Session Summary: Wealth Gap and Housing Disparities

Brian Lowery: Doug, what originally made you interested in studying racial segregation?

Doug Massey: I grew up in the 1960s and watched the civil rights movement unfold. In my senior year of high school, my teacher had us read the biography of Malcom X. Where we were — Olympia, Washington — we had one Black person, who was blind and tuned all of our pianos because he had perfect pitch. I was completely segregated from race as an issue in the country, and when I read that biography, it really opened my eyes. I thought it was something that was done in the South, by ignorant people with big bellies and rabid dogs, but after reading that I realized it was a nationwide issue. The more I looked around, the more I saw it happening, even around me. I also have a background in Spanish, and when I was looking for a Ph.D. dissertation project, I noticed that Latinos were becoming a population, and nobody had done a nationwide study of Latino segregation. So for my dissertation, I did a study of Latino segregation in 50 metropolitan areas, and while I was doing that I computed segregation data for Blacks as well. What stood out at that point in time, which was the 1970s, was the much greater degree of segregation experienced by African Americans, and the degree to which it was impervious to socioeconomic influences. When I got my first job as an assistant professor in 1980, I wrote a grant proposal right away to do a study based on the 1980 census. I wanted to do a nationwide study of Black, Latino, and Asian segregation. That body of work ultimately led to my book, American Apartheid. 

Brian Lowery: That is quite a title, especially at the time that that book came out. Can you tell us a little bit about why you chose that title? Was it meant to be provocative, or did you think it was really descriptive of reality? 

Doug Massey: I meant it in both ways — it is quite descriptive, and I meant it to be quite provocative. The more I studied patterns of Black segregation, the more impressed I was with how different it was from the experiences of any other group that had entered U.S. cities in the 19th and 20th centuries. I was very alarmed by how the Black ghetto had become a structural feature of cities all over the country in the course of the 20th century. It wasn’t just individuals making decisions in open housing markets; it was institutionalized at all levels: in the real estate industry, in government policy, in private practices, and in the banking industry. The levels of segregation were the kind I thought you would get in South Africa. Later on, when the data from South Africa began to come out more freely after the end of apartheid, I did the calculations and showed that from the early 20th century up through 1970/1980, the levels of segregation in the Union of South Africa rose at the same rate as those in the United States. There was no significant difference in the degree of segregation under a de jure system of apartheid in South Africa (enforced by the law) and the de facto segregation that evolved in the United States (existing, but not mandated by law). 

Brian Lowery: You mentioned that it’s not just personal choices. I think that a lot of people think that where you live is an incredibly personal choice; it’s something they decide based on how they feel about that neighborhood, but more importantly, who they want to be their neighbors. My question to you is: What’s wrong with that view of things? 

Doug Massey: That’s fine if you’re one of the people who have the privilege to make the choice. African Americans did not have that privilege for most of the 20th century, and still today that choice is highly constrained. Most Americans don’t understand the degree to which segregation is built into the structure of American society. 

Daniel Lurie: I agree that these are not choices made with full agency and autonomy. We are living in a society and are living in a system, and a set of policy choices have built that system. It is a fiction to think that one makes the choice about where they’re going to live with autonomy, with full information, with a market that is free and fair, and without racism systems that are driving outcomes. Here in Chicago, those market systems and policy choices are fundamental. 

Brian Lowery: I grew up in Chicago, and I know that Chicago is one of the most segregated cities in the nation. A number of different people have come into office attempting to change this, but not much has been done. Can you tell us why this is so persistent in Chicago? 

