Black families do.

“African Americans were precluded from joining some of the nation’s largest unions in the post-World War II manufacturing boom and many of the occupations they were allowed to hold were not eligible to earn Social Security credits – which meant African American families had to spend more of their income caring for aging relatives than white families,” Rothstein added. “The consequences of that is that housing continues to be unaffordable to a large proportion of African Americans today who were excluded from the opportunity to generate that wealth.”

“Covid-19 exacerbated a problem we already knew exists,” said Marya Ouro-Gbelou, a supervisor with The Daly City Partnership Program. “We went from 100 people seeking food or rental assistance to 1,000 people with needs overnight.” DC Partners aids qualifying families and individuals in northern San Mateo County.

“We work with clients who are trapped in unhealthy rental situations and afraid to ask for safety improvements or mold abatement out of fears of eviction or deportation,” she added.

Romero thinks it’s important for everyone to learn about how housing policies have shaped communities. Of Rothstein’s book he said, “People of color have understood this for quite some time.  More important than the book is that by understanding and remembering this past, we put energy into vocal movements across this country that create a national insurgence of activism and organizing.”  

Rothstein is optimistic that the activism we saw this summer can lead to a long term solution.  “The main thing I emphasize is that without a new Civil Rights movement that will be aggressive about making it uncomfortable to maintain segregated boundaries, these issues are not going to change. I think we are having a more accurate and passionate discussion about race in this country than we ever have had in American history. So I think that provides an opportunity.”

But, he cautions, the marches alone are not a movement. He says that movement is possible, “but it hasn’t happened yet.” 

This sarticle first appeared at Climate Magazine and is republished with permission.