DOCUMENT RESUME

ED 095 235 UD 014 503

TITLE Equal Opportunity in Suburbia: A Report of the UnitedStates Commission on Civil Rights:

INSTITUTION Commission on Civil Rights, Washington, D.C.PUB DATE Jul 74NOTE 78p.

EDRS PRICE MF-$0.75 HC-$4.20 PLUS POSTAGEDESCRIPTORS Business Responsibility; City Problems; *Civil

Rights; Employment Opportunities; Federal Laws;Government Role; *Housing Discrimination; HousingOpportunities; Law Enforcement; *Metropolitan Areas;Racial Attitudes; *Racial Discrimination; RealEstate; *Residential Patterns; Suburbs

ABSTRACTThis report is the result of an investigation

initiated by the Commission to study metropolitan area developmentand its social and economic impact on urban minorities. In publichearings in St. Louis, Baltimore, and Washington, D.C., betweenJanuary 1970 and June 1971, the Commission documented the problemwith the testimony of more than 150 witnesses. Further testimony wasgathered by the Commission's State Advisory Committees in thesecities and in Boston, Milwaukee, and Phoenix. The report concludesthat despite a plethora of far-reaching remedial legislation, a dualhousing market continues today in most metropolitan areas across theUnited States. Inadequate enforcement by Federal agencies andcircumvention or, at best, lip-service adherence by localauthorities, builders, real estate agents, and others involved in thedevelopment of suburban communities have helped to perpetuate thesystematic exclusion of minorities and low-income families. Theresult has been the growth of overwhelmingly white, largely affluentsuburbs, and the concurrent deterioration of central cities,overburdened by inordinately large and constantly increasingpercentages of poor and minority residents. Two of the sectorshardest hit by extensive residential segregation have been educationand employment. (Author/JM)

EQUAL OPPORTUNITY IN SUBURBIAA Report of The United States Commission on Civil Rights July 1974

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U.S. COMMISSION ON CIVIL RIGHTS

The United States Commission on Civil Rights is a temporary, independent, bipartisan agency establishedby the Congress in 1957 to:

Investigate complaints alleging denial of the right to vote by reason of race, color, religion, sex,or national origin, or by reason of fraudulent practices;Study and collect information concerning legal developments constituting a denial of equal pro-tection of the laws under the Constitution because of race, color, religion, sex, or national origin,or in the administration of justice;Appraise Federal laws and policies with respect to the denial of equal protection of the laws be-cause of race, color, religion, sex, or national origin, or in the administration of justice;Serve as a national clearinghouse for information concerning denials of equal protection of thelaws because of race, color, religion, sex, or national origin; andSubmit reports, findings, and recommeLdations to the President and the Congress.

MEMBERS OF THE COMMISSIONArthur S. Flemming,* ChairmanStephen Horn, Vice ChairmanFrankie M. FreemanMaurice B. Mitchell"Robert S. RankinManuel Ruiz, Jr.

John A. Buggs, Staff Director

Not a member of the Commission during preparation of this report.** Resigned from the Commission as of March 21, 1974.

ii

LETTER OF TRANSMITTAL

THE PRESIDENTTHE PRESIDENT OF THE SENATETHE SPEAKER OF THE HOUSE OF REPRESENTATIVES

SIRS:

The U.S. Commission on Civil Rights presents this report to you pursuant to Public Law 85-315 asamended.

This report is the product of an extensive study of racial isolation in this Nation's metropolitanareasa study of why this pattern of isolation has occurred, how it is crippling the growth and prosper.ity of our cities, and how it can be arrested and reversed. Information was gathered through Commis-sion hearings in St. Louis, Baltimore, and Washington, D.C., and factfinding meetings of State AdvisoryCommittees in those cities and in Boston, Phoenix, and Milwaukee.

With prompt and effective action by both the legislative and executive branches of Government,the problems identified by the study can be solved to the advantage of city and suburb alike. We there-fore urge your consideration both of the facts presented and the Commission's recommendations forcorrective action.

Respectfully,Arthur S. Flemming,* ChairmanStephen Horn, Vicc ChairmanFrankie M. FreemanMaurice B. Mitchell*Robert S. RankinManuel Ruiz, Jr.

John A. Buggs, Staff Director

* Not a member of the Commission during preparation of this report.** Resigned from the Commission as of March 21,1974.

iii

ACKNOWLEDGMENTSThe Commission is indebted to the following staff members and former staff members who participatedin conducting this project and in the preparation of this report:

Paul Alexander, Ann E. Allen, George C. Bradley, Stephen C. Brown,Sophie C. Eilperin, Charles A. Ericksen, Lawrence B. Glick, HowardA. Glickstein, Martha B. Grey. Peter W. Gross, Hedy A. Harris, DavidH. Hunter, Lorraine W. Jackson, Othello T. Jones, Karen J. Krueger,Michele A. Macon, Carol J. McCabe, Leona Marx, Philip Montez,John H. Powell, Jr.. C. Anita Prout, Everett J. Santos, Jacob Schlitt,Martin E. Sloane. Conrad P. Smith. John C. Ulfelder. Brenda A. Watts,Carole A. Williams, Jacques E. Wilmore

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Preface

ContentsPage

1

1. Racial and Economic Polarization Today 2An Individual Perspective 2The National Perspective 4

2. The Consequences of Racial Polarization 9The Downward Spiral of the Central City ............... 9Employment Opportunities 11Housing Opportunities 13Racial Attitudes 14

3. The Causes of Racial Polarization: The Private Sector 16Real Estate Agents 16

Steering 18Control of Listings 19Pattern of Market Control

Financial Institutions 22Builders and the Construction Industry 23...............Major Employers 24

4. The Causes of Racial Polarization: State and Local Government 29Control over Community Development 29

Displacement of Minority Residents 30Exclusion of Minorities 31

Failure to Provide Low-Income Housing 33Failure to Enact or Enforce Effective Fair Housing Laws 35

5. The Causes of Racial Polarization: The Federal Government 36Federal Housing Programs 36Remedying Housing Discrimination: HUD and the Department of Justice 40Remedying Housing Discrimination: Financial Regulatory Agencies 42Federal Assistance: In General 43Federal Assistance: The Impact of Federal Highway Grants 44Federal Contractors and Housing Availability 46The Federal Government as Employer 47

6. Remedies for Racial Polarization 51Elimination of Discrimination in Housing 51Increasing the Housing Supply 52

Federal Subsidy Programs 52New York State Urban Development Corporation 53Legislative Reform of Zoning 53Litigation with Respect to Land Use Controls 55

New Communities 5.6Metropolitan Area Acceptance of Low-Income Housing 57

The Principle of the Planned Fair Share 5.7The Federal Role in Metropolitan Development 59

Summary 62Conclusion 64Findings 67Recommendations 69Additional Statement by Vice Chairman Stephen Horn 71

PrefaceMore than a decade ago, this Commission noted the

development of a "white noose" of new suburbanhousing on the peripheries of decaying cities with an"ever-increasing concentration of non-whites in racialghettoes?' Today that pattern is even more pro-nounced. The exodus of affluent whites from the citieshas continued unabated, along with the large-scalemovement of jobs and wealth. The new suburbs haveenjoyed an era of unparalleled prosperity, while thecentral cities have strained to answer growing de-mands for services for the urban poor and, ironically,suburban commuters.

In 1969, the Commission decided to conduct a studyof metropolitan area development and its social andeconomic impact on urban minorities. In public hear-ings in St. Louis, Baltimore, and Washington, D.C.,between January 1970 and June 1971, the Commissiondocumented the problem with the testimony of morethan 150 witnesses--from welfare mothers to Cabinetsecretaries, from public housing tenants to corporationpresidents. Further testimony was gathered by theCommission's State Advisory Committees in those ci-

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ties and in Boston, Milwaukee, and Phoenix.This report is the result of that investigation. It

includes both findings of fact and recommendationsfor action. Its purpose is not to single out for criticismany particular individuals, organizations, agencies, orcommunities, but to analyze this metropolitan patternof racial polarization from its causes to its conse-quences.

By the time of publication, some of the facts con-tained in the report will undoubtedly need updating.Court cases challenging both government and privateactions in a number of directly related or peripheralmatters are currently pending in several jurisdictions;and the Federal Government's own housing programsare at best in a state of flux.

Nevertheless, the problems documented herein arelong-lived, profound, and complex. Their solution willnot be simple. But without an immediate recognitionof their impact, it is doubtful that any solution will beforthcoming.

U.S. Commission on Civil Rights, 1961 Report: Housing 1 (1961).

1

Racial and Economic Polarization Today

An Individual Perspective

To many, the problems of the inner city are knownonly as images flashing through the window of amoving car. To Larman Williams, his wife and chil-dren, they were a way of life:

I Guess mainly, where we were, we were dissatisfiedwith the facilities, we were dissatisfied with theclientele in and around the block. There was highcrime in the area, in the neighborhood and on theblock, there were attacks on neighbors. One ladyacross the street wag hit on the head with a hatchet,robbed, murdered. Down the street from me on theleft a lady was raped and was found the nextmorning in the nude. And people were prostitutingall around and under us and in the apartment. thatkind of stuff.

My child was chased from school through an alleyby someone, some man who was trying to seduceher. And for all of those reasons I just was afraidto come home to find my family maybe dead or mychild raped, or just afraid.1

Williams, a high school assistant principal, testified atthe January 1970 hearing of the United States Com-mission on Civil Rights in St. Louis, Missouri. Wil-liams was not alone in his feelings. Inner-city resi-dents at a series of Commission hearings testifiedabout the crime, decayed housing, inferior schools,inadequate municipal services, and lack of jobsabout the dark streets lined with rotted houses inwhich they had to make their homes and raise theirchildren.

In another sense, however, Larman Williams wasfortunate in that his job and economic position ena-bled him to consider moving away from the conditions

1 Hearing Before the U.S. Commission on Civil Rights, St. Louis,Missouri, 301 (1970) (hereafter referred to as St. Louis Hearing).

2

that so troubled him. It took a year of looking to findthe right house, in suburban Ferguson, Missouri. Butit was not enough that Williams was an able andwilling buyer. Williams is block and Ferguson wasvirtually all white.

Only when his white pastor intervened was Wil-liams even able to see the interior of the house.

[We] took the name off of the sign and called thereal estate people and of course they didn't call usback at that time. So (my pastor] asked me if Iwould mind if he would look into it and get theprice of the house and all of (the] details that wewould want to know, and I told him I wouldn't, andhe got this information. And I said, "Well, thatsounds good; I think we can handle that price andthat kind of a thing."

Williams' pastor went to the owner of the home andtold him he knew of a person who wanted to buy thehouse:

... And the owner said that he didn't mind but hisneighbors were not in the mood for selling to blackpeople....My pastor went and knocked on their doors and hegot them together and they had a caucus and aprayer meeting and decided that it was only theright thing to do, to sell to a black person.

And then the person, the owner, called the realestate people and they came and got in contact withme and we made the transaction from there.'

It would not be difficult for Larman Williams tounderstand why the black population of St. LouisCounty in 1970 was only 4.1 percent and why theblack population of St. Louis City was 43.7.3

a Id. at 302.Id. at 460.

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Thousands today are not as fortunate as the Wil-liams family. They remain in the ghettos of St. Louis,Baltimore, and Washington, D.C., in the "barrio" ofPhoenix, and in the centers of dozens of other Ameri-can cities. Many do not freely choose to live in theseconditions. But that' are trapped. They are poor. Theyare members of a minority group. Too often, they arepoor because they are members of a minority group.

The National PerspectiveThe decade of the sixties was one of increasing

suburbanization of whites in metropolitan areas andof increasing concentration of blacks within centralcitiesin short, of increasing racial separation. Be-

` if tween 1960 and 1970 the white central city populationin metropolitan areas having a population of 500,000or more declined by 1.9 million people, while thecomparable black population increased by 2.8 million.The suburban rings of these same metropolitan areashad a white population increase of 12.5 million and ablack population increase of only 0.8 million.' Interms of percentage changes, the increase in the blackshare of the central city population was 21/4 times asgreat as the increase in the black share of total metro-politan population in these areas .6 Moreover, in 10 ofthe 34 metropolitan areas having a population of onemillion or more, the percentage of black suburbanresidents stayed the same or declined between 1960and 1970.6

We cannot expect these patterns to reverse them-selves on their own. If metropolitan population isprojected to the year 2000, the percentage of whitesliving in central cities drops from about 40 percent in1970 to approximately 25 percent in 2000; the changefor blacks is from 79 percent in 1970 to between 70.1and 74.8 percent?

As testimony before the Commission showed, thispicture of racial separation in metropolitan residentialpatterns persists for two main reasons: past and pres-ent discrimination in the sale and rental of housingand because of the lower income of blacks and other

Statement of Dr. George H. Brown, Director, Bureau of theCensus, U.S. Dep't of Commerce, Hearing Before the U.S. Commis-sion on Civil Rights. Washington. b.C.. table 1.5 at 531 (1971) (here-after referred to as Washington Hearing).

Based on table 5. id. at :539.Table 8, id. at 542-550.

7 Bureau of the Census, U.S. Dep't of Commerce, Population Insideand Outside Central Cities by Rare: 2000, in Washington Hearing at1087. These figures are not predictions, but projections of presenttrends based on various characteristics of the population and on alter.native demographic assumptions.

4

minority group members.hile housing discrimination is not practiced as

frequently or as openly as it was before such discrimi-nation was outlawed, it is still accurate to describemost metropolitan areas as having two housing mar-ketsone for whites and one for blacks. Even ifdiscriminatory pract .es were ended, special effortwould be needed to overcome residential patterns es-tablished by decades of discrimination.

Lower income also puts racial and ethnic minoritiesat a competitive disadvantage in the housing market.In 1969, according to Census Bureau statistics, nearlyone-third of the Nation's blacks had incomes belowthe poverty level,8 compared with one-tenth of thecountry's whites, The median family income for allblack families in 1969 was $5,999, nearly 40 percentless than the median white family income of $9,794.9

The dual causes of residential segregationdiscrim-ination and low incomemust be looked at together,since they reinforce each other. For blacks to haveincomes equal to whites would not in and of itselfsolve the problem. This would only lower the percent-age of black metropolitan residents who live in centralcities fin areas of one million or more population)from 81.1 to 78.4.10

At every income level whites are more likely thanblacks to live in suburbia. In 1970, 85.5 percent ofblack metropolitan fkmilies earning less than $4,000lived in the central city. as compared with 46.4 per-cent of white families in the same income range. Inthe $4,000 to $10,000 income range, 82.5 percent ofthe black families and 41.6 percent of the white fami-lies lived in central city. For families with an annualincome of $10,000 or more, the central city figures are76.8 percent black and 30.9 percent white?'

But income is not irrelevant. Many white subu "ban-ites bought their houses at a time when prices weresignificantly lower. Today the supply of inexpensivesuburban housing is insufficient for even those black

"U.S. Dep't of Labor, Black Americans 14 (1971)."Id."Statement of Dr. George H. Brown, Director, Bureau of the

Census. U.S. Dep't of Commerce, Washington Hearing at 52&.The National Commission on Urban Problems wrote in its reportBuilding the American City (1968) (hereafter referred to as DouglasCommission Report) at 52:

The suburban ring has a majority of the residents of the metro-politan area. It also has less than its proportionate share of thepoor, and only 5 percent of American nonwhites.. . . The suburbs,however, contain nearly half the white metropolitan poora figurewhich suggests that the suburbs discriminate more on the basis ofrace than on the basis of economic status." Washington Hearing at 527-528. These figures are for metropolitan

areas having a population of one million or more.

Changes in racial concentration ofcentral cities between 1960 and 1970

Increase in suburban population accordingto race from 1960 to 1970

Source: Statement of Dr. G. H. Brown, Director, Bureau of the Census, U.S. Dep't of Commerce, Hearing Before the U.S. Commission onCivil Rights, Washington, D.C., table 1.5 at 531 (1971).

Percentage of population below poverty level The median family income for Americanincome according to race for 1969

Source: U.S. Dept of Labor, Black Americans 14 (1971).

families according to race for 1969

Family income per annum$10,000

9,000

8,000

7,000

6,000

5,000

4,000

3,000

2,000

1,000

0WHITES BLACKS

Source: U.S. Dep't of Labor, Black Americans 14 (1971).

White and black families within given income brackets living in central city, 1970

Percent

100

90

80

70

60

50

40

30

20

10

01

Families earningless than $4,000

Families earning34,000 to $10,000

Families earning$10,000 or more

Source: Statement of Dr. G. H. Brown, Director, Bureau of the Census, U.S. Dept of Commerce, Hearing Before the U.S. Commission onCivil Rights. Washington. D.C.. 527-528 (1971).

purchasers or renters whose income is comparable tothat of whites.

To a great extent, the income disparity is also theresult of discrimination. Inferior education has beenoffered to minority group members, with access tohigher education often blocked. Even when a compa-rable education has been achieved, discrimination inemployment prevents minority group members fromconverting their education to income as successfully asdo whites.