Daniel Lurie: I would quibble with your premise that leaders have come in and have wanted to change it; I don’t think that’s true. I think there are many factors going on. Chicago is not going to create a bubble of race politics and race craft by itself; we exist within the American system, and therefore we are not going to be immune to the racist structures and systems that drive capital and determine who is and isn’t white. That is clearly the global force — the tax policies, housing policies, who gets subsidies and who doesn’t, who has access to capital, how wealth is built and inherited, etc. — we’re not going to solve in a unique way here. We have taken those things and, over generations, perfected and exacerbated them. We have quite literally built our environment to reinforce these rules and policy choices, and have maintained those. There’s no accident here, no natural laws at work. I will say, though, I’m not sure how fundamentally different we are. I think there used to be a notion, especially among elite liberals, that segregation was something that happened in the South. I think the reason for Chicago’s ranking is that in Chicago, our race politics is very Black and white, whereas race politics in the South is a lot more complicated and grey. I don’t have anything profound to say about what uniquely we did here, but we definitely have perfected a lot of the redlining and housing choices that have led to where we are now. We also have a unique political economy that is built on a “nonpartisan” election system that really reinforces these kinds of systems. I think it’s the marriage of our political and capital economy that has created this persistent issue. 

Brian Lowery: Doug, you’ve done a lot of study of this, and there seems to be quite a bit of variance from city to city. What do you think accounts for that? Is that variance meaningful? What is it driven by?

Doug Massey: There are a lot of different factors. Different cities grew up at different times with different spatial structures. Chicago was actually ground zero in developing a lot of the mechanisms of segregation in the early 20th century. It was the Chicago Real Estate Board that invented the restrictive covenant and used it to isolate African Americans. They also innovated deed restrictions and prevailed upon the National Association of Real Estate Boards to make it against the principle of ethics of a real estate agent to introduce unwanted population elements into a neighborhood, and everyone understood what that meant. It’s not until the 1930s, when the New Deal comes along, and the New Deal comes along, and the Federal Government starts playing a big role in the political economy of the United States, especially in housing markets with the FHA loan program. The same people who wrote the rules for the National Association of Real Estate Boards prevailed and wrote the rules for FHA, making it impossible for African Americans to get an FHA loan for the sheer reason that he or she was Black. In addition, Black neighborhoods were redlined, and it was impossible to get any kind of mortgage lending in a Black neighborhood. This was built into federal policy and enshrined in the rules of the FHA, which required restrictive covenants until they were declared to be unconstitutional and unenforceable in 1948 in the Supreme Court. The FHA wouldn’t even take it out of its manual until 1950, and that was only after a lawsuit by the NAACP. And then, even though discrimination was no longer built into federal policy, it continued, and it wasn’t even illegal in the U.S. until 1968. Discrimination against Blacks in mortgage lending wasn’t illegal until 1974, and redlining wasn’t even outlawed until 1977. Those discriminatory systems were all in full-blown operation up through the 60s until the late 1970s. They effectively excluded African Americans from participation in the housing market and really subsidized the mobility of whites out of the central city into the suburbs, where they got 30-year loans with low down payments. Therefore, the Black ghettos expanded, and once a neighborhood became Black it was cut off from capital, and there would be no loans, mortgages, or investment. If you draw a line around a neighborhood and cut it off from capital, there’s only one way that can go: downhill. That was built in to the entire system, and then the chickens came home to roost in Chicago, because the ghettos expanded so much they were encroaching on places where whites had fixed investments that they couldn’t abandon. Local civic leaders got together with the state officials, who prevailed upon the federal government to make use of urban renewal legislation and public housing projects to block the expansion of the Black ghetto. That’s what gave you — in Chicago in particular — the high-rise, high-density, high-concentrated poverty ghetto that was built between 1950 and 1970. Between 55th Street and the end of 35th Street lay blocks and blocks of high-density public housing, that not only built racial segregation permanently into the structure, but also built a new concentration of poverty. Black neighborhoods had always been poor, but they had never been 90% poor. That created a very unstable environment that made it very difficult for African Americans to get ahead. Later, they tore down those housing projects and promised to provide housing for the people who were displaced, and somehow the number of units given to the African Americans in the city was much smaller than the number that were torn down. The poor African American families were pushed out of the city of Chicago into Southwest Side communities that were already on the line and struggling, and the arrival of all these poor African American communities who had nowhere else to go really put them in a crisis. There was basically an export of poor African Americans out of the city — where they at least had access to transportation and some jobs — into poor suburbs, where the property values were not sustaining any kind of services at all. 

Brian Lowery: There was a study done by Professor Christopher Berry at the University of Chicago which suggested that between 2001 and 2015 there was approximately $2.2 billion transferred from modest homeowners to wealthier homeowners through tax assessments on property. How do you think the property tax system here contributes to racialized poverty, and what do you think can be done about that?

Daniel Lurie: Our current elected assessor has a plan to start to balance, with some racial equity approaches, the disproportionate burden that Black families pay and the disparity between residential and commercial properties. We have a property tax system that is a product of the bigger systems we have been discussing, and unfortunately we have an education system and a number of other public services that are funded in a highly segregated way that are unique to Chicago. That means that everything we’re talking about gets that much more concentrated, that much more entrenched. In addition, home values, and therefore property taxes, become whether or not you are able to have a neighborhood that gets a significant investment in public goods. Because of what we are discussing, there is a 1:1 correlation between race and level of investment. The phenomenon of property values and race is still alive and well. Despite redlining being outlawed, there are impacts on Black homeowner property values because of the way the system conducts assessments and because of public perception of race. Those homes are worth less; therefore those families are quite literally worth less, and their ability to pass on anything to their kin is effectively zero. We also have the Black/white wealth gap and the Black/white health gap, which are entrenched here in Chicago. All of these things tie together; there is nothing that is immune from the effects of structural racism. Everything around money, wealth, power, and access to those things is fundamentally connected and driven by race. Here in Chicago, we have accomplished that in a way that is pretty profound, and because of our political economy and the decentralized nature of how public goods are funded, we effectively have created little fiefdoms that allow for these things to be perpetuated. One thing that is fascinating to me is the pace of change around how these manifest in place. I’m Jewish, and North Lawndale was once the epicenter of Jewish Chicago, but it is now almost 100% Black. That change happened in about 10 years. It is scary to see it happen, because the consequences have been devastating to the Black residents that move there, but it also speaks to the fact that systems can be expedited. They can be expedited for good — to desegregate and address the repetitive nature of what needs to happen for us to get to a better place — and they can also be expedited for the worse. Chicago has changed extremely quickly — the neighborhoods, the people living there, the level of investment, and the quality of service or lack thereof can change in an instant. 

Brian Lowery: Doug, can you help us think about why it is that housing is so intertwined with economic mobility, educational opportunities, health outcomes, incarceration rates, etc.? 

Doug Massey: There are two key reasons. First, public schools are tied to where people live, and if neighborhoods are segregated, schools are segregated. The second is that segregation makes other forms of discrimination, exploitation, and exclusion easy and efficient, because if you want to disinvest in people, you simply disinvest in a place. This grew worse during the housing boom of the late 90s, because the advent of a new technology — mortgage-backed securities — meant that the few Blacks who became homeowners in cities like Chicago or Philadelphia or New York became tempting targets for predatory lending, because they had some equity in the houses. Mortgage brokers targeted Black neighborhoods for subprime lending, and they systematically went through Black neighborhoods and got lists of Black customers from stores, worked through Black churches, and marketed loan products through “wealth-building seminars” (which were in fact targeting homeowners in Black neighborhoods for home equity loans in order to pull out money right there and get several thousand dollars out of their house). Any wealth few members of Black community had been able to accumulate over the course of many decades of fighting racism systems got hammered during the mortgage meltdown. The level of Black/white segregation in a metropolitan area is the strongest single predictor of the rate of foreclosure in a metropolitan area. Blacks were systematically targeted, and they were convicted of that in federal court. Wells Fargo was one of the leaders in doing this, and it didn’t make much news until they discovered they were doing that to white people as well, but it had been going on for African Americans for most of the mortgage boom.  As a result, their wealth was wiped out, compared to what happened with every other racial group. 