The lack of inexpensive housing in suburbia is notonly the result of market forces but also of localpractices which limit low-cost dwellings or excludethem altogether. The motivation behind these restric-tions is complex, with racial and economic motivationsintertwined. The exclusion of low- and moderate-in-come housing not only assures open space, uncrowdedschools and streets, and more favorable tax revenues;it also excludes low-income families. And this exclu-sion is disproportionately severe for blacks and other"undesirable" minorities because of their higher inci-dence of poverty. A witness at an open meeting con-ducted by the Commission's District of Columbia Ad-visory Committee in May 1970 described the all toocommon situation in Montgomery County, Maryland.

Housing in Montgomery County is almost non-existent for the black people who work for theFederal Government because, by and large, thosepeople who work for the Federal Government arethe lower paid employees. The [median] housingin Montgomery County last year, the new construc-tion, sold for [about] $40,000, and anyone thatearns 515.000 or less cannot afford to buy a housetoday in Montgomery County. And I know very.very few black people who earn $15,000 a year.'2

This economic-racial exclusion may well be calledthe racism of the seventies. Coupled with vestiges of

t2 Testimony of Charles Mahone, Transcript of Open Meeting Beforethe District of Columbia Advisory Committee to the U.S. Commissionon Civil Rights 15 (May Lt. 1970) thereafter referred to as D.(:. SACTranscript).

the more open racism of the past, it furnishes anexplanation for the picture portrayed by the censusfigures, an image of a suburban "white noose" encir-cling a black inner city. As George Laurent, a witnessat the Commission's Baltimore hearing, stated:

[T]here are three reasons that blacks do not livein suburbia or in predominantly white sections ofthe cities: one, they don't want to live there; two,they can't afford it; and three, discrimination. Byfar the last is the most important."

As already noted, reasons two and three are oftenclosely related.

For a country as large and varied as the UnitedStates, it is hard to make generalizations which will bevalid throughout. Thus this report is more relevant toolder, generally northeastern or midwestern metropoli-tan area with a substantial minority population thanit is to others. The study of St. Louis and Baltimoreleads to many conclusions that one can reasonablybelieve will apply to Detroit or Pittsburgh but notwithout modification to some newer metropolitan areasin the Vest and South.14

Generalizations about "the central city" or "thesuburbs" also hide great deal of diversity. Residentsof the many p .).icrous neighborhoods which con-tinue to exir .ventral cities can legitimately disclaimany asserti...., that their neighborhoods suffer fromdeteriorating housing or are losing jobs. Suburbs, too,come in all kindsolder, working-class suburbs, ma-jority black suburbs, small towns until recently be-yond the influence of the metropolitan area."

Nevertheless, when all the exceptions and the diver-sity are taken into account, a clear pattern of differ-ences between central cities and suburbs, between mi-nority group neighborhoods and white neighborhoodsremains.

° Hearing Belore the U.S. Commission on Civil Rights, Baltimore,Maryland, 108 (1970) (hereafter referred to as Baltimore Hearing).

"W. B. Neenan, Political Economy n/ Urban Areas 16 (1972).'5 See R. Farley, The Changing Distribution of Negroes within

Metropolitan Areas: The Emergence o/ Black Suburbs, 75 Am. I.512 (1970); Suburbia: The New American Plurality, Time Magazine,Mar. 15, i971, at 14.

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The Consequences of Racial Polarization

You see, I don't think that it's bad to have suburbs.I don't think that we should lament the existenceof the suburbs. I also don't think that it's unnaturalthat a certain amount of retail and other sorts ofactivities would follow those settlement patterns.

But I do think that it is criminal and I do thinkthat it is racist and I do think that it is stupid tothink that a central city must go down the drainbecause there has been a rearrangement of settle-ment patterns to accommodate growth."

The Downward Spiral of the Central CityThe economic and racial separation of American

cities and suburbs is widely recognized. Yet, there islittle .understanding of either the causes of this polari-zation or its devastating effect on our cities, theirresidents, and all who use city facilities or services.

The growth of the suburbs is a phenomenon thathas drained the city of its resources and precipitatedpresent conditions. As suburban development acceler-ated in the 1940's and 1950's, middle-class whitesmoved out of the city in large numbers and settled inthese outlying communities." The neighborhoodswhich they left behind were then inhabited by thosewho could not afford to move out of the city, oftenminority group members, and by blacks unable tomove to the suburbs because of racially exclusionarypractices.

Once this pattern was started, the process of urban/suburban stratification accelerated as people's fears,

" James Gibson, president, Washington Planning and Housing As-sociation, Inc.. Washington Hearing at 57.

" See Report of the National Advisory Committee on Civil Dis-orders (Kerner Commission Report), ch. 6 (Mar. 1968) for a briefbut welldocumented description of the development of metropolitanracial polarization. See also, U.S. Commission on Civil Rights; 1961Report: Housing.

prejudices, and economic and social aspirations fedupon each other. White residents, seeing their neigh-borhoods becoming racially mixed, "fled" to the whitesuburbs. Their exodus created more vacancies whichwere filled by nonwhites in need of housing. This inturn convinced the whites who were still in the citythat fears of racial inundation were justified, andthey, too, left. Neighborhoods often were integratedonly during a transitional stage from all white to allblack. In the end, the white "suburban collar" sur-rounding a black central city emerged.

On the average, those remaining in the city have alower income than suburbanites." Tax burdens, how-ever, have not declined. In fact, the fiscal needs of thecity have increased along with the growing demandfor more in municipal services, such as welfare, educa-tion, sanitation, and health facilities. The often declin-ing quality of these services under the added financialstrains have provided further motivation for movingaway from the city to those who are able to do so.

Business and industry have also joined in the exo-dus to the suburbs. The Nation's largest employer, theFederal Government, has relocated many of its facili-ties outside the central city. Testifying at an openmeeting of the Commission's District of Columbia Ad-visory Committee in May 1970, former D.C. CityCouncil Chairman John Hechinger described the im-pact on the city of the exodus of Federal agencies tothe suburbs. Although the specifics with which he isdealing are unique to the District of Columbia, Mr.

"Median income for families in central cities in 1969 was $9,507;for those in suburban rings, it was $11,586. 1970 Census of Popula-tion: General Social and Economic Characteristics, table 116 at 422For black families, tLe difference between city and suburb was smaller:$6,790 in central cities, $7,542 in suburbs. Id., table 128 at 444.

9

Hechinger's analysis is applicable, insofar as the

movement of private employers is concerned, to manylarge American cities:

It causes the departure of middle-class technical andprofessional families, mostly white but black aswell, who follow their jobs. The District is thenleft more and more to the poor, who are pre-dominantly black.

This causes the departure of the private industriesand businesses that service the Federal agencies andtheir suburban employees.. . .

This causes the process of flight to the suburbs tofeed upon itself, and accelerate like an avalanche.Individuals who don't need to move do so to escapeblacks, or rising taxes, or declining schools, ordeteriorating neighborhoods.

. those to whom the city is left . . . demand morein serviceseducation, welfare, training, healthfacilities, and so forthand are less able to affordthem than those who leave."

The process which Mr. Hechinger describes is onethat lessens the city's viability. Cities increasingly findthemselves without the resources to meet their ownneeds. They continue to carry most of the burden ofproviding welfare, health services, and housing for theurban area poor.

This problem is nowhere more starkly apparentthan in the field of public education. Within a metro-politan area, it is the central city school system whichmust bear the burden of educating large numbers ofdisadvantaged children, while suburban school sys-tems serve wealthier white families.

Although there are many reasons for the inade-quacy of central city schools, one of the most funda-mental is the lack of funds for quality educationalprograms. Yet it is in the inner-city schools, theschools which often have the least adequate funding,that the need for such educational programs is mostpressing. Compensatory programs, tutoring, and lowstudent-teacher ratios are sacrificed because of eco-nomic considerations, and the present system of fi-nancing public schools becomes, for millions of Ameri-cans, a major barrier to a quality education and thelife style which a quality education can produce."

"D.C. SAC 7 ranscript at 31-32.2" School systems are financed by local property taxes, supplemented

by contributions from State and Federal funds. A community's abilityto provide quality schooling, therefore, is closely related to its tax

10

Proportion of local government revenuespent on education in central cities

compared to suburbs

Source: J. Berke and J. Callahan, Inequities in School Finance, inSenate Select Comm. on Equal Educational Opportunity, Issues inSchool Finance, 92d Cong. 2d Sess. 141-143 (1972).

At the same time that financial resources for centralcity education become scarcer, integration in the pub-lic schools becomes harder to achieve. By 1965, 7 ofthe Nation's 15 largest cities had a majority nonwhitepublic school enrollment; in two other cities enroll-ment was 40 and 50 percent nonwhite 21 In thesedistricts the elimination of predominantly blackschools can be achieved only on a metropolitan basis.

Although the problems of financing quality educa-tion are greatest in the central city, the city govern-ment is forced to spend a smaller share of its revenueon education than the suburbs. In the central cities of37 metropolitan areas in 1970, 36 percent of totallocal government expenditures went to education; in

base, and hence to the wealth of its residents, its tax rate, and theproportion of its local revenue which can be used for schools, as opposed to other municipal services. The Supreme Court considered theinherent inequities of such a >ystein in San Antonio Independent SchoolDistrict v. Rodriguez, 41 4407 (U.S., Mar. 21, 1973), butfound no constitutional violations because it saw the relationship be.tween school district wealth and the income of residents of a schooldistrict as uncertain; the Court also preferred a political solution tothe problem of financing public services. See J. Berke and J. Callahan,Inequities in School Finance: Implications of the School Finance Casesand Proposed Federal Revenue Sharing Programs, in Senate SelectComm. on Equal Educational Opportunity, Issues in School Finance,92d Cong. 2d Sess. 129 (1972) (hereafter referred to as Berke andCallahan); Note, A Statistical Analysis of the School Finance De-cisions: On Winning Battles and Losing Wars, 81 Yale L.!. 1303(1972); D.S. Commission on Civil Rights, inequality in School Financing: The Role of Law (1972).

21 Berke and Callahan, supra at 139.

the suburbs the percentage was 56.22 The central citymust spend proportionately more than the suburbs onwelfare, police protection, and traffic control.

Aid from the Federal and State governments doesnot make up for the higher cost of central city publicservices or the lower income of central city residents.Central city residents pay a higher proportion of theirincome in local taxes than do suburbanites. In 33 of37 metropolitan areas in 1970, central city residentshad a greater tax burden. In eight of the centralcities, the percentage of income taken by taxes wasgreater than in any of the suburban rings.23 Much ofwhat the central city resident pays in taxes, moreover,is for the cost of providing public services to a largelow-income population.24

Baltimore City Council fiscal advisor Janet Hoff-man believes a most serious problem is the parasiticfinancial relationship which exists between the cityand the suburbs. Testifying at an August 1970 Com-mission hearing in Baltimore, Ms. Hoffman describedthe drain which commuters cause on city resources.Baltimore is not able to tax suburbanites who work inthe city, yet it supports many services used by subur-ban dwellers. Ms. Hoffman cited the hospitals, stad-ium, zoo, art museums, and many tax-exempt organi-zationshealth, cultural, charitable, and religiousasexamples of activities which the city alone subsidizes,but which people from the regional area use exten-sively." There is no parallel benefit from the suburbsto the urban dweller.

Thus, the downward spiraling of the city has com-plemented the flourishing of the suburbs, and contin-ues to do so. The burden of the deterioration fallsmost heavily upon the Nation's black and Spanish-speaking populations, more than half of which live inthe central cities.

Employment OpportunitiesIn city after city, the Commission has found that

businesses and industries are leaving the inner cityand relocating in the suburbs. In greater Baltimore,for example, between 1955 and 1965, 82 industriesrelocated from the city to the surrounding suburbs,

22 Id. at 142-143.Id. at 145.

"Nerman concludes, in a systematic study of cross - subsidization inthe Detroit metropolitan area, that Detroit provides greater benefitsto its suburbs than vice versa. W. B, Neenan, Political Economy ofUrban Areas (1972). See especially chit. 1-5 for his analysis.

25 Baltimore Hearing at 20-21.

most of them in Baltimore County.26 Taking into ac-count movement to and from other regions and birthsand deaths of firms, the city suffered a net loss of 338manufacturing firms in that period.27 In St. Louis,Boston, Phoenix, Washington, D.C., and New Yorkthe pattern is the same: jobs have been accompanyingthe movement of middle-class housing to the suburbs.Ironically, the jobs that are relocating in suburbancommunities are largely blue collar, for which manyminority group persons are qualified. The job shift inthe St. Louis area over the period 1951-1967 is illus-trative of the national trend:

St. Louis County gained over 75,000 jobs in manu-facturing and 47,000 jobs in wholesale and retailtrade. At the same time the city lost 50,000 manu-facturing jobs and 35,000 jobs in wholesale andretail trade. These industries are the biggest em-ployers of blue-collar workers. The areas in whichthe city has increased in employmentprincipallyfinance, real estate and insurance, and servicesarewhite-collar. This shift in the structure of jobsaffects black persons more adversely than whitesbecause black persons are concentrated in blue-collar jobs, but live in the central city, physicallyseparated from jobs which they could fill.28

The Commission was also told that between 1968 and1970:

Seventy-seven firms have left the City of Boston.... This represents a loss of more than 10,000 jobs.These move-outs were especially high in the threehigh-growth industries, chemicals, electrical ma-chinery, and rubber-plastics."

The suburban relocation of employment opportuni-ties would not have the strong adverse effect on mi-nority group persons that it does if there were eitheravailable housing near job sites or adequate transpor-tation from the city to the suburbs. However, residen-tial patterns preclude low-income minority group per-sons from living near available work, and

" Baltimore Hearing at 503.21 Id. at 504.

28 Staff of U.S. Commission on Civil Rights, Demographic, Economicand Social Chararterstirs of City of St. Louis and St. Louis County.in St. Louis Hearing at 458, 471-472.

25 J. Kinney O'Rourke, executive director, Boston Economic Develop-ment and Industrial Commission, Transcript of Open Meeting Beforethe Massachusetts State Advisory Committee to the U.S. Commissionon Civil Rights held in conjunction with the Massachusetts Commis.sion Against Discrimination, Boston, Massachusetts, vol, I at 207-208(June 1-4, 1970) (hereafter referred to as Mass. SAC-MCAD BostonTranscript).

11

metropolitan public transportation systems are de-signed to service suburban commuters going into thecity in the morning and out to the suburbs at night.Often an unemployed city dweller simply cannot get toan available job in the suburbs.

In Phoenix, the head of the local chapter of theNational Welfare Rights Organization, Ida Nobel, tes-tified that jobs go begging because of the isolation ofghetto residents:

. . . 1 have sometimes four or five young mencome through my office a day. They get a job butit's way out and they don't have transportationto get to the job. so they ask us to try to providetransportation for them. So this is, as I say, amajor problem for the poor peoples here. You can'tget no transportation."

The jobs, Mrs. Nobel testified, are "way out; they'reway out somewhere like out in Scottsdale, Glendale,around out on Camelback, they're so far out." Askedif there was housing in those communities for theworkers, she replied, "Not as I know of. If it is, I'mnot aware of it."31

In Baltimore, a study conducted by a businessgroup in the summer of 1968 found that in one areaof the city about one-fourth of the work force wasunemployed or underemployed, while at the same timemany jobs were available along the beltway. As onewitness observed:

The simplistic answer is why don't the people inthe inner city go to those jobs? You might as wellsay Timbuktu. There is no transportation.

Three transfers, poor transportation, antiquatedtransportation system; it's expensive, unreliable.'

In Washington, D. C., the handicap which publictransportation creates for city dwellers trying to reachsuburban jobs was described by a number of Federalemployees who worked for agencies which had moved,or planned to move, their facilities to the suburbs.Employees at GS-2 and GS-3--low salarylevels"told the Commission's D.C. State Advisory Committee

nr Transcript of Open Meeting Before the Arizona State AdvisoryCommittee to the U.S. Commission on Civil Rights, vol. 2 at 24-25(May 14-15, 1971).

" Id. at 25.32 Mr. William Boucher III, executive director, Greater Baltimore

G.mmittt.,. Baltimore Bearine. at 377.11 As of January 1973, the GS-2 salary level began at $5,432 per year.

The GS-3 level began at $6,128.

12

that they would have to resign if their jobs left theDistrict because they could not afford the increasedbusfare, or the additional babysitter costs which along trip to and from work would require." One blackHEW employee calculated that the additional busfareshe would have to pay when her agency moved to aMaryland suburb would be almost $350 a year andthat her commuting time would double in length to 5or 6 hours round trip.35 The agency move, she pre-dicted, would be especially hard on black employees:

We see our men there, and most of our men we seeare either in the mail rooms, they are messengers,or they are working machines. This makes us knowthat they are in grades 1 through 5. Then they'retelling us about how our families are breaking up.I'm real concerned.

And then, on top of this, some of them are workingtwo jobs. If they move to Parklawn they will notget into the District early enough to be able tomoonlight and work on this second job. So howdo you expect these men to support a family?"

In St. Louis, there is very little public transporta-tion between the inner city and job opportunities inSt. Louis County, where several large employers, in-cluding the McDonnell Douglas Corporation and aChrysler plant, are located. Most of these companies'black employees live in the city of St. Louis and arehandicapped by the lack of transportation. As witnessMango Ali explained to the Commission:

. . . It is a very important problem. Most of theblack employees out there, they have to ride towork with someone else. They have to depend uponsomeone with an automobile to get them to workand because of this many times they miss quite afew days because of the person who they are ridingwith. They miss 12 days in a year and they aresubject to a reprimand and if they get too manyreprimands, maybe two or three, then they aresubject to being fired. And the sole reason is notnecessarily the person doesn't want to come towork, it might not be economical for him to ownan automobile so that he can get there and havehis own reliable transportation himself.

There are buses that go out to McDonnell but Ithink it takes approximately about 2 hours through

D.C. SAC Transcript at 81-83."Id. at 121.38 Id. at 122-123.

the public system to go there."'

In St. Louis, an experimental bus program, subsi-dized by the Federal Government, provided transpor-tation from a black area of the city to a number ofindustrial complexes. The bus ride was only 1 hour,but the program was not successful. A similar pro-gram in the greater Boston area also failed, and thechairwoman of Job Opportunities in Needham ex-plained why:

Some factors that we feel contributed to the fewer-than-expected number of riders were the length oftime for some residents who live far away fromDudley Station to reach this area by public trans-portation; the scheduling of a 6:00 o'clock-in-the-morning bus, which was too early to attract resi-dents who would have to arise at approximately4:30 a.m. to get to their jobs, and maybe earlier,if they lived a mile or two from Dudley Station;the fact that the jobs available for the 6:00 a.m.bus were for female assemblers,. whose wages wouldvary between $1.94 and $2.20 an hour, not enoughwage or job compensation for arising so early andtraveling so far; the fact that the EmploymentExpress was not adequately advertised; the factthat not as many people were hired as had beenexpected.'a

Thus, the movement of jobs to suburbs with exclu-sionary housing practices takes its daily toll on unem-ployed and underemployed city residents, and on thecity itself, which must pay for their support despitedecreasing tax bases. Transportationa method whichrequires a great deal of time spent commuting to anarea where minorities feel unwelcomeis only a par-tial solution to the problem. Unless adequate suburbanhousing is provided for minority and low-incomeworkers, the city and its residents will continue to payfor the suburbs' practices.

Housing OpportunitiesRacial discrimination in housing compels blacks

and other minority group members to live in themetropolitan area's least desirable housing. Theirhousing tends to be older, in worse condition, and inless desirable neighborhoods.

Central city housing in which blacks are likely to

e St. Louis Hearing at 112.

'Mrs. Carol S. Knapton, chairwoman, Job Opportunities in Need.ham, Miss. .SAC -MCAD Boston Transcript, vul. 11 at 13.

reside is more likely to be dilapidated and substand-ard than housing in the suburbs. A special census ofhousing made for the Douglas Commission found that33.3 percent of central city units were in povertyareas. as contrasted with 10.2 percent in the suburbs.These urban poverty areas contained:

Four out of five of all housing units occupied bynonwhites in these central cities;

Three out of four of the substandard units in thesecentral cities;

Nine out of 10 of the substandard units occupiedby nonwhites in these central cities;

Over half of the overcrowded units in these centralcities;

Five out of six of the overcrowded units occupiedby nonwhites in these central cities;

Four out of 10 of all housing structures built before1910 were in these central cities, or those whichwere almost a third of a century old or older; and

Five out of six of all the structures built before1910 which were lived in by nonwhites in thesecentral cities. . . .39

The Douglas Commission concluded that:

These facts are clear evidence of the inadequacy ofthe figures which show that only 10 or 11 percentof the urban areas, cities, and suburbs of theSMSA's [Standard Metropolitan Statistical Areas]have substandard or overcrowded housing. Thesefacts show how concentrated the problems reallyarea'"

Robert Embry, commissioner of the Baltimore CityDepartment of Housing and Community Development,described the problems of finding adequate housingfor that city's poor. Of the 300,000 city dwelling unitsin 1970, roughly 11,000 were public housing. Almost40,000 persons, 90 percent of whom were black, livedin public housing, and there was a waiting list ofmore than 3,000, which represented only a small por-tion of those with inadequate housing. Mr. Embrytestified:

{W} e find that as we build new public housing, asthe new projects are seen, the waiting list increases.

Douglas Commission Report at 77-78."Id. at 78.

13

So 1 don't know that the 3,000 applicants anywherenear expresses the total demand for such housing."

In contrast, there was no public housing in the sur-rounding suburbs. Mr. Embry testified that because ofthis a significant number of low-income suburban resi-dents were moving into public housing in the city."

Racial AttitudesThe racial isolation in which most Americans live

has a psychological effect on individuals of all races.It creates suspicion and fear about persons of differ-ent races, which in turn create or heighten feelingsof racism."

The Commission was told that in various suburbancommunities whites harbor stereotypes which causeconsiderable fear of and animosity toward blacks,Mexican Americans, and Puerto Ricans, particularlythose perceived as being of a lower class. ThomasDawes, a member and former chairman of the Balti-more County Human Relations Commission, described,for example, the attitude of county residents towardblacks:

Generally. I would say that the attitude of people isnegative. A great many people are without personalknowledge of black people. They respond to stereo-typed ideas that we have all been brought up toinherit in a segregated society. We have a greatmany residents in the county who have had experi-ences in neighborhoods in the city where the realestate industry has abandoned areas once changehas begun. and they feel that they have been hurt,and to them racial change means great difficulty,it means dissolution of neighborhoods, and theydon't recognize the great harm and the great hurtthat is done to black people who are caught up inthis process as well."

Whites who profess to have liberal views towardsresidential integration are often unwilling to speak outagainst the neighborhood norm if it is one of racialexclusion. In Baltimore County, a fair housing group

"Baltimore Hearing at 73."Id. at 73-74."For a general summary see Pettigrew, Altitudes on Race and

Musing: A Sacial.Psvehological View, in Segregation in ResidentialAreas: Papers an Racial and Sorioeconomie Farrar, in Choice ofHousing. 21 -81 (A. H. Hawley & V. Rock eds. 1973) (hereafter citedas Pettigrew). See also Foley, Institutional and Contextual Factors Al-fectinA the Housing Choices of Minority Residents, id. at 85-87 (here-after cited as Foley).

a Baltimore Hearing at 267.

14

had difficulty getting volunteers to work for it in theirown neighborhoods. Its director explained:

[My] great experience . . . in talking with peopleand talking with our fair housing council peopleis that there is still a tremendous amount of resist-ance. . . . We broached to our fair housing councilthe concept, let's have neighbor-to-neighbor dis-cussions. And we got a fairly reluctant group ofpeople to agree to start this. I remember one com-munity, we went through a training program, wehad 12 families agree to talk to their neighbors andat the last moment nine chickened out. And wehave come to the realization that even among thepeople who say they ale devoted to fair housingand the liberals and so forth, they are scared todeath to talk to their neighbor because of fear ofintense hostility. This gives me an idea of just howdeep this thing is in the community.45

Generally, however, white acceptance of interracialliving has been growing, although this acceptance ofsharing neighborhoods with blacks does not extend tosituations in which whites would be in a minority."Two factors primarily account for this and shouldlead to even greater acceptance in the future. First,experience in stable interracial living situations leadsto greater racial acceptance and the reduction of prej-udice. Thus, the more housing is integrated today, themore it is likely to be in the future. Secondly, theexistence of law changes how people believe theyshould act and changes their expectations of howothers will act. Therefore, a strong national policy infavor of open housing and strong enforcement of fairhousing laws will lead people to expect integratedneighborhoods as the norm.

Blacks, like whites, choose their housing primarilyfor convenience to work, appropriate size and specialfeatures, and manageable cost.47 They are generallywilling to live in interracial areas if necessary to finddesirable housing but are reluctant to live in areasthat are practically all white. Black reluctance to leaveblack neighborhoods is in large part caused by arealistic appraisal of the barrier of housing discrimi-nation and of the treatment they and their familiesmight receive in white areas.

Black witnesses who had moved from the city to thesuburbs, or considered doing so, tended to bear out

a George Laurent, Baltimore Hearing at 109-110.a See Pettigrew, supra note 43."Pettigrew, supra note 43.

this conclusion. Black people who have moved to for-merly all-white suburbs have done so for the qualityof housing, schooling, and services available there.But they also have found racism expressed in manyways. After describing instances of neighbors movingaway, hostility of other neighbors, and discriminationagainst his children in school, Adel Allen, a blacksuburban resident in St. Louis County, concluded thatliving in the suburbs was worth the difficulties itentailed, although he described St. Louis County as "alittle hit south of Mississippi."18

Many blacks told the Commission that the suburbsare an alien, unfriendly land which they preferred notto confront.49 One such witness was Donald Whit-worth of St. Louis. A worker at the suburban Chrys-ler plant, Mr. Whitworth chose to commute ratherthan look for a house in the suburbs. His explanationshows the fear of racial hostility and confrontationwhich many blacks share:

I personally feel that if I did move into a com-munity such as Fenton or the surrounding areas ofValley Park, or Union, Missouri, or JeffersonCounty, Washington County, that my daughter . .

being 6 years old and in the first grade, wouldprobably be subjected to a racial harassment byher white counterparts; and [I would worry about]my wife's social atmosphere while I was at work,because surely, if I moved in that neighboringarea, she probably would have to give up her jobin the city.

Mr. Glickstein [then Commission Staff Director].Well, it would be much more convenient. Wouldn'tyou be prepared to attempt to be a pioneer, to moveout there andMr. Whitworth. As an individual, being a pioneer

" St. Louis Hearing at 308."Mass. SAC-MCeiD Boston Transcript at 342; St. Louis Transcript

at 34-35.

doesn't frighten me at all. In fact, it encourages me.But let me say this: In that respectand I'm think-ing in the respect of fear, happiness for my family,and what have youin that respect I would beselfish, I feel, if I was to take on the venture. Iwould be showing everybody, look how big DonWhitworth is; he's going out there and showingthem that he doesn't care. He's glad to be there.And he's going to really strive to show that wecan overcome.

But what's happening to my wife and daughter inthe meantime? This is my prime concern. And Ido believe that in some form they would be in anenvironmental, mental and social jeopardy whenmy presence was not merited.5°

A resident of Montgomery County, Maryland, DorisStanley, also had mixed feelings about the benefits ofliving in the suburbs when she testified before theDistrict of Columbia Advisory Committee to the Com-mission. To Mrs. Stanley, her environment was noth-ing but hostility. "Living in the suburbs," she said,"is nice if you're white." 51 She continued that sheliked "getting the services of the whites that theyperform for their own" but was reluctant to recom-mend that other black persons follow her to the sub-urbs.

I would recommend that they be told ahead of time,don't fool yourself, it is hostile. But I feel that,you know, this whole country is hostile whereveryou are . . So I would recommend that they wouldcome out but they would need an awful lot of help.The suburbs are not open to them and are notwelcoming them in, it is a fight."

5° St. Louis Hearing at 34-35.5' D.C. SAC Transcript at 50.62 lti. at 51.

15

The Causes of Racial Polarization:The Private Sector

Segregated housing patterns cannot be explainedaway by the attitudes and decisions of individualfamiliesof white families who are "prejudiced" orwho want a more pleasant suburban environment, orof black families v lio prefer to live in homogeneousareas or who are unwilling to confront the obstaclesthat prevent them from having a free choice of hous-ing. There have been and there still are powerfulinstitutional forces involved. This chapter will look atthe private economy to see how it determines wherecertain people will live and what form metropolitangrowth will take. The next two chapters will considerthe governmental forces involved in this process."

Real Estate Agents

Over the past few decades the real estate industryhas played a leading role in creating and maintainingsegregated neighborhoods. The marketing practices ofreal estate brokers are an important factor in deter-mining the availability of housing in the suburbanmarket to minority buyers. Both sellers and bv. fersdepend extensively on a broker's advice and salesmethods. As a broker who testified in Baltimore ex-plained:

I think that you have to recognize that the bulk ofthe properties that go for sale on the market arelisted with brokers. The brokers have the authority,or they have the influence, at least, to direct thebuyer to a specific property or to direct him awayfrom the property."

Malcolm Sherman, a broker from Maryland, held

'° See generally Foley, supra note 43. at 85. 95-107."Testimony of Arthur Sparrow, Baltimore Hearing at 138.

16

the view that real estate brokers actually encouragewhite desire for exclusivity.

. . . it is really not the homeowner who is makingthat decision to keep that neighborhood all-whitefor his friends and neighbors, so much [as] thereal estate broker who is in business and who stillconsiders it economic suicide to make a sale toblacks in that all-white neighborhood.°'

Of course, brokers are also influenced by any discrim-inatory desires of homeowners or developers whomthey represent as agents.66

The importance of the broker's practices is thatthey affect home buyers on a much larger scale thanindividual discriminatory practices ever can achieve.One of the firms represented at the Commission'sBaltimore hearing reportedly sold 350 homes eachmonth." A St. Louis firm represented at the Commis-sion's hearing sold 850 homes in 1969 and had a salesvolume of $18 million."

The average person often tends to think of housingdiscrimination in terms of a minority family's inabil-ity to buy a particular house in a particular neighbor-hood. However, the testimony heard by the Commis-sion alleges more than individual instances of housingdiscrimination; it indicates the existence of a dualhousing marketone for whites, one for blacks andother minoritiesthat determines racial residentialpatterns for entire metropolitan populations as effec-

Id. at 115. For example, Walter Faerber, president of John Arm-bruster Real Estate Co. in St. Louis, testified concerning the strongfeeling of white owners in Overland, a St. Louis suburb, against sell-ing to black buyers. St. Louis Hearing at 253.

55 See, e.g., testimony of 11. Jackson Pontius, executive vice presi-dent, National Association of Real Estate Boards, Washington Hear-ing at 125.

" Baltimore Hearing at 140."St. Louis Hearing at 229.

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Lively as ordinances which would designate certainareas as black and others as white e9

The existence of real estate practices which createthis duality is commonly recognized. Secretary ofHousing and Urban Development George Romney putit in no uncertain terms at the Commission's Washing-ton hearing:

As a matter of fact, you don't have to prove throughme that we've got a dual housing situation in thecountry. We've got a dual housing situation. We'vegot dual housing markets in practically every metro-politan area in the country . . .60

The practices, however, are difficult to detect, espe-cially by the individual homeseeker.

Steering

Since housing discrimination is illegal under theFair Housing Act of 1968, it would be naive to expectto discover such practices by simply canvassing bro-kers. Few people will willingly admit that they wouldviolate Federal laws or generally accepted moral prin-ciples. An effective way to inveotigate real estate prac-tices is "testing," or comparing the responses of bro-kers to potential black and white customers who arequite similar in all respects except race. This relativelycommon technique usually shows different treatmentof each race.

At the Commission's St. Louis hearing, witnesseswho had conducted a testing survey in 1969 for theGreater St. Louis Committee for Freedom of Resi-dence described a discriminatory real estate practicecalled "steering"showing white persons houses forsale only in white neighborhoods and showing blackpersons houses listed for sale only in predominantlyblack or changing neighborhoods. Lorraine Parks, ablack schoolteacher, testified that she visited about 12real estate offices in St. Louis to find out where theywould offer her housing. In almost every one, she wasreferred to a black or changing neighborhood. Usu-ally she was told about University City, a St. Louissuburb with an increasing black and decreasing whitepopulation.

"The Commission found dual markets in the four citiesSt. Louis,Denver, Baltimore, and Philadelphiastudied in its 1971 report, HomeOwnership for Lower Income Families 89 (hereafter referred to asHome Ownership).

60 Washington Hearing at 244.

18

They would immediately begin to talk about orshow me propertyshow me pictures, or refer tolistings in University City . . In some instances Iwould state that I wasn't interested in UniversityCity; I wasn't particular about living there. And inmost instances it was University City or nothing elseavailable."'

In a few instances Mrs. Parks was referred toanother area, Northwoods, which is also experiencingracial change. She was never offered properties withinthe price range she indicated (up to $30,000) in anyother areas in suburban St. Louis.62

Heddy Epstein, a white woman, also visited 12 realestate companies in St. Louis. She indicated that shewanted a location that would include University City:

And then when I would say: "Well, how about alittle bit further east?" I was [in] each instancetold: "Well, University City is all colored; youdon't want to go there." "3

Two of the real estate agents visited by Mrs. Parksand Mrs. Epstein testified at the hearing. Walter F.Faerber, of the Armbruster Company, was asked whyso many black people have moved to University City.

He replied that it was because of economics. Commis-sion counsel questioned this explanation.

Mr. Glick. Well, isn't there housing for sale in theOverland-St. Johns area for $15,000 and $18,000,

"below $20,000, let's say?

Mr. Faerber. Yes, there is.