Brian Lowery: Often when there’s a crisis, the people who have the least amount of power and the least amount of resources to withstand the crisis are the ones most battered by it. How do you manage that when it comes to COVID? We already see huge disparities in rates of infection and disparities in rates of death along racial lines, and that has to have a huge effect in Chicago. How are you all thinking about that? 

Daniel Lurie: First and foremost, COVID has been racialized no more than the U.S. was already racialized, so things that were in place pre-COVID are still in place now. All of the morbidity that you’ve seen news around has been very true in Chicago. The mayor is deeply focused on racialized poverty in Chicago, which is a code for morbidity here. The long-term game plan she has to address the safety net, tax policy, wealth creation, and segregation is going to be a piece of our response. We are also doing triage around the immediate public health concerns and the shocking number of deaths, despite the rate of infection actually being on par with that of whites and Latinos. A lot of that is outreach, legitimacy, and provision of public health and mental health services. However, we know that the real solution here lies at the national government level, in both vaccines and stimulus and the ability to provide cash to residents who are Black and poor. This mayor is deeply focused on getting people money, some way somehow. We have done what we can with our modest budget, which is now crushed because of the gutting of revenue from the lack of commercial activity, but we are focused on expanding our cash transfer system so that we can provide cash to people who need it. Universal programs are the goal, but that can’t be done at the municipal level, so we are trying to build our own little system that is a facsimile of that. 

Brian Lowery: Doug, if you had to predict, what is the consequence of COVID? What do you foresee the effect to be on the structure of housing, segregation, and the other things we have been talking about? 

Doug Massey: It’s going to cause a major economic depression, worse than the Great Recession, because of the sheer drop in consumer spending, the loss of jobs, the loss of income, and the mishandling of this whole epidemic at the federal level. African Americans are particularly vulnerable, because they live in food deserts, have diabetes and weight problems, and are poorly served by hospitals and clinics. They also work in service sectors where they come into contact with people, and the lower end of medical services in particular. COVID has been attacking people in a really racially and class-specific way. Segregation is the glue that holds the whole system of racial stratification together in the United States; it’s what some people call the “linchpin” of racial victimization in this country because it holds all these other systems together to bear down upon African Americans and undermine their status and welfare in American society. There have been improvements — back in 1970, there were 40 hypersegregated metropolitan areas in the country, and now there are 21. But those 21 metropolitan areas include all the major Black communities you can think of in the Northeast, West, and South. One-third of all urban African Americans live under conditions of hypersegregation in the United States, and half live under conditions of high segregation. Only a little under half live in conditions of moderate segregation. The places that have integrated substantially are places with small Black populations that are relatively well educated. White attitudes towards race did change, though: If you look at polls from the early 1960s, the majority of whites across the country believed in segregation as a principle. In the course of the civil rights era, that became unsustainable. Many people changed their minds, and some people just stopped talking openly about it. In polls, the number of people supporting segregation in principle dropped down to single digits, but those same polls still showed that while white Americans had come to believe that desegregation was right in principle, they were still uncomfortable around very many Black people, and they still harbored a lot of anti-Black stereotypes. The net result is that places with small Black populations have been able to integrate quite rapidly over the past five decades, and African Americans in those places are no longer segregated. You can’t desegregate places like Chicago and not live near Black people, and that is not only built into the social and economic structures but also into people’s cognitive structures. 

Daniel Lurie: Chicago has lost about 200,000 Black people in the last 20 years, so Chicago’s identity as a Black city is at risk, with profound political, economic, and social ramifications. What I think the professor is talking about here is housing segregation, but capital segregation is certainly still alive and well in the cities with smaller Black populations that were mentioned. To me, this speaks to the challenge we talked about at the beginning of individual choices not being relevant until we address and fix the policy systems architecture. School busing is one example of this: It was working before the political fallout made it toxic enough for white leaders to abandon the project. The lesson there is that it’s a combination of systemwide change and political will. I think it’s interesting how often the conversation gets reduced down to individual choices when in many ways, that’s secondary to the forces of change that need to be mobilized. 