Mr. Glick. But there has not been the large migra-tion of black people into Overland-St. John areaas there has been to University City?

Mr. Faerber. No."

Further testimony showed that turnover rates, aswell as prices, were comparable between the twoareas.65

Control of Listings

Real estate agents further control the availability ofhousing to black purchasers by preventing black bro-

61 St. Louis Hearing at 25." Id. at 205-208.63 Id. at 208."Id. at 232.63 Id. at 240. On Mar. 10, 1970, the Department of Justice charged

John H. Armbruster and Co., Jerome L. Howe, Inc., and two otherSt. Louis real estate firms with violating the 1968 fair housing lawby steering black persons to changing neighborhoods and white persons

kers, whose clientele is primarily black, from gettingaccess to listings of houses for sale in white areas.This technique of segregation is invisible to the indi-vidual home buyer, but widely recognized by blackbrokers. Black brokers alleged at the Commission'sBaltimore hearing that this was a common practice inthat area. A black broker, Ralph Johnson, explainedthe importance of access to listings:

In Baltimore County. I think the real estate businessis controlled primarily by the white real estatebrokers. They control the business and they controlthe listings. And by controlling the listings, theycontrol the business. Because the listings are the keyto the real estate business.66

Not all listings are exclusive: it is common practicein the real estate field to allow another broker to showa company's listings and to split the resulting commis-sion. Another black broker, Arthur Sparrow, allegedthat white brokers refuse to share listings with blackcolleagues:

Well, I think the most obvious and [yet] the mostcommonly used technique is, for example, if I, ablack broker, were to call a white broker requestingto show one of his listings or property that is listedwith his firm . . . the common practice is that theywould tell me that the property is under contract ifthey didn't want me to show it. . . .

I think another practiceI would say secondly interm [s] of its rankis the fact that white brokerswill frequently tell you that they can't reach thesellers.... The third technique, which I have found,especially in certain areas, is that when you insist,they give you the appointment, but then nobodyshows up to meet you."

Pattern of Market Control

The brokers who testified at the Baltimore hearingstated clearly that discrimination went beyond individ-ual instances. "You see, in Baltimore," testified ablack broker, "we have a black market and we have awhite market." 68

away from integrating communities. The suit was settled by consentdecree on Dec. 15, 1971. It was concluded by the adoption of a Codeof Fair Housing Practices by the Real Estate Board of MetropolitanSt. Louis. applicable to 509 member firms, including the defendants.The code outlaws the discriminatory practices alleged in the suit. Theboard agreed to establish a fivemember equal rights committee. Thedefendants agreed not to continue defense of the suit and promisedto take steps to remedy the effects of past discriminatory practices,including the posting of fair housing notices and the giving of a fairpractices course to their employees.

91 Baltimore Hearing at 130." Id. at 133-134.a Testimony of Ralph Johnson, id. at 134.

This fact is best illustrated by the existence ofseparate black and white organizations of real estatebrokers on local and national levels. The Real EstateBoard of Greater Baltimore had no black membersuntil 1960 and as of 1970 had 15 black brokers out of650.'' Being a member of clie board is particularlyimportant because only members have access to itsmultiple listing service. The St. Louis MetropolitanReal Estate Board has about a dozen black brokermembers out of a total membership of 4,400 (whichincludes brokers and their associates)." The firstblack broker was admitted in 1963.11

On the national level, the black National Associa-tion of Real Estate Brokers was founded about aquarter of a century ago because black brokers couldnot belong to the white realtor association, the Na-tional Association of Real Estate Boards (NAREB).Today, the two organizations are still operated onracially separate lines."

At the Baltimore hearing, Commission counselasked whether the fair housing law had any effect inbreaking down the dual housing market. The blackwitnesses believed that it had had a very limited effect.As one broker put it:

[A]s long as you have the white brokers controllingthe real estate business here in Baltimore, you willhave this dual market. Because in order to controlthe real estate business, the black brokers wouldhave to control the listings and in order for them tocontrol the listings, they would have to be able tohave the availability of going' out into the countyand getting the listings and this is just not possible,because of the racial characteristic of the countyand other things. . . .7"

White brokers who testified at the Baltimore hear-ing denied that they refused to share any listings withblack brokers." But they did not deny the fact thatthe black and white markets are self-perpetuating.William L. Antrim, vice president and sales managerfor the firm of Russell T. Baker & Co., justified theabsence of black agents in his firm by stating that itwould be almost impossihe for a black agent to makea living in the county at that time.

"Id. at 257, 162."St. Lou;.s !bluing at 2.15.T1 Id. at 246.72 Washington Hearing at 121. Section 806 of the Civil Rights Act

of 1968, 42 U.S.C. §3606 (1970), prohibits racial discrimination inthe membership of real estate brokers' organizations.

" Baltimore Hearing at 135,14 Id. at 156.

19

If you are. selling paint, you have paint to sell. butyou don't have any product in the real estate busi-ness until you get a listing. Now, if you don't get alisting. you are not going to get any telephone calls.because when you get a listing. calls come theoffice arid we refer that person to the listing agent:so that, as you can see. if a person is unable to listproperty. and usually we start out on the basis ofthem doing it in the neighborhood in which theylive, their friends, their associates...."

Malcolm Sherman, a white Maryland real estatebroker, agreed that black salesmen operated at ahandicap in a white market, but he described how hiscompany attempted to overcome it in the mid-1960'sby an affirmative program for training black person-nel.

We found that the only way we could hire blacksalesmen was to practice discrimination in reverse. . . and decide that we would put them on a 6months program of $100 a week, this would beabout 26 weeks. and we might blow 52,600. but . . .

we had to do this to put them through an educationaltraining session where they could at least make somemoney while they were learning, if we wanted toattract black salesmen in the business."'

He believes that similar efforts are needed now toproduce a unitary housing market:

And it's incumbent upon the real estate professionto do this and to hire black salespeople because theycan develop into good salespeople and one of theways to do black business is to have black sales-people."

The more general view, however, is that maintain-ing the dual housing market is more profitable thancreating an integrated one. Economic motivations playa large part in determining racial practices in the realestate business. One of the St. Louis real estate agentsvisited by Heddy Epstein, who is coordinator for theGreater St. Louis Committee for the Freedom of Resi-dence, explained to her, in defense of discriminatorypractices he had described: "Selling to blacks is badbusiness for us, we have to consider our reputation.""

Substantial pressure not to "rock the boat" comesfrom within the industry. Real estate brokers some-times perpetuate a dual housing market by punishingthose white brokers who are willing to sell to blacks in

"Id. at 154."Id. at 101." Id. at 101-102."St. Louis Hearing at 209.

20

white areas, thus keeping them in line.Kenneth Mumbower, a St. Louis real estate broker,

testified about the treatment he received after one ofhis salesmen showed a house in a white area to ablack customer. The branch manager of another bro-ker's office phoned Mr. Mutnbower and threatenedhim economically."

Broker Malcolm Sherman testified that his residen-tial sales business was all but ruined by industrypressure after announcing in 1963 that it was com-pany policy to sell property regardless of race.

Our business was affected in one way that we neverexpected it to be. It was not affected by the ownerswho had listings with us. They did not question ourpolicy and it was not affected by prospects that wewere working with, but it was affected by our com-petition. At that time. we were selling more propertythan 18 brokers in our neighborhood, who were ourcompetition put together. Their campaign againstusand we gave them every opportunity to knockus downresulted within 6 months [in] our beingdown to no more than 25 or 30 listings a monthand that many sales a month. Our business had gonedown by some 65 to 70 percent."

Other elements contribute to the profitability of resi-dential segregation. Kay Drey, who works for a Uni-versity City open housing group, compared sales ofhousing in the integrated area of University City withsales in Clayton, a neighboring, all-white suburb, andconcluded that brokers can make a premium by sellingproperty that satisfies white people's desire for exclu-sivity.81

By guiding black and white buyers to differentmarkets, the broker can increase profits in both mar-kets. Mr. Sherman gave an example in the Baltimorearea.

. . . the practice still goes something like this, thatcertain pocket areas and sections of the LibertyRoad area northwest are open occupancy and thatthere are blacks living with whites in some blockspractically all-black . . . if he has a black buyer[a broker] will move that black buyer into one ofthose listings . . . instead of viewing the marklt-place.. . . That way, he does not disrupt the businessthat he is doing in an all-white neighborhood but

" Id. at 200.8° Baltimore Hearing at 95.la St. Louis Hearing at 333.

adds black to where blacks already bought, let'ssay out in the Liberty Road area."2

In the black housing market, a policy of housingsegregation may also mean a profitable operation.Black brokers are generally free of competition fromwhites and have a captive market of black homeseek-ers._

The actions of real estate brokers in maintainingsegregated housing patterns also may be related toprofessional standards concerning racial homogeneitys,hich were 1.ilg considered to be part of the profes-sion's ethics.83 White real estate brokers usually be-long to real estate boards which are members of theNational Assoc:ation of Real Estate Boards.

At its Washington hearing, the Commission askedrepresentatives of NAREB what affirmative effortsthey had undertaken to change broker practices theyformerly had advocated and thereby promote fairhousing practices within the profession. Jackson Pon-tius, executive vice president of NAREB, replied:

[Al good many of our member 'th:e,rds throughoutthe Nation are even going so far as to conduct whatthey call equal rights committees. . . . We haveencouraged the local boards to set up equal rightscommittees."

However, when questioned about specific efforts toovercome past discrimination, Mr. Pontius was nega-tive. He said that HUD's requirement of an equalopportunity "logo" in housing ads went "too far."85

I think in view of the 1968 Civil Rights Act wehave to assume that everybody has to live with thatact. I don't think it's necessary to spend the moneyto say that we support the act."

The effect of discriminatory practices by real estatebrokers is not only to deprive individuals of theirchoices but to impose rigid segregation on whole

"Baltimore Hearing at 115.sa Washington Hearing at 122. NAREB's 1928 Code of Etl.lcs con-

taioed the folbwin6 provision (Article 34):A Realtor should never be instrumental in introducing into a neigh.borhood, by character of property or occupancy, members of anyrace or nationality, or any individuals whose presence will clearlybe detrimental to property values in that neighborhood.

The current NAREB Code provides (Article 5):The Realtor should not be instrumental in introducing into a neigh-borhood a character of property or use which will clearly be detri-mental to property values in that neighborhood." Washington Hearing at 123-124.'6 Id. at 126. NAREB had in fact opposed the fair housing act before

it was passed. Washington Hearing at 123.8° Id. at 126.

neighborhoods. A. J. Wilson, director of UniversityCity's Human Relations Commission, stated that Uni-versity City, which had indicated its openness to blackresidents by means of fair employment ordinances andother civil rights measures, quickly became the targetof discriminatory real estate practices:

Finally, I think when the movement [of black resi-dents] began and when there was somewhat acceptance of this we found blockbusting . . . which wasalso of course something that encouraged movementartificially. We were forced to pass ordinances, localordinances, outlawing block busting and ultimatelywere forced to pass an ordinance which restrictedall real estate solicitation in our city to eliminatethe practice of real estate companies coming in,purchasing property. We had speculators come intothe community in the same way.87

University City established City Residential Ser-vice to help families bypass real estate dealers whomight steer them in discriminatory patterns. This ser-vice placed more than 500 white families in UniversityCity, trying to retain an integrated community, andattempted to give black homeseekers a wide range ofchoices within their price limits in a number of kibur-ban communities.88 But as Mr. Wilson indicated, Uni-versity City cannot by its own efforts determine itsracial patterns:

I think ... that you are going to have a black ghettoin the northwest St. Louis County unless there's anaggressive policy of opening up houses in all areasof St. Louis County.89

If only one or two neighborhoods in a suburbanarea are "open" to blacks, then the systematic discrim-ination discussed abovesteering, pressure on bro-kers from within the profession, control of listingsmay well turn these sections into all-black enclaves.Only the implementation of fair housing practicesthroughout a metropolitan area will result in stablyintegrated neighborhoods rather than "changing"neighborhoods which ultimately become segregated.

The discriminatory policies of real estate brokersalong with other institutional supports of racial segre-gationlead many whites to fear that property valuesin their neighborhood will decline if the area is al-

" St. Louis Hearing at 316.""Id. at 321."Id. at 322.

21

lowed to become integrated. Often these fears arestimulated by real estate brokers after the initial entryof a black family into the neighborhood. If manywhite owners decide to sell in panic, the law of supplyand demand dictates the inevitable result: prices fallas the fear acts as a self-fulfilling prophecy. Ironically,however, the initial drop in price does not necessarilylead to bargains for minority purchasers. The differ-ence can be absorbed by speculators who buy fromwhites at reduced prices and sell to blackswhosehousing opportunities are limitedat inflated prices.9°

Contrary to popular notions regarding race andpro erty values, however, prices may subsequently sta-bilize at a higher level when the neighborhood be-comes racially stable, either as an integrated or an all-minority neighborhood, as pointed out in a study asfar back as 1961.91

In 1972, the Social Science Panel of the NationalAcademy of Sciences' Advisory Committee to HUDfound that "the weight of the evidence is that, incomparison with all-white neighborhoods of otherwisesimilar character (age, location, housing quality,etc.), property values in neighborhoods entered bynonwhites do not generally fall and have sometimesrisen because of the concentration of nonwhite de-mand."92

Financial InstitutionsFor a family to buy a house, or a landlord to

provide apartments, a source of credit is necessary.The family, even if it has a substantial income, willrequire a long term mortgage to be able to purchase ahouse. The landlord will need a mortgage to obtainthe capital necessary for the renovation of his prop-erty. It is not surprising, therefore, that the practicesand attitudes of financial institutionssavings andloan associations, banks, mortgage brokers, and insur-ance companieswill have a significant impact on thehousing market. If these institutions are unwilling, forexample, to give a mortgage loan to a black familythat wishes to buy a house in a white neighborhood orif they refuse to make available mortgage loans atreasonable rates in a neighborhood that is predomi-nantly black or substantially integrated, then blackswill not be able to find housing outside of black

"See R. Helper, Racial Policies and Practices o/ Real EstateBrokers (1969).

"See L. Laurenti, Property Values and Race (1961)."National Academy of Sciences-National Academy of Engineering,

Freedom of Choice in Housing: Opportunities and Constraints 23(1972).

22

neighborhoods and housing within black neighbor-hoods will deteriorate.93

Unfortunately, these examples represent the prac-tices of many lenders. In June 1971, a questionnairewas sent to lending institutions by the Federal finan-cial regulatory agencies in conjunction with HUD.Analysis of the questionnaire indicates that discrimi-nation by mortgage lenders is still in evidence. Iflenders take the initiative in providing mortgage loansto blacks seeking housing in white neighborhoods anddemonstrate a willingness to finance at reasonablerates homes and apartments in areas with substantialblack populations, they can make a most importantcontribution to increasing housing opportunities forblacks.

At the Baltimore hearing, the Commission heard apanel of financing experts, including Michael D.Quinn, assistant vice president of Weaver Brothers, aBaltimore mortgage banking firm, and Winfred 0.Bryson, president of Advance Federal Savings andLoan Association, a minority-controlled financial insti-tution. The witnesses agreed that, for a variety ofreasons, home loans had not been readily available toblack applicants. Mr. Bryson's company, AdvanceFederal, was organized to provide loans to minorityfamilies and businesses, including very small loans:

Our association was fout.ded 13 years ago, and thetime that it was founded, the reasons given a largeextent by the individuals who were in part in thereal estate business, and part in the constructionbusiness, all of these being . . . black . . . was thatthe mortgage loan money was not freely available tothe individuals and on exactly the same terms, eventhough mortgages were being granted."

Institutions which finance the housing market havelimited minority access to suburban markets by prac-tices which discourage integrated community develop-ment and heighten residential segregation.

A survey conducted by the Federal Home LoanBank Board revealed a number of discriminatorypractices among lending institutions.95 Some lendersAmitted using the race of an applicant as a factor indetermining whether he would be given the loan or indetermining the terms under which the loan would be

"See U.S. Commission on Civil Rights. 1961 Report: Housing."Baltimore Hearing at 201.95 Federal Home loan Bank Board Survey (released Mar. 1972).

1,111.BB considered the results of the survey inconclusive, since it in-cluded only 74 of the 5,000 federally-supervised savings and loanassociations.

made. Other common practices of mortgage lenders,the survey also found, while perhaps not instituted inorder to discriminate, have the effect of discriminatingagainst minority applicants. For example, lenders dis-count disproportionately a working wife's income anduse the existence of an arrest record as a bar to theapproval of a mortgage.96

"Redlining" is a practice by which certain residen-tial areas, often of substandard ghetto housing, areexcluded from eligibility or greatly disfavored formortgage financing. The justification for this practicegenerally is presented in terms of the area's "rundowncondition." Thirty percent of the responding mortgagelenders admitted to disqualifying neighborhoods forloans because of their residential composition.97 Thepredictable result has been to accelerate the area'sdecline, speeding the exodus of those, usually whites,able to flee to better neighborhoods.

A. J. Wilson, University City's Human RelationsCommission director, described the impact of practicessuch as redlining:

We in University City have had to face, because of16 percent of our population being black, many ofthe same forms of discrimination that black peoplehave experienced for years. We have trouble gettinglevelopers to come in, we have trouble getting fi-nancing for development, we have trouble gettingmortgages. we have some insurance companies start-ing to say: We are going to stop insuring.""

Another discriminatory practice consists of apprais-ing properties at a lower value in black or mixedareas than in all-white areas, making whites reluctantto sell to nonwhites. Mr. Wilson complained that evenFHA appraisers share this bias:

[T]hese things occur today where FHA appraiserscome out and are appraising that property on thebasis of the neighborhood . . . on the basis of thefact that there are black people there, when in factUniversity City is better physically today becauseof a variety of improvements and code enforcementand in our housing program. better physically todaythan it was 5 years ago."

Most of the practices described above are specifi-cally prohibited by the latest Federal Home Loan

"Id.Id.

"St. Louis hearing at 328-29."Id. at 329.

Bank Board guidelines, issued in December 1973.100

Builders and the Construction IndustryIn the field of race relations, the homebuiiding

industry has a somewhat better reputation than thereal estate brokers. The National Association of HomeBuilders t NAHB ) did not oppose the 1968 Fair Hous-ing Act, while the National Association of Real EstateBoards lobbied against it.1"

NAHB has supported the passage and funding ofmany acts furthering low-income housing construc-tion. The Federal subsidy for low-income housing pro-vides builders with an additional market that wouldnot be profitable without subsidy; and the subsidy hasmade the homebuilders allies of groups seekinggreater access to suburban areas for low- to moderate-income housing 102

Nevertheless, the Commission's study of homeown-ership under the Section 235 program in four metro-politan areas found that new developments, built withFederal assistance, reflected the same segregated hous-ing patterns prevalent throughout those communitiesfor conventionally financed howing.193 Suburban de-velopments financed under Section 235 were all whiteor nearly so, while housing sold under the program inthe city was generally occupied by blacks.

The Commission found that some builders activelydiscriminated and that others did so passively, byallowing community practice to determine the racialoccupancy of their projects. Many said that they didnot need to advertise. Word of mouth advertising insegregated neighborhoods often results in segregatedoccupancy.1"

Several builders testified at the Commission's Balti-more and St. Louis hearings. All of the builders testi-fying in Baltimore had developments in Baltimore

11" 38 Fed. Reg. 31653 (Dec. 17, 1973).Iro.shineion at 1'3.On Jan. 5. 1973. HUD suspended all subsidized housing programs.

Addressing the National Association of Hornebuilders on Jan. 8, Sec-retary Romney said the programs had become a "monstrosity thatcould not possibly yield effective results even with the wisest andmost professional management systems. In a Jan. 15 letter to SenatorJohn Sparkman, Chairman of the Sen ay Banking, Housing and UrbanAffairs Committee, Kenneth Cole, Director of the Domestic Council,repeated that argument as the administration's justification for thehousing moratorium. A congressional subcommittee disputed theadministration's evaluation, finding instead that "most of the scandalsand abus-s in our housing programs have been due to faulty administration by the Department of Housing and Urban Developmentrather thin to any inherent defects in the legislation." Subcnmm. onPriorities and Economy in Government of the Joint Economic Comm.,!lousing Subsidies and Housing Policy, 93d Cong., 1st Sess. 3, 6,(1973).

13 Home Ownership at 87.Id. at 51-57.

23

County. Henry J. Knott, Melvin Colvin, and Carl T.Julio had black and white families in all of theirprojects, although they did not know in what num-bers. Harvey Nherberg. however, is lw built a devel-opment of houses priced at $16,000 to $17,000 in all-white Essex County, had no black buyers.

All of the builders found strong demand for theirproduct.

The apartments we build. we don't even advertisethem! They rent so cheap. they just rent.'"'

Eliot M. Alport, of the Eliot Construction Companyof St. Louis, Missouri, felt that the marketability ofhis houses was affected by raciiA prejudice. Thehouses he built in St. Louis County and Florissantranged from $15,000 to $20,000 in price and onlyabout or 5 out of 200 had been sold to blacks.Commission counsel asked Mr. Alport what the effectof those sales had been. He replied:

They had a definitive adverse effect , . . The prob-lem was that if we sold a home, apparently as Iunderstand it. to a black customer on Lot A. whenthe next customer came along, he, having a choiceof lots just as the black customer did, he chose notto be on lotthe lot on either side of that blackcustomer, nor the lots across the street from thecustomer. nor the lots behind the customer, so thatall of a sudden one sale to the black customer meantthat we had anywhere from 5 to 10 lots which ourwhite customers preferred not to be associated with.Also. I might say that from what I hear again from''ur salespeople, a black customer did not want to benext to another black customer: he would prefer tohe among white customers.'

Mr. Alport did not think that homebuilders shouldadopt affirmative programs but considered it the roleof government to insure that housing is open withoutdiscrimination. He said he had been willing to an-nounce a nondiscriminative policy "if they could getothers to go along," but that apparently the effort wasunsuccessful, since he was never contacted about itagain."7

John A. Stastny, at the time president of the Na-tional Association of Home Builders, told the Commis-sion', Washington hearing that the association for

Testimony of Henry J. Knott, Baltimore Hearing at 183."St. Louis Hearing at 280.i07 1d. at 281-282.

24

many years had publicized within its membership itspolicy in favor of open housing.108 The associationhad not, however, adopted a policy of affirmativeaction under which builders would assume responsibil-ity for overcoming segregated marketing patterns inthe sale of their developments. NAHB, in fact, hasconsistently opposed HUD's affirmative marketing reg-ulations on a variety of grounds, including the argu-ment that it places "FHA-insured housing at a distinctcompetitive disadvantage"109 and "drives some build-ers out of the FHA program."'" The association hasalso ignored the evidence showing that without affirm-ative efforts to promote fair housing, new housing willcontinue to reflect existing residential patterns. Af-firmative marketing techniques are necessary to over-come segregated practices and only recently has theFederal Government required that such techniques beutilized in all subsidized construction projects.

The Role of Major EmployersEarlier sections have described the move of many

corporations and plants to suburban locations, and theeconomic, racial, and logistical factors involved in theresulting inaccessibility of suburban-based jobs tocentral city minority group members.

The Commission heard clear evidence that the mis-match between jobs and housing is a serious problemof nationwide significance. Neil Gold, codirector ofthe Suburban Action Institute, told the Commission atthe Washington hearing of the tremendous growth ofsuburban job opportunities, both blue and white col-lar, that occurred in the 40 largest metropolitan areasin the last half of the sixties:

In that period, central cities gained 782,000, whilesuburbs gained 4,370,000 or 85 percent of the totalincrease, in new jobs.

Now, to put the figures that way really masks thereality of what has happened. For example, in themanufacturing sector which provides job oppor-tunities for a large proportion of the minority labor

"9 Washington Hearing at 383."Letter of Nov. 1, 1971, from John A. Stastny, president of NAHB,

to the Office of General Counsel of HUD, stating NAHB's oppositionto HUD's "Affirmative Fair Housing Marketing Regulations" (36 Fed.Reg. 19320, Oct. 2, 1971) (letter in USCCR files).

10 Letter of Jan. 7, 1972. from Richard J. Canavan, staff vice pres-ident, Builder Services Division, NAHB, to Samuel J. Simmons,Assistant Secretary of HUD for Equal Opportunity, containing furthercomments in opposition to HUD's affirmative fair housing marketingprogram (letter in USCCR files).

force in the United States, the total number of newjobs in the last five census years in the I0 largestSMSA's was 2,080,000 . . . The cities actually lost29,000.

It seems to me N1hen you put together the generalsense of what's happening, the outmigration of jobs,and when you look rather carefully at . . . whatkinds of jobs are leaving the cities, you see that itis precisely those jobs which low-income, moderate-income and minority workers must have in orderto survive, so what's really at stake in the failure toallow minority people and low- and-moderate-incomepeople to live throughout metropolitan areas is in asense a denial of equal employment opportunity tothese groups. Itt

The determination of many corporations that sub-urbs offer such advantages as more space and a moreattractive tax picture has only led to a worsening ofthe property tax base in the inner city and increasingunemployment. The gravity of the problem was em-phasized by President Nixon in his statement on equalhousing opportunity:

Another price of racial segregation is being paideach day in dollars; in wages lost because minorityAmericans are unable to find housing near the sub-urban jobs for which they could qualify. Industryand jobs are leaving central cities for the surround-ing areas. Unless minority workers can move alongwith the jobs, the jobs that go to the suburbs willbe denied to the minoritiesand more persons whowant to work will be added to the cities' unemploy-ment and welfare rolls."2

A case study of the problem of jobs but no housingis presented by the Ford Motor Company plant locatedin Mahwah, New Jerseya low density, strictlyzoned, prosperous community in Bergen County.When Ford moved its facility to this location fromEdgewater, New York, it made no effective effort tolocate its black and Puerto Rican employees in thenew area."3 The problems created for workers weredescribed at the Commission's hearings: long trips toand from work, expense, delays, and, at times, the lossof employment due to inability to obtain housing inthe new location.

,n Washington Hearing at 271.1" Statement by the President on Federal Policies Relative to Equal

Housing Opportunity, June 11, 1971, at 4, printed in WashingtonHearing at 573, 576.

' Washington Bearing at 402.

When Ford Motor Company proposed to locate aplant there, doubtless many in Mahwah welcomed thetax revenues and consumer dollars which the plantwould bring. Yet, according to testimony at the Wash-ington hearing, Mahwah had different feelings aboutthe workers who would staff the plant and spend theconsumer dollars. A worker at the plant, Aaron Res-nick, told the Commission about the scarcity of landavailable for low- and moderate-income housing:

To begin with . . . Mahwah is the largest townshipin Bergen County, and one of the largest townshipsin the State of New Jersey. Over 75 percent of theirland is still vacant . . . Over 50 percent is zoned1 acre or 2 acres . . . Twenty or 25 percent of it iszoned for additional industry, and right up to thepresent they still haven't made any provision forthe workers to come along with the industry.

Mr. Powell (the Commission's General Counsel).Is there any significant percentage of the land zonedfor multi-unit development of low and moderateincome housing?

Mr. Resnick. Approximately 1 percent zoned withvery little of it remaining available.

Mr. Powell. Mr. Resnick, have you discussed theworkers' housing need with Mahwah civic groups?

Mr. Resnick. Yes, I have.

Mr. Powell. What has been the response of thosegroups with whom you have talked?

Mr. Resnick. Well, we have gotten a favorable re-sponse from one newly formed organization. How-ever, generally the response has been antagon-istic."'

Robert Carter, president of the National CommitteeAgainst Discrimination in Housing, described the situ-ation in New York City:

... the jobs are moving out.... there is a displace-ment and mismatch between job opportunities andavailability. Blacks are being left in the cities whileblue-collar jobs are burgeoning in the suburbs. Atthe same time the central city is becoming generallyprofessional, managerial, high prestige, white collaremployment, and service oriented."'

Charles W. Swartout, vice president and generalmanager of the personnel division of Mallinekrodt

" Id. at 403."6 Id . at 157.

25

Chemical Works in St. Louis, explained from an em-ployer's point of view the difficulty of hiring minori-ties to work at a newly-established suburban facility:

. . . it has now been about a year and a half thatwe've been out there, and we have tried to hireminority people for our Brown Road installation.and have found it impossible. Several things makethis so. Number one, there are no large minoritygroups in our area out there. with the possibleexception of Kin lock, which isn't too far from us.

We have :,,und that no one has been willing to behired at St. Louis for a job at Brown Road, noneof the minority employees. It has even gotten tothe point where we have some young women who arevery competent secretaries who, upon being askedto transfer. have preferred to stay at the St. Louisplant.'1"

At the Commission's St. Louis hearing, wasconsiderable testimony about the absence of housingopportunities for minority workers near the suburbanplant of McDonnell Douglas. Orrie W. Dueringer,housing coordinator for the company, testified that, tohis knowledge, most of the white employees lived inSt. Charles County and Florissant. Some blacks livedin Kin loch, some in Ferguson, and the rest in St.Louis City.117 In spite of this segregated pattern, thecompany made no effort to see that housing listed bythe company was actually open on a nondiscrimina-tory basis.

Staff Director Howard Glickstein asked the com-pany's personnel director whether it should do more:

Mr. Windsor. Well, Mr. Glickstein, I don't knowthat I can speak for the entire corporation on whatits long range objectives and policies should bepolicies established by the chairman and officershut I can say this, we have our hands pretty fulltrying to run our plant and build airplanes. Thisis pretty highly competitive business.'

Upon further questioning, Mr. Windsor recognizedthat his corporation had a duty to promote equalopportunity, but he felt that he was primarily in hisposition "to assist in trying to get those airplanesbuilt and out the door." 119

Some companies grew to regret their shortsightedview of housing problems. Idamae Garrott, president

1'1St. Louis Hearing at 51.U? St. Louis Hearing at 173.

Id. at 174.219 1d. at 177.

26

of the Montgomery County, Maryland, Council, de-scribed the reactions of several corporations whichhad recently moved into the county:

I have met either with the presidents or top manage-ment people in those firms and they have said tome really with considerable bitternessand I don'tblame them perhaps for being bitterthat if theyhad known that the housing situation would be sobad for low and moderate income people thatindeed they would not have brought their firms toMontgomery County. 120

The cost of housing is so high in MontgomeryCounty, partially due to local land use controls that,Mrs. Garrott said, the county has taken "the cream . .

and not -provided [for] the needs of . . . lowerechelon employees." 121

Montgomery County had pursued the standard sub-urban policy of attracting businesses for their taxbenefits while attempting to avoid any concomitant taxburdens which would be brought in by lower-incomeresidents. Other communities apparently enforced thatpolicy by means of specific agreements with incomingindustry. One company's vice president told the Mas-sachusetts State Advisory Committee meeting that hiscompany had promised to "stay out" of housing andallow a town to continue its exclusionary land usepractices in order to obtain the industrial zoning thecompany needed: "[NV]e have made . . . a pledge tothe communities that we locate industry in, that wewill not . . . deal in housing." The communities, hetestified, have zoning bylaws "so antiquated that youcan have housing in the industrial area as well asindustry." They are concerned that if the industrialsite cannot be filled with industry, the company willbuild housing. "[Wj-e-had to make it quite clear theywouldn't suddenly wake up one or two years later andfind there was a residential development." 122

Very few employers have acknowledged any respon-sibility for efforts to overcome such barriers to minor-ity workers as the lack of housing and transportation.Some corporations have undertaken to assist the devel-opment of nondiscriminatory and low-income housing.After the Commission's St. Louis hearing, the Depart-ment of Defense increased pressure on the McDonnellDouglas Corporation to comply with the affirmativeaction requirements of Executive Order 1124.6. There-

22° Washington Hearing at 73.111 Id.

u2 Mass. S4C -MCAD Boston Transcript, voL 1 at 245.

after, the corporation strengthened enforcement. of itsfair housing policy in referrals and made a financialcontribution to the construction of a moderate-incomehousing development in Black Jack, Missouri, whichhas been the subject of a well-known zoning contro-ver1.12"

Representatives of other companies testifying at theBoston joint meeting of the Massachusetts CommissionAgainst Discrimination and the Massachusetts StateAdvisory Committee of the U.S. Commission on CivilRights said that they had considered the housingproblems of their minority employees in areas withscarce supplies of available housing. Robert Palmer,community relations manager for Polaroid Corpora-tion. stated that Polaroid contacted local banks andreal estate brokers and leased several apartments toserve as temporary quarters for employees havingdifficulty finding housing. Mr. Palmer felt that theseactivities had produced some responsiveness on thepart of mortgage lenders and real estate brokers.124 ANorton Company employee testified that the boardchairman of Norton called six large real estate agentsin the Boston area "and told them, rather strongly andrather forcefully. that Norton Company was bringingin new black employees from all parts of the country,and they damn well were going to find places to livearound Worcester, and they all have." 125

Some midwestern corporations which were repre-sented at the Commission's Washington hearing tooksome modest steps to improve low-income housingopportunities in their communities. The Northern Illi-

iso dkrii.w.i..n di. 5. p.41. below."4 Mass. SAC-MCA D Boston Transcript, vol. IV at 207-209.'m Id., vol. IV at 243.

nois Gas Company, for example, had worked withChicago's Leadership Council for Metropolitan OpenCommunities, a group formed in 1965 to promoteopen housing. and had sponsored some moderate-in-come developments in suburban areas. But in 1971only one project of about 40 homes was under con-struction. Two proposed projects failed to obtain thenecessary zoning.'" Another corporation, the Cum-mins Engine Company, encouraged a white developerto build a 100 unit single-family project under Section235 in its community.127 The company made no finan-cial contribution to the project.