Brian Lowery: How do we think about the effect of racial segregation on politics? 

Doug Massey: Segregation made it easy to create Black districts and select Black representatives, but it isolated them from the rest of the polity. Segregation makes disempowerment, disinvestment, and exploitation easy and efficient because all the people you want to exploit are in one place, and if you want to isolate people politically you put them in one place. It’s not a mystery why the Union of South Africa created group areas in 1948 and moved people out of places that were integrated before to put them in areas where they could suitably exploit them and exclude them from the rest of society. Segregation makes it harder to build cross-racial coalitions and cross-group interests. But I think attitudes have changed. There’s a lot of work going on now that shows that Democrats have become more anti-racist instead of tolerant and are moving in a different direction. If you look at the trends by political persuasion, Democrats have become a lot more anti-racist in the last 20 years, and Republicans have stayed back where they were in the 1950s. 

Daniel Lurie: I don’t separate politics and racism. To me, everything we’ve talked about is fundamentally about politics; any different Chicago or United States that we want to imagine will require a political project. I think we need to think about multiracial coalition building and focusing on the kind of outcomes we want to see and what it’s going to take to build that. Fundamentally, that’s going to require white people to give up power. Identifying that power, speaking to how it’s metastasized, and figuring out what it will take for white people to give up some of that power in order to share and redistribute it is essential. There’s signs of hope and there’s signs of despair, but the reason I like working in government is because this is the platform and scale to effectuate change, and we are all political actors. The sooner we realize that, the easier this all becomes. 

Brian Lowery: When you talk about giving up “power,” that’s pretty abstract. Can you talk about what that would tangibly look like? 

Daniel Lurie: That would mean a reparative agenda; the federal government needs to directly invest in Black families in a universal way, and tax dollars are going to be spent to intentionally benefit one population over another. That’s what we could do to try to lessen and mitigate the harm. But to get to a place closer to equality, that’s going to require a radical overhaul of the tax system, subsidies, the way the federal government collects and spends its dollars, and who does that. To me, it’s not an abstract concept; it’s quite literally investing in Black families and Black individuals that will acknowledge the harm done — and the fact that the system that has done that harm is alive and well and needs to be repaired. Another dimension of power is the sense of agency, and one of the things that gives me hope is that if we move beyond the “hero” nature of politics these days, communities are electing people who bring the approach I’m describing. To me, that’s quite hopeful. What’s depressing is the idea that we can find a hero to save us, and everything will get better without us having to do any work. But right now, I think there’s a groundswell of recognition that systems are in play and systems need to be the target. I am also hopeful that this country can change itself radically. It’s done it in the past, and in many ways I would say it’s uniquely situated to do it. That’s the kind of American exceptionalism that I believe in, that we have the capacity — if not quite the practice — of doing this. And we don’t need everyone on board, we just need to find that political coalition to make it so. That has been the practice of radical change makers in the past — not to persuade, but to organize. 

Doug Massey: If you look at the demographic composition of this country, it’s 18% Latino, 13% Black, and 5% Asian. The multiracial population of this country is growing very rapidly. And if you put all those groups together with the white people that support anti-racism and have been awakened by all the videos of Black murders by police, you’ve got a winning coalition. Obama put it together twice, but Hillary couldn’t quite mobilize it. What happened in 2016 was that Donald Trump mobilized the white racist vote fully, and Hillary failed to mobilize the Obama coalition. The big threat is that we have a constitution written by slaveholders, and that constitution gives white minorities tremendous powers to block and roll back. The political transition isn’t going to occur without mobilization and without a fight. The Republicans are attempting to repress the vote and deny the legitimacy of people’s votes because the demography is completely against them. The older white population is literally a dying demographic, and it’s going to be harder and harder to block as time goes on, and there will be a transition at some point. The question is: How much harm can be done between now and then? 