The effectiveness of these companies' efforts is notencouraging.12" Despite these few examples, the Com-mission generally found that private corporations areunlikely to pursue with -persistent vigor a very difficultfight in the absence of stringent economic necessity orgovernmental pressure. Marvin Chandler, chief execu-tive officer of Northern Illinois Gas explained whyonly the coalition of the large and prestigious corpo-rations that make up the Leadership Conference hasenabled him to persist so far:

If I were up there alone as Northern Illinois Gastrying to build this [low-income] project, or anyother which may fit zoning better, I would be prettyuncomfortable, because there is flak, and thesepeople are customers, and they are public, and wewant to live and get along with everybody.'"

"" Washington Hearing at 412-414.'27 Id. at 418.11 Evaluations by Commission staff of the effort of the Leadership

Conference indicated that it had not been successful in opening upthe Chicago metropolitan area to low-income and minority persons.Chicago Field Trip Report (Nov. 1971) (in USCCR files).

12' Washington Hearing at 414.

27

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I . Li. I,LI. 1

The Causes of Racial Polarization:State and Local Government

Control of the use of landthe decision as to whereto locate housing, stores, industry, and so onhastraditionally been at the level of local governmei.t.The extent of this control is such that individualproperty owners have been limited in the use to whichthey might put their land. The decisions made by thelocal government predictably have been ones whichwould benefit, or were believed to benefit, the resi-dents of the municipality in question. In many subur-ban municipalities the prevailing view has been thatthe community should be homogeneous in its popula-tion, that housing patterns associated with big cityslums should be avoided, and that population groupswhich might cause an increase in local taxation shouldlive elsewhere. This, in more concrete terms, hasmeant land use policies which exclude lower-incomefamilies, a disproportionate percentage of whom areminorities.

Residents of the metropolitan area as a whole, espe-cially those residents who are in the groups whichtend to he excluded, have no voice in the process; norhave there been effective mechanisms to assure that acommunity take into account more than the above-described narrow view of its own self-interest.

Local control is exercised in several ways. Commun-ities use zoning to prevent land uses which are consid-ered incompatible or in conflict with each other. Sub-division regulations determine the nature ofresidential development by specifying, for example,how wide residential streets will be and whether side-walks are required, and by allocating the costs ofthese and other improvements between the developerland thus ultimately the home buyer) and the munici-pality. Building codes regulate construction materialsand methods, thereby influencing the cost of the fin.ished product.

Other actions which the local government mighttakeor decide not to takeare also directly relatedto who will live within its boundaries. Urban renewalcan displace residents who arc unable to find otherhousing within the community. The jurisdiction canprevent low- or moderate-income housingwhether ornot financed under a Federal programfrom beingbuilt. Finally, it can fail to intervene in the system ofprivate discrimination described in the last chapter.

Control Over Community Development

Zoning, though local in its operation, is metropoli-tan in its ramifications. A decision by a community toallow, for example, a shopping center or industrialpark within its borders will affect the growth pattern,the transportation patterns, and consequently the gen-eral welfare of residents of the whole metropolitanarea.'" A community's decision on the type of hous-ing to allow will have an even greater effect upon theresidential opportunities of people throughout the met-ropolitan area. Commission witnesses did not questionthe validity of the use of zoning controls to regulatethe use of land and population density. They pointedout, however, that in the metropolitan context theinterests of central cities and suburbs do not necessar-ily coincide, and the suburbs often use their land usepowers so as to exclude low-income and minoritypersons. As already noted, such exclusion has a dis-proportionately adverse effect upon blacks, MexicanAmericans, and Puerto Ricans.

The zoning system is established at the State level

136 See Daniel R. Mandelker, The Role of Zoning in Housing andMettopolitan Development, in Papers Submitted to the Subcomm. onHousing Panels ol the House Comm. on Banking and Currency, 92dCong., 1st Sess. 785, 789-790 (1971), and Staff of U.S. Commissionon Civil Rights, Land Use Control in Relation to Racial and EconomicIntegration, in Baltimore Hearing at 640.

29

and exercised by the local governments to regulate theheight, size, and density of structures and the locationand uses of lands, prohibiting some uses altogether forthe purposes of public "health, safety, morals or gen-eral welfare."'" Although these powers were con-strued by the Supreme Court of the United States(when zoning was in its infancy) to reach their limit"where the general public interest" outweighs "theinterest of the municipality," 132 they have been liber-ally construed by the State courts in many decisionschallenging the use of zoning powers.133

Local suburban zoning officials, who are responsibleonly to their limited constituency, have used theirpowers to further the suburbs' "general welfare" as itis perceived by such communities. In many suburbsthe policy has been to limit residential development tothe construction of relatively expensive single-familyhomes at low densities.134 This policy has been imple-mented by means of density controls (such as mini-mum lot size requirements) cost controls (such asminimum house size requirementsl, and the exclusionof specific uses (such as multifamily dwellings ormobile homes) .135

When suburban officials were questioned at Corn-mission hearings about their responsibility to thewhole metropolitan area, their responses showed pri-mary concern for preserving what was consideredtheir local interest. Lawrence Roos, supervisor [chiefexecutive] of St. Louis County, expressed his point ofview:

I would like to see in St. Louis County a countywhere anyone who seeks the quality of life that wethink our county represents and who has theeconomic capacity to live in that quality of life,he they black or white I think that they should allhave the privilege [of] enjoying this . . . But Idon't think it is the business of government toand certainly of a county governmentto reachout and to reach into the inner city, let's say, andto physicallyto transplant peopleI would hateto be a party to a transplant if you will, of slumsfrom the city into the county.1'f

Mr. Roos expressed concern for the living condi-tions of poor and minority persons in the city of St.

Village of Euclid v. Ambler Realty Co. 272 U.S. 365, 373 (1926).1'2 Id. at 390.'13 Trubeck, Will State Courts and Legislatures Eliminate Exclu-

sionary Land (Ise Controls? in Washington Hearing at 840.L" Id. at 833."5 Id. at 834.

St. Louis Hearing at 367-68.

30

Louis and he also favored metropolitan cooperationbetween governments. But he did not view increasinghousing opportunities in his jurisdiction for less afflu-ent persons as a required or desirable method ofsolving area problems.

Dale Anderson, Baltimore County executive, hadthe same point of view. He was in favor of rebuildingand improving Baltimore City. But, when asked whyBaltimore County's residents did not encourage in-migration from the city which would relieve Balti-more's crowding, he replied:

I do not think it is a hostility. I think . . . it isan apprehension that they do not want to see themistakes duplicated. They do not want to see over-crowding here and overcrowding there. They wanta planned community.'"

Mr. Anderson also stated:

We cannot go about . . . making the same mistakethat we made in the major cities by just movingour problems across the county line into thecounty.'38

These statements represent more than the vaguerhetoric of suburban officials. A close study of subur-ban zoning actions shows that many local governmentshave implemented these policies systematically and ef-fectively. The policies often have been effectuated intwo stages: first, the displacement of the poor, rural,or semirural black population enclaves that were oftenfound in what have become today's suburbs; then, thezoning of land to be developed in such fashion as todiscourage the construction of housing within theprice range of low-income groups.

Displacement of Minority Residents

A survey of zoning in Baltimore County conductedfor the Commission by Yale Rabin, an urban planningconsultant, showed that the county had used its zoningpowers to eliminate many black suburban enclavesand at the same time had failed to use the samepowers to facilitate residential construction for low-and moderate-income persons near employment oppor-tunities. Mr. Rabin concluded from his study:

I think it can be said that development control

137 Baltimore Hearing at 399.us Id. at 393.

activities in Baltimore County have functioned tosubstantially reduce housing opportunities in thecounty for low-income, predominantly but not ex-clusively black households.'""

He noted that nonresidential zoning of black resi-dential areas has been a significant factor in thedemolition of many black-occupied homes. New con-struction or even additions to or renovations of exist-ing structures may be prohibited and, as the existinghomes fall into disrepair, they are often vacated anddemolished. Other homeowners, surrounded by decay-ing houses or by industrial uses, are prompted tomove out.

Two of the examples Mr. Rabin gave were inTurner Station and Towson. In the latter, an entireblack community called Sandy Bottom was destroyedby commercial zoning, which permitted landlords tosell properties rented by blacks for more profitablecommercial uses."° In Turner Station, a white resi-dential pocket located in an industrial area was zonedto remain residential and thereby avoided destruction,while the surrounding black residential area (withhomes which were built at the same time) was zonedindustrial.'" As a result, most of the black homeswere torn down.

Other action by the local government also preventedthe development of suburban black communities. Ac-cording to Mr. Rabin:

The expansion and renewal of some black residen-tial areas is prevented by adjacent nonresidentialzoning or unreasonably low density residential zon-ing. Some black residential areas have been isolatedfrom their surroundings and particularly fromadjacent white residential areas by discontinuousstreet patterns and, as indicated earlier, also manyblack residential areas are characterized by unpavedstreets and a generally low level of public improve.ments while adjacent white residential areas oftenhave paved streets and are better served.

Now code enforcement and subsequent demolitionscombined with the absence of available low-costhousing, has forced many low-income black andsome white families to leave the county.""

Examples of isolated communities included Laura lle,

'39 Baltimore Hearing at 278. See Yale Rabin, The Effects of Devel-opment Control on Housing Opportunities for Black Households inBaltimore County, Maryland, in Baltimore Hearing at 698.

1' Id. at 279-80."' Id. at 280.-"Id. at 278.

Bengies, and Edgemere.143 Some of these settlementsdate back to the Civil War.

Other governmental actions besides zoning can leadto the displacement of suburban and rural black com-munities. Urban renewal programs and highway con-struction, for example, can also force blacks into cen-tral city ghettos.'"

The Elmwood Park section of Olivette, Missouri, isa semirural area located along the railroad tracks atthe northern boundary of the city. In 1960, about 30families, 29 of them black, lived in the area.'" In1961, the city received Federal funds to plan an urbanrenewal project. The city's plan was to attract indus-try to the black residential area. The residents of thearea were to be displaced to public housing in aneighboring area outside Olivette and within the cityof St. Louis.'" Nine years later, no relocation housinghad been provided by Olivette, and as residents sawthe inevitability of industrial redevelopment and resi-dential displacement, they moved out, reducing thepopulation of the area to five or six families."' Afterpressure from HUD, Olivette set aside land in theurban renewal area for 24 units of relocation housing,but as of May 1971 none had been built.148

Exclusion of Minorities

The National Committee Against Discrimination inHousing (NCDH) has characterized suburban policygoals in the New York metropolitan area as follows:

The objective is to create a community that is astrouble free an island as human ingenuity canmake it in a troubled urban sea, by regulating landuse and building construction to provide homes forthose deemed desirable, and to do it as cheaply aspossible by attracting non-residential uses that paytaxes but require few services.'"

Id. at 717-719.1" For a discussion of the displacement effects of the Federal high-

way program see ch. 5, p.44, below."'Testimony of Herman Davis, Sr. Louis Hearing at 386.18 Staff of U.S. Commission on Civil Rights, Housing in St. Louis,

id, at 564."7 Id. at 386."9 Testimony of Michael Farris, executive vice president, Urban Pro-

gramming Corporation, and project director, Olivette Land ClearanceProgram, Transcript of Open Meeting of the Missouri State AdvisoryCommittee to the U.S. Commission on Civil Rights, St. Louis, vol. Iat 19-36 (May 7, 1971). It should be noted that responsibility forthe delay in the construction of the 24 units is as much HUD's asOlivette's.

," National Committee Against Discrimination in Housing, Jobs andHousing, Final Report 26 (1972).

31

This policy, implemented through the use of zoning,is making suburban housing for lower-income familiespractically unavailable. A survey of the New Yorkmetropolitan region by NCDH found that almost allsuburban municipalities with significant amounts ofvacant land zoned it for single-family constructiononly.15° The exclusion of multifamily construction insuburban communities not only has reduced the sup-ply of rental 1 and less expensive) housing in thesuburbs but has also resulted in an unbalanced distri-bution of such units.

The exclusion of apartments from a municipalitytends to exclude lower-income families, who cannotafford the higher cost of a single-family house. Thisexclusion is found in many suburban communities. Inthe four suburban New Jersey counties which ring thepredominantly black city of Newark, for example, onlyone half of one percent of the land is zoned to allowapartment construction.151

While some suburban jurisdictions prohibit apart-ment construction altogether, others limit the numberof bedrooms apartments can have, in an attempt tominimize the number of school-age children who moveinto the jurisdiction. For example, in the four subur-ban New Jersey counties more than 80 percent of theland zoned for apartments is subject to bedroom re-strictions. In the areas so restricted, usually about 80percent of the units can have no more than onebedroom.152

Larger house sizes have increased the cost of hous-ing. thus limiting the choice for lower-income families.In 1948 the average size of an FHA-insured housewas 972 square feet. By 1970 this average had in-creased to 1,235 square feet.153 While some of thisincrease was due to consumer demand, much of itresulted from zoning requirements. In the four coun-ties discussed above, for example, about 80 percent ofthe land is zoned for houses of at least 1,200 squarefeet.154

In the earlier part of this century, a lot whichmeasured 60 feet by 100 feet f or 6.000 square feet)was considered ample for a detached, single-familyhouse. Row houses had lots less than half this size. In

Id. at 32.Williams & Norman, Exclusionary Land Use Controls: The Case

of NorthEastern New Jersey. 22 SIr. L. Rey. 375, 485 (1971) (here-after referred to as illiorns & .Vorman). The four counties surveyedare Morris. Somerset. Middlesex. and Monmouth.

".2 Id. at 181 181.''a L. Sagalyn & G. Sternlieb, Zoning and Housing Costs: The Im-

part of Land-se Controls on Housing Price ii (1972).'" W,dhams & Aorman, supra note 151, at 489.

32

many suburban communities today, lots of 20,000square feet to one acre (43,560 square feet) arecommon. Seventy-seven percent of the total land in thefour New Jersey counties above is zoned for lots ofone acre or more.''' The prevalence of large lotsforces the price of housing higher. Small lots or landzoned for apartments increase in value because oftheir scarcity, making what is supposed to be low- ormoderate-income housing prohibitively expensive onmuch of the land which is appropriately zoned.156 Lowdensity residential areas are of necessity automobileoriented, since shopping and other facilities cannoteconomically be located within walking distances ofmany families and since the cost of an effective publictransportation system becomes prohibitive. This actsas an additional harrier to lower-income families.

In Baltimore County restrictive zoning preventedthe growth of housing for workers from keeping upwith the growth of employment opportunities in thecentral part of the county. Yale Rabin testified:

I am of the opinion that the zoning process has notkept up with the tremendous growth in employment,particularly as it has taken place in the Cockeysvillearea, and there would appear to be a serious short-age of zoning for high density housing in an arealike that where over 16,000 new jobs have developedduring the past 10 years.

The zoning pattern in the county is one which doesnot reflect at all the tremendous growth in employ-ment in that area, nor does it adequately reflect thegrowth which is taking place in the Reisterstownarea.'"

He characterized low-income exclusion as considera-ble, although not total:

The traditional suburban device of totally excludinglow-cost housing by preventing all high densitydevelopment is not a factor; however, over 65 per-cent of the land designated for residential use inthe portion of the county that we are talking aboutis zoned for two houses to the acre or less, and ifone considers the residentially zoned land which isyet to he developed, about 90 percent of that iszoned for one house to the acre.'"

Id. at 495.For a general discussion of the relation between zoning and

housing costs in 'sew Jersey, the State whose land use has been themost studied. see Somilyn & Sternlieb. supra note 153.

Baltimore Hearing at 279.Ird3 Id. at 278.

Those who would preserve exclusionary practicesoften argue that their desire is to minimize local taxes,not to exclude persons because of their race. But thatargument fails to explain much of the exclusion whichis practiced. Recent research indicates that zoningpractices are as restrictive in areas where local gov-ernments do not hear the cost of new residents as inareas in which they do,I59 which suggests that subur-banites are as concerned about the character andcomplexion of their community as they are about thecost in taxes which new residents will add.

The primary purpose of the zoning power, undermost State enabling acts, is to regulate land use, andnot to regulate the racial or economic composition ofthe population. Yet the result, as one witness pointedout, is often the same:

. . . frequently it is sort of a combination of deci-sions, none of which were intended to have discrim-inatory effects which somehow has this effect, andtherefore, it's very hard to find a clear, morallyreprehensible or clear-cut discriminatory act to putyour hands on. Everything is very murky, every-thing is very obscure, and yet if you see it in itsoverall pattern it is in some ways more discrimina-tory than things that were consciously set forth tocreate racial segregation.. . .110

While many local governments would object to anydiminution of their control over the use of land, thepresent system of zoning controls is in clear need ofmodification. Suburban zoning has had the effect bothof displacing and of excluding low-income and minor-ity families, and its use toward this end has often beenintentional.

Failure to Provide Low-Income HousingLocal government approval is required before either

public housing or rent supplement housingthe twomajor Federal housing programs which reach poorpeoplewill be allowed.101

Public housing is built, purchased, or leased and ismanaged by local housing authorities, which must be

'" E. Branfan, B. Cohen & D. Trubek, Fiscal and Other Incentivesfor Exclusionary Land Use Controls 21 (Center for the Study of theCity and its Environment, Institution for Social and Policy Studies,Yale Univ.. Mar. 1972).

"" Testimony of David Trubek, Washington Hearing at 282."I See generally Henry J. Aaron, Shelter and Subsidies: Who Bene-

fits from Federal Housing Policies? (Brookings Institution, 1972)(hereinafter ,sited as Aaron).

1°142 U.S.C. §§1401-35 (1964), as amended (Supp. Y. 1965-69)

created by local governmental action.162 This localaction can be taken only if the State has passedappropriate enabling legislation,163 which, as of 1971,every State except Wyoming had done.164 HUD willnot approve an application for public housing subsidyunless the local government first approves the applica-tion'° and agrees to exempt the project from localproperty taxes.I66 The authority in return agrees topay a specified portion of its gross rents from theproject in lieu of taxation.'"

Between 1949 and 1969, the period during whichthe character of many suburban communities was es-tablished, an additional requirement of eligibility forpublic housing was imposed. Such housing could notbe approved until a community had developed a"workable program for community improvement," de-fined as a plan for meeting (among other things) thecommunity and housing needs of lower-income fami-lies.'" Middle-class communities generally felt no needoa have such a "workable program." The requirement,therefore, served as an additional barrier to publichousing.

Consequently, the governing bodies which are oftenmost receptive to public housing are those in areaswith large minority and low-income populations. Com-munities with few minority or low-income residentsmay be neither motivated by nor receptive to the ideaof establishing public housing authorities to approveindividual project applications.

The idea behind the rent supplement program169 isto increase the housing choice of low-income familiesby enabling them to live in housing designated forrent supplement, as an alternative to public housingprojects. Unlike public housing, the tenant whose in-come increases is not required to leave rent supple-ment housing, but may remain, although with a re-duced subsidy.179 The rent supplement program canreach persons whose income approximates that of per-sons eligible for public housing by supplementing therents of persons who are already benefiting from liv-

113 42 U.S.C. §1402 (11) (1964), as amended (Supp. V, 1965-69).'D.' Aaron, supra note 161, at 111."6 42 U.S.C. §1415 (7) (1964), as amended (Supp. V, 1965-69).

42 U.S.C. §1405 (d)."742 U.S.C. §1410 (h)."'Housing Act of 1949. 42 U.S.C. §1131. Housing and Urban De-

velopment Act of 1969, 12 U.S.C. §1125; see U.S. Department ofHousing and Urban Development, Workable Program for CommunityImprovement, HUD Handbook, RHA 7100.1 (Oct. 1968). Until 1969a workable program was also -Nuired before housing under the221(d)(3) moderate.income housing program would be approved.

I" Pub. L. No. 89-117, 12 U.S.C. §1701s (1964).1-3'12 U.S.C. §1701s.

33

ing in HUD-subsidized housing.171 Up to 40 percentof the units of a federally-subsidized moderate-incomerental project may receive rent supplement pay-ments.172 Although a local government is no moreinvolved with rent supplement housing than it is withany other housing, Congress has given local munici-palities the power to veto rent supplement housing.173

These requirements generally have frustrated thefunctioning of such programs in suburban areas. Mostsuburban areas have neither established housing au-thorities nor authorized rent supplement projects, evento take care of the housing needs of their own low-income residents, much less to meet the needs ofresidents of other parts of the metropolitan area.

The Commission heard testimony from several pub-lic officials from suburban communities concerningtheir unmet needs for public housing. Mary Cardilli-chio. housing director of the Baltimore County Com-munity Action Agency, said that it was a daily experi-ence to find poor families moving from the county tothe city of Baltimore because of the absence of apublic housing authority (and, consequently, of publichousing) in the county. In a typical month, 67 fami-lies came to the Baltimore County Community ActionAgency in search of housing. Of these, only the fourwho were not poor could be helped.174 Even the city'spublic housing had a waiting list, of more than 2,700names.175 Yet the county government did not approveany public housing construction until 1972, whenfewer than 500 units were funded by HUD.176

Even a suburban area such as Montgomery County,Maryland, which had an official policy of expandingboth minority and kw-income housing opportunitieshad only about 700 units of public hou,ing in opera-tion in June 1971.177 The executive director of thecounty's housing authority estimated that at the timeapproximately 10,000 families in the county neededpublic housing."8

"' Median income for families in rent supplement housing is $2,089compared with a median of $3,636 for families in public housing (andless than 65 years old). Rent supplement families, however, tend tobe smaller. Aaron, supra note 161, at 115, 135.

in 12 U.S.C. §1701s (h) (D) (1964), as amended (Supp. V,1965-69).

"'Local approval may be accomplished by inclusion of rent supple.ment in a community's workable program or by local government ap-proval of the rent supplement program. See 42 U.S.C. 1451(c), 24C.F.R. §5.15(c). Pub. L. No. 91-556, 84 Stat. 1459 (1970).

"4 Baltimore Hearing at 52."5 In 1969, according to Mrs. Cardillichie. 6 to 10 families a week

were applying for public housing in Baltimore City from the surround-ing counties. Id. at 53.

"° Washington Hearing at 98."I Washington Hearing at 67."5 Id. at 68.

34

The problems outlined above are exacerbated by thefact that in many States local officials are required tosubmit decisions to provide low- or moderate-incomehousing to popular vote. Such proposals often havebeen defeated in referenda. The Supreme Court, inJames v. Valtierra,179 held that a California StateConstitution requirement that low-rent public housingbe approved by the majority of those voting at acommunity election did not violate the equal protec-tion clause of the 14th amendment. The case arose inSan Jose, California, where the local government'splan to provide low-income housing was defeated atthe polls. Mayor-elect Norman Mineta of San Josetestified at the Commission's Washington hearing con-cerning that decision's impac* on the city.

The most recent study at the time had shown thatthe city's unmet need for low-income housing in 1969was for 14,500 units.'" About 85 percent of thepersons who could not afford housing on the privatemarket were members of minority groups. The citycouncil had approved 1,000 units, on a scattered sitebasis, for construction. The voters subsequently de-feated the proposal under the procedure which theSupreme Court refused to set aside. The families forwhom the housing was intended continued to live insubstandard units as of the time of Mayor Mineta'stestimony.

Mayor Mineta said he believed that his city had aresponsibility to promote the development of adequatehousing for all of its citizens, including those of lowincome. However, meeting that responsibility wasmade more difficult by the referendum requirementwhich is applicable only to low-income housing. Hefelt that this burden was unfair:

I am not a lawyer but to my mind this constitutesdiscrimination, not only against the poor, which isbad enough, but due to the correlation betweenbeing poor and being of a racial minority, it con-stitutes discrimination against our racial minoritycitizens as wel1.181

Referendum requirements raise the difficult issuefaced by the Supreme Court in the Valtierr.o case: in acountry dedicated to democracy, when does a require-ment which promotes citizen participation constitute adeprivation of individual rights? Many decisions have

175 402 U.S. 137 (1971).i" Washington Hearing at 210.3" Id. at 211-212.

established the principle that constitutionally protectedrights may not be submitted to majority vote.182 InValtierra, the Supreme Court did not reach the issueof whether a referendum such as the one at handwould be constitutional if it were shown that its pur-pose or effect was primarily racial, rather than eco-nomic. As the Court stated: ". . .the record herewould not support any claim that a law seeminglyneutral on its face is in fact aimed at a racial minor-ity." ''"

Failure to Enact or Enforce Effective FairHousing Laws

The claims of suburban officials that only economicsprevents more minorities from living in their commun-ities are often refuted by the failure of such communi-ties to outlaw explicit racial discrimination in privatehousing. From the Commission's hearings, it is fair toconclude that action to prevent such racial discrimina-tion is necessary to overcome the physical and psycho-logical racial barriers in every community which isnot already integrated. At the St. Louis hearing, wit-nesses from University City, one of the few integratedsuburbs of St. Louis, emphasized the role played bygovernmental action in that community:

In 1564 University City passed fair employmentordinances, public acommodation ordinances, andhad had a human relations commission since 1960with legal powers to enforce this.

In 1965 there was a debate on an open housing lawand while an ordinance was not passed there was apolicy statement accepted by the council of the citywhich empowered the human relations committeeto actively investigate all complaints on housing .. .a philosophy of open housing adopted by the gov-ernment officials of University City. This, I think,also encouraged black persons to move.'"

After a long history of racial discrimination, it isnot surprising that black homeseekers believe they arenot welcome in all-white areas and that they are morelikely to move to a community which shows willing-ness to protect their right to fair housing.

Therefore, any community which wishes to be open

182 Hunter v. Erickson, 393 U.S. 385 (1969). See also Lucas v.Colorado General Assembly 377 U.S. 713 (1964); West Virginia StateBoard of Education v. Barnette 319 U.S. 624 (1943).

'"3 402 U.S. at 137.i84 A. 3. Wilson, director, University City Human Relations Com-

mission, St. Louis Hearing at 316.

in a practical sense to prospective residents withoutregard to race must make some affirmative showing toconvince potential black home buyers that they aretruly welcome there and that they will have no moredifficulty in finding, purchasing, moving into, andenjoying a house there than they would in a predomi-nantly black neighborhood. A platitudinous municipalfair housing ordinance without the teeth necessary foreffective enforcement will do nothing to counteract themessage that blacks have received over the decadesthat they are not welcome in the municipality. Themunicipality must be prepared to use testing to assurethat whites and blacks are treated equally and to usesanctions against real estate agents who engage indiscriminatory practices.

Ordinances which are passed but not enforced areof little more effect than no laws at all. St. LouisCounty passed a fair housing ordinance in 1968. Itwas to be administered by a county human relationscommission which had no staff until one year later. Asof 1970 the Commission had not developed a form onwhich complaints could be filed.185 Baltimore County'sHuman Relations Commission had a total budget of$12,743 in 1970. Thomas Dawes, a member of thecommission and its former chairman, testified that thecommission has been unable to get adequate staff todo its legally required job since its founding in 1963.Mr. Dawes said the reason was that:

. . . the . . . people in power have always felt thatthe Commission would be a [too] troublesomeagency to give it adequate staff.186

The commission was unable to hire a black assistantbecause of the fear of officials that white extremistswould "make hay" of the appointment.187 George P.Laurent, director of a Baltimore fair housing groupsaid that, although the commission had good inten-tions, his organization found it so ineffective that thegroup no longer wasted time working with it.188

Witnesses from other suburban areas felt a similarlack of confidence in their ability to obtain redressunder similar housing ordinances. W. Fritz Hawkins,a black telephone company employee from Dayton,Ohio, noted a common problem: "Complaints take along time. . .I wanted a home then. So I couldn'twait." 189

St. Louis Hearing at 222."" Baltimore Hearing at 264.'"7 Id.mi Id. at 104.1" Washington Hearing at 17.

35

The Causes of Racial Polarization:The Federal Government

Federal influence has been particularly significantin the vast process of suburbanization which the coun-try has experienced in recent decades. It has, in fact,furthered the extent to which metropolitan growth hasled to racial separation. The Federal role has rangedfrom direct action which assured neighborhood segre-gation, through action for other purposes which pro-duced segregation as a side effect, to a policy ofinaction when actual discrimination occurred.

Federal Housing Programs

Since the 1930's the Federal Government has sup-ported a variety of programs to increase the supply ofhousing and to facilitate urban development or rede-velopment. Through these activities, the Federal Gov-ernment has played a primary role in contributing toour segregated housing patterns. President Nixon, inhis June 1971 statement on equal housing opportunity,emphasized the responsibility which the Federal Gov-ernment hears:

Policies which governed FHA mortgage insuranceactivities for more than a decade between the middlethirties and the late forties recognized and acceptedrestrictive covenants designed to maintain the racialhomogeneity of neighborhoods. . . . [The Federalurban renewal program] was designed to helpclear out blighted areas and rejuvenate urbanneighborhoods. All too often, it cleared out but didnot replace housing which, although substandard,was the only housing available to minorities. Thus,

I"" Statement by the President on Federal Policies Relative to EqualHousing Oppertunity, June 11, 1971, 2-3, printed in WashingtonHearing at 573-571. This statement, which had long been promised

:16

it typically left minorities even more ill-housed andcrowded than before.'"

The policy of the Federal Government falls intothree chronological phases.'" The first phase began inthe early 1930's when the Federal long-range involve,ment in housing and urban development first began,and lasted until approximately 1947, shortly after theSecond World War. It was during this period that theprincipal Federal agencies and programs, still with ustoday, were established. Among these agencies are theFederal Housing Administration with its mortgage in-surance programs and the Federal Home Loan BankBoard which provides assistance to our principalmortgage finance institutions, the savings and loanassociations. The Federal Government during this pe-riod was an active exponent of racial discriminationand racial segregation in housing.

The second phase, which began around 1950, canbe characterized as one of official neutrality but dis-criminatory impact. The third and present phase be-gan in November of 1962 with the issuance of Execu-tive Order 11063 prohibiting discrimination infederally-assisted housing. It is a period in whichFederal agencies have been subjected to increasinglystringent mandates for equal housing opportunity.After the Executive order came Title VI of the CivilRights Act of 1964, which prohibited discriminationin any federally-assisted programs or activities, in-cluding housing programs.192 Title VIII of the CivilRights Act of 1968 prohibited discrimination in most

and delayed, was issued just 3 days prior to the beginning of theCommission's Washington, D.C., hearing on Federal policy concerningequal housing opportunity.

1°' See Martin E. Sloane. Federal Policy and Equal Housing Oppor-tunity, in Washington Hearing at 730 and U.S. Commission on CivilRights, 19b1 Report: Housing.

12 §2000(d) (1964).

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of the Nation's housing,"3 and was bolstered by theSupreme Court's decision in Jones v. Mayer, whichprohibits all racial discrimination in any housing,public as well as private.'" Yet, as testimony andcensus data show, the commitment of the FederalGovernm,:nt to equal housing opportunity has beentoo recent and too limited to undo the deeply en-trenched racial segregation created by earlier policies.For example, changes in FHA policy from an activepolicy of racial segregation to "officially approving"open housing had little effect prior to the passage ofthe 1968 fair housing provisions. According to a 1968FHA survey, slightly more than 3 percent of all FHAsubdivision housing had gone to black families duringthe period between the issuance of the Executive orderon equal opportunity in housing and the end of 1967.The zeal with which Federal officials carried out poli-cies of racial discrimination in the early days ofFederal involvement has not been matched by similarenthusiasm for implementing equal housing.oc;portu-nity. This lack of zeal was documented by the Corn-mission's extensive study of the racial impact of theSection 235 program for home ownership for low-income families. The Commission concluded that:

Officially, FHA officials have taken little note ofracial residential patterns under the 235 program,but, unofficially, many FHA staff members haveexpressed awareness of the segregated and unequal235 buying pattern. No local FHA insuring office,however, has been willing to undertake affirmativeaction to prevent such a pattern from occurring inthe absence of specific directives from Washington.No such directives have been forthcoming. FHAstaff members in Washington also have been awareof the discriminatory 235 buyer patterns but haveallowed them to continue without instituting correc-tive or preventive measures.19"

Thus, the Commission found that the 235 programas it was operating to subsidize the purchase of hous-ing in 'four major metropolitan areas showed the verysame pattern that exists in the housing market gener-allynew housing provided mainly in the suburbsand purchased largely by white families, with existinghousing in the central cities purchased by minorityfamilies. This pattern recurs despite the fact that theusual economic rationale used to explain who can

1" 42 U.S.C. §§3601-31 (1970).194 392 U.S. 409 (1968)."I Home Ownership at 87.

38

afford to buy in a particular location has no applica-tion to the 235 program which was designed to equal-ize purchasing power for the low-income family.

The principal reason the Commission found for thisphenomenon in the 235 program was that the FederalHousing Administration, which administered the pro-gram, had virtually abdicated its responsibility. Itprovided little in the way of counseling to eligiblefamilies or to civic groups that sought to assist them.It had, in effect, turned over operation of the programto members of the private housing and home financeindustry. As the report stated in summary: "DespiteHUD's legal obligation to assume an affirmative rolein preventing discrimination. . .the agency continuesto play a passive role." 196

A similarly passive role, contributing even more tothe growth of racial polarization, has been played byHUD in the long-standing program of FHA mortgageinsuranceand in other, more specialized programsof mortgage insurance197 as well as in the morerecently established Section 236 program designed toprovide low- to moderate-income rental housing.198

Until 1971, HUD did not collect racial and ethnicdata on the beneficiaries of its programs. As yet, notabulations of existing data have been made on aregional or national basis. However, preliminary ana-lysis made of data collected in July 1971 shows thatthere is a high degree of segregation in HUD pro-grams. These findings were summarized in a Commis-sion publication in November 1971:

[T]he data shows that under HUD's basic homemortgage program, Section 203 (b) , only 3.5 per-cent of new homes are being purchased by blackfamilies. This is exactly the same percentage aswas found by FHA in its 1967 survey of FHA-insured subdivisions. The data for Section 235 pro-gram ... shows that all new 235 homes constructedin "blighted" areas are being purchased by blackfamilies, while 70 percent of new 235 homes con-

a" Id. at 87."7 The best known of these is the FHA-insured mortgage for the

purchase of one -to -four family housing, either new or existing. Section203(b) of the National Housing Act (Pub. L. No. 73-479: 12 U.S.C.§§1709, 1715(b) (1964), as amended (Supp. V, 1965-1969)). Otherinsurance programs operated by the Department of Housing andUrban Development include insured mortgages for rental and coopera-tive housing, §221(d)(3) National Housing Act, 12 U.S.C. §i'151(d)(3) (1964), as amended (Supp. V 1965-1969), rehabilitatedhousing, Section 221(h) (Pub. L. 89-754; 12 U.S.C. §1715(h)(1964), as amended (Supp. V, 1965-1969)) and housing for theelderly (Pub. L. No. 86-372, 73 Stat. 654, 667, 12 U.S.C. §1701q(1964), as amended (Supp. V, 1965-1969))

1'12 U.S.C. §1715z-1 (1964), as amended (Supp. V, 1965-1969).The program was suspended by HUD on Jan. 5, 1973, along with allother subsidized housing programs; see note 102 supra.