Daniel Lurie: To me, demography isn’t destiny. I think that, fortunately, what constitutes “whiteness” is a flexible term, and therefore what constitutes “Blackness” is also a flexible term. One hundred years ago, there was a notion that anyone from Eastern Europe was not white; the Jews were not white. But the system absorbed us, so I don’t think that that’s not an inevitable trajectory. 

Doug Massey: Demography gives you a base to work on, but it requires mobilization. It’s very clear to me, as a sociologist, that 20 years from now the categories we use to describe who we are are going to be very different. We’re moving towards a world where there’s a big jumble and mixture of people. It’s most evident in the rate of intermarriage between Latinos and non-Hispanic whites, but Black/white levels of intermarriage are rising rapidly by historical levels as well. The color line, which was hard and fast in the 20th century and characterized Chicago for many years, is becoming fuzzier and hazier. I think we are going to be moving into a different kind of era, where we classify ourselves in different ways. But the political process will require mobilization; you can’t just expect demography to do it all by itself. 

Brian Lowery: In the States, we’ve seen this story before. There was the emancipation, and the attempt at Reconstruction which was short-lived. There was the civil rights movement, and the almost immediate pushback and backlash. It seems like, historically, power has rarely conceded without demands, and I wonder if we can expect more this time. 

Doug Massey: I think something is different now, in that a big chunk of whites joined the Black Lives Matter movement. I think that what really made the difference was technology. Everyone has a good-quality movie camera in their pocket, and you can video these terrible things that are happening and make them apparent. Segregation hid that; police would go in and act brutal in segregated Black neighborhoods and whites could ignore it and pretend it didn’t exist. But when it’s filmed and put on the internet, it becomes hard to ignore. I think that’s opened up a lot of white America’s eyes to the fact that these systems of racial oppression are very much alive and well, and that lesson has been driven home by the white nationalism the Trump administration openly embraces. Trump deliberately stirs up animosity and hatred for purposes of personal aggrandizement. He’s stirring red meat to an older, white demographic. But if you look at the younger generations, things have changed a lot; racial lines are much more fluid, opinions are a lot more open and accepting. The Second Reconstruction came to an end in the late 1970s, and there’s been a counterreaction that has built up to this climax, which is Trump. The dog whistle is thrown out the window, and people are not just openly racist. I think that’s setting the stage for another realignment, and I’m hopeful that the Third Reconstruction will go further than the first two. 

Brian Lowery: I think that right now, this feels like a tipping point, and I worry sometimes that Americans are too optimistic in the assumption that things will always get better and better; that is not reflected in the history of this country. I think that optimism leads people to not engage in the most effective ways because there is an assumption that we will be better off in the future than we have been in the past. 

Doug Massey: I agree with that. The future doesn’t just happen — it’s made, and it’s made by people struggling for power, and people using power to equalize society. It’s always been that way; people with power don’t give it up recently. You need to demand it and find new ways to cultivate it through coalitions. 

Brian Lowery: There are a lot of young business leaders evolving into more powerful people that will see this. What would you suggest for someone who is in a position of power to do if they want to respond to this current moment? 

Doug Massey: The top priority has to be to dismantle the whole prison industrial system, which has prayed upon the Black community like nothing else. The second thing is to finally enforce anti-discrimination laws, particularly in the area of housing. I think there’s a possibility of moving towards a more desegregated society now that wasn’t there before, with the shift in attitudes and changing demographic composition. I’d like to think that this is the dying gasp of old white supremacy, and we’re moving into something new that will be defined by the younger generations. Ultimately, though, I think that we need to mobilize to vote, and fight the attempts to suppress votes that have been coming our way. We have to overcome the barriers that are going to be thrown up in our way to vote, because the only way to get power in this country is by voting the other people out. It’s a heavy lift, but it’s doable, and we’ll see what happens.