Percent

100

90

80

70

60

50

40

30

20

10

0

Homes boughtby black familiesin "blighted"areas

1

-

-

-

-

-

New homes purchased byblack families

MMIM IIMMIII

-

-

-

-

-

-

_

Homes boughtby white familiesoutside"blighted" areas

I-

-

-

-

-

-

-

Occupied bywhite nfm-minority families

Totallysegregatedby race andethnic group

1967 1971 Section 235 Homes Section 236 HomesSource: U.S. Commission on Civil Rights, The Federal Civil Rights Enforcement Effort: One Year Later, 44-45 (1971),

strutted outside "blighted" areas are being pur-chased by white non-minority families. The data forthe Section 236 program . . . shows that two-thirdsof the units are occupied by white non-minorityfamilies and that 120 out of 389 projects reporting(30 percent) are totally segregated by race andethnic group. Eighty projects are all white, 38 areall black, and two are all Spanish American. Of the269 projects remaining, only 100 are more than 15percent integrated. That is, 142 projects are morethan 85 percent white and 27 projects are more than85 percent black.'"

Two relatively new initiatives by HUD should benoted. These are "project selection criteria" and "af-firmative marketing" requirements.

New project selection criteria promulgated byHLTD200 for low- and moderate-income subsidized proj-ects are designed to increase housing opportunities forlower-income families and to assure that such housingis not all located in areas which already have highunemployment and a high minority concentration.Priority is given to funding projects located outside ofareas of minority concentration and near employmentopportunities. HUD hopes that the new criteria will

19, U.S. Commission on Civil Rights, The Federal Civil Rights En-lorcement Egort: One Year Later 44-45 (1971) (hereafter referredto as One Year Later).

"37 Fed. Keg. 203-09 (Jan. 7. 1972) 24 C.F.R. §200.700.

encourage the adoption of metropolitan plans for theprovision of low- and moderate-income housing.'

Affirmative marketing guidelines adopted by HUDlate in 1971 and applicable to all FHA programsrequire developers of new FHA subdivisions, multi-family projects, and mobile home parks to adopt af-firmative programs to assure marketing of housing toall persons.202 Developers must submit an affirmativemarketing plan indicating how they will carry out anaffirmative program which "shall typically involvepublicizing to minority persons the availability ofhousing opportunities through the type of media cus-tomarily utilized by the applicant, including minoritypublications or other minority outlets which are avail-able in the housing market area." Advertising for theproject must include either the HUD equal housingopportunity logo or slogan;208 any advertising depict-ing persons must show persons of both majority andminority races. The applicant is also required to main-tain a nondiscriminatory hiring policy by recruitingfrom minority and majority races for staff engaged inthe sale or rental of properties.

While these regulations in many respects are a newdeparture for HUD in its enforcement of equal hous-

10' 37 Fed. Reg. 204.R0224 C.F.R. § 200.000-200.640. 37 Fed. Keg. 75 (Jan. 5. 1972)." These are contained in HUD's Advertising Guidelines for Fair

Housing, 36 Fed. Reg. 9266-67 (May 21, 1971).

39

ing opportunities, they were not made as strong asthey might have been. Their coverage is limited tofuture housing provided under FHA programs, leav-ing unaffected the several hundred thousand unitswhich have already been constructed but which arestill covered by FHA mortgage insurance. Further-more, the regulations establish no mechanism to guar-antee that the affirmative marketing plans will actuallybe carried out.

It is safe to conclude that Federal housing pro-grams, now administered by the Department of Hous-ing and Urban Development, are no longer an activestimulus to the creation of segregated residential pat-ternsi. Nevertheless, it is apparent that HUD's actionsto date have been wholly inadequate to counteract thepolarization brought on by earlier administration ofthe programs, and even less effective against the tideof polarization produced by all the causes discussed inpreceding and subsequent sections of this report. Tothe extent that HUD's recent initiatives can proveeffective, they must depend on three factors: the loca-tion of federally-assisted housing in places which willfurther minority housing opportunities, the strict en-forcement of affirmative marketing requirements toassure that such housing in fact becomes available tominority centers and purchasers, and the continuationof programs which improve the market position offamilies who would otherwise be financially unable tofind housing outside of ghetto neighborhoods.204

Remedying Housing Discrimination: HUDand the Justice Department

The Federal Government has authority to prohibithousing discrimination under a range of laws whichrequire that almost all housing, both federally-assistedand private, must be made available on an equal op-portunity basis.

Executive Order 11063,205 issued in November1962, and Title VI of the Civil Rights Act of 1964 206prohibit discrimination in federally-assisted housing.Title VIII of the Civil Rights Act of 1968 207 extendsthat prohibition to private housing.

These three provisions carry with them a variety ofenforcement mechanisms. Executive Order 11063 pro-vides for the following remedies to be applied in cases

a"' For a recent study of the 1. ederal housing assistance programs.see Aaron, supra mite 161, at 127-144.

Fed Reg. 11327 ( Nov. 1962).a"' 42 U.S.C. 2000(d) (1964).2°742 U.S.C. §§3601-31 (1970).

I0

where discrimination is found and conciliation andpersuasion fail to bring about compliance: cancella-tion or termination of agreements or contracts withoffenders, refusal to approve a lending institution as abeneficiary under any program which is affected bythe order, and revocation of such approval if previ-ously granted.20' Under Title VI, a finding of discrim-ination can result in suspension or termination ofFederal financial assistance, or refusal to grant or tocontinue such assistance.2"

Compliance with Title VIII can he brought aboutthrough conciliation by HUD,21° through action by aState or local enforcement agency,21' or through pri-vate litigation. 'Where there are patterns of discrimina-tory practices, or issues of general public importance,compliance can be enforced through lawsuits broughtby the Attorney General.212 Monetary damages may beawarded under Title VIII.213

The Departments of Justice and Housing and UrbanDevelopment have primary responsibility for enforc-ing these fair housing provisions. The Commission hasfound that neither Department has enforced these lawsvigorously or effectively.

The Department of Justice is assigned a key role inthe enforcement of Title VIII. In The Federal CivilRights Enforcement Effort: Seven. Months Later, theCommission found that the Department was attempt-ing to take effective action in this area but was ham-pered by lack ofergturces.214 The housing section ofthe Civil Rights Division which has responsibility forTitle VIII has approximately 25 lawyers to enforcethe law nationwide. With so few lawyers, the Depart-ment is sharply limited in its task of discovering andeliminating patterns and practices of housing discrimi-nation across the country.2"

2"" 42 Fed, Reg. 11527, Part III." 42 U.S.C. 2000 ((l) ( 1) (1964).T042 U.S.C. 3609 (1968).221 42 U.S.C. 3610(c) (1968).21242 U.S.C. 3613 (196").2142 U.S.C. 3612(c) (1968). A victim of discrimination has two

separate courses of action under Title VIII of the Civil Rights Act of1968. He may file a complaint with HUD and attempt to have thematter settled by "informal methods of conference, conciliation, andpersuasion." Section 810) a) 42 U.S.C. 3610(a). If these methodsare not successful, the complainant may file an action in Federalcourt. Section 810(d) 12 !:.S.C. 3610(11). Secondly, the 1968 actpermits an individual to file an action for damages without first com.plaining to HUD. Section 812 42 U.S.C. 3612. These two remedieshave been interpreted as being complementary, and may be pursuedsimultaneously. Johnson v. Decker 333 F. Supp. 88 (N.D. Cal. 1971).

2" Federal Civil Rights Enforcement Effort: Seven Months Later 37(1971).

an In 1973, however, the division initiated 53 lawsuits, as opposedto 13 in 1972.

Donald Miller, associate director of a Baltimore fairhousing group, charged in response to a questionfrom Commission counsel that the Department's re-sponse to complaints is also frustrating:

Mr. Powell. Do you feel the Justice Department hasbeen effective in moving against housing discrimi-nation in the Baltimore area?

Mr. Miller. No, definitely not. I have had to makepersonal trips to Washington to get them to evengive me a little bit of information. I made repeatedtelephone calls on how they file correspondence, andvet I get very wishy-washy answers. Well, to thepoint where originally first the evidence is sub-mitted. They said: "Oh. yes, good case. We willtake action immediately." It just means a formletter going. It takes a monthit took one particu-lar case a whole month to get out of our local U.S.attornev's office.

Once it got on its way, it was lost at the Departmentof Justice in Washington. Then it took several moremonths trying to get any information out of them.21"

The Department has also been slow to challenge theexclusionary use of land use controls, one of theprimary causes of patterns of suburban racial isola-tion. Such a challenge, if successful, could assist inresolving the housing problems of countless individu-als. In June 1971 the Justice Department filed its firstsuit against exclusionary land use practices.217 It wasfiled on the day the U.S. Commission on Civil Rightsopened public hearings in Washington, D.C., to exam-ine the role of the Federal Government in the suburbs.That case challenged the rezoning by Black Jack,Missouri, officials of a certain tract of land frommultiple to single-family dwellings on the grounds thatthe area was rezoned to exclude a proposed federally-subsidized housing project which would be open tominority groups:2"

At the Washington ,hearings, Attorney GeneralMitchell was questioned about the Department's actionin the Black Jack case and asked if fur.;- actionswould he filed in similar situations and ir.

Baltimore Hearing at 216.2'7 United States v. City of Black Jack, Civil No. 71C-372(1)

F. D. N1o.).ho Federal Black Jack case was filed after much delay in

June 1971. lhe lustice Department had the matter pending formonths while considering whether to fife and in the interim a privateaetion was filed in Jan. 1971. The private action was dismissed bythe trial court, but the decision was reversed on appeal and the casewas ordered 10 trial. Park View Heights Corp. v. City of Black Jack,147 F. 2,1 1208 (8th Cir. 19721, reversing 333 F. Supp. 899 (E.D. Mo.1971). Both the Federal and private cases are presently awaiting trial.

where the racially exclusionary purpose of rezoningwas not as clearcut as in Black Jack. The AttorneyGeneral replied:

Obviously, each case will have to be looked uponand examined on its own standing or merits ordemerits. And this, of course, we propose to do.You can't generalize in that area.

But I would say, as the President's statement hassaid, that where there is any vestige at all of racialdiscrimination, we ran move against it regardlessof the other factors inyolved.2'°

Mayor Carl B. Stokes of Cleveland gave anotherview of the Department's litigation on land use con-trols at the Commission's Washington hearing:

I am not at all impressed by the law suit against theBlack Jack, Missouri, situation. I'm not impressed.I just don't know how much more blatant, howflagrant a situation could be, than the Black Jack.Missouri. case. My goodness, if a case such as thatin which you literally almost have working draw-ings on a project, and then a community movesopenly, deliberately, to rezone to stop it, well, mygoodness, if a Government couldn't move underthose kind of circumstances, then in fact there isno chance at all. It is not [action in the face of]this outrageously flagrant violation of people's rightsthat would assure me about the Administration'spolicy in this regard.22°

As of January 1, 1974, the Department had initi-ated only one other suit against exclusionary land usepractices.221

Neither has the Department of Housing and UrbanDevelopment adequately enforced its fair housing re-sponsibilities.222 In. November 1971 the Commissionfound that:

HUD continues to have a staff grossly inadequateto deal with the complaints it receives under TitleVIII of the Civil Rights Act of 1968, Title VI ofthe Civil Rights Act of 1961, and Executive Order11063. A total field staff of 42 people handles thefull volume of Title VIII complaints for the entirecountry. HUD has stated that the average timetaken to process a complaint is between five andsix months. This Commission, however, in referringcomplaints to HUD, has noted at least one instance

2'9 Washington Hearing at 366.Id. at 219.

22' United States v. City of Parma, Civil No. 439 (N.D.Ohie, 1973).122 U.S. Commission on Civil Rights, The Federal Civil Rights En.

forcemeat Effort: A Reassessment 98-100 (1973) (hereafter cited asReassessment),

41

in which nearly a year passed from the date of theoriginal fiiing of a complaint to its conciliation.223

Complaint handling did not improve in fiscal year1972. The average time for processing a complaintwas still 51:, months. HUD referred 1,057 complaintsto State and local fair housing agencies during thefiscal year.224 investigations were completed in only164 of these cases.225 Of the 1,474 complaints whichHUD handled itself, at least 238 were still pending atthe end of the fiscal year.-2"

Until late 1071, HUD's Title VIII activities con-sisted almost exclusively of handling individual com-plaints of discrimination. This, in the Commission'sview, makes it unlikely that significant changes in thepolicies and practices of the housing industry can bebrought about in the reasonably foreseeable future.Neither is the growing trend toward racial residentialsegregation likely to be reversed, although Title VIIgives HUD broad authority for taking strong meas-ures to promote fair housing. Two significant provi-sions in the statute are 808(d) which provides that,

All executive departments and agencies shall ad-minister their programs and activities relating tohousing and urban development in a manneraffirmatively to further the purpose of this title,and shall cooperate with the Secretary to furthersuch purposes.227

and 808(d) (5) which reads,

[The Secretary of Housing and Urban Develop-ment shall] administer the programs and activitiesrelating to housing and urban development in amanner affirmatively to further the policies of thistitle. 23

The Department has done little, as coordinator ofFederal agency fair housing efforts, to assure a coop-erative effort among Federal agencies subject to Sec-tion 808(d).229 HUD's efforts have consisted mainlyof a few formal coordinating activities.230 HUD wasalso instrumental in devising uniform site selection

One Year Later, supra note 199, at 41.Reassessment at Ill. Title VIII require, Hill to refor corn.

plaints to States with fair housing laws "substantially equivalent" toTitle VIII. In August 1972 HUD published new regulations for therecognition of substantially equivalent laws. 37 Fed. Reg. 16540(Aug. 1972).

22' Id.4" Reassessment at 112.

12 36081 el.228 42 U.S.C. 3608(d) (5).ran Id.

Reassessment at'121.

42

criteria for location of Federal facilities.23'Under Section 808(d) (51,232 HUD has the author-

ity to tid:e strong measures to promote fair housingthrough administration of its own programs. Recently-adopted project selection criteria and affirmative mar-keting guidelines, discussed above, are a step in thisdirection. HUD has mentioned the necessity of con-ducting "community investigations to identify patternsof housing discrimination," but its plans to meet thisneed have not progressed beyond the discussionstage.233

Remedying Housing Discrimination:Financial Regulatory Agencies

There are four Federal agencies (Federal HomeLoan Bank Board, Comptroller of the Currency, Fed-eral Reserve Board, and Federal Deposit InsuranceCorporation) which supervise and benefit lending in-stitutions responsible for most of the conventionalfinancing of housing. The lending institutions whichthey supervise are savings and loan associations, com-mercial banks, and mutual savings banks. The Federalagencies act as regulatory bodies rather than as ad-ministrators of programs, but their policies have had arole in perpetuating racial polarization. Although re-quired by Title VIII to take affirmative action "tofurther the purposes of this title" 2 31 the regulatoryagencies have adopted a more passive policy. Theymight have, for example, required lenders to includenondiscrimination clauses in mortgage contracts withbuilders and developers, a requirement which wouldprovide an extra-statutory cause of action. However,the agencies have done little to enforce the Title VIIIprovisions beyond informing their member institutionsof their existence and of possible sanctions for viola-til,t1S.235

Only the Federal Home Loan Bank Board has pub-lished regulations to enforce the nondiscriminationrequirements of Title VIII.2" The FDIC, the Comp-troller of the Currency, and the Federal Reserve

281 Sec section beginning on p.47. below.z" 42 U.S.C. 3608(d) (5) .

Commission on Civil Rights' HUD questionnaire (1972) (inUSCCR files).

2-14 See 11.S. Commission on Civil Rights, 1961 Report: Housing;also, The Federal Civil Rights Enforcement Effort 165 et seq. (1971).

='"Sertion 801114) of th Foir 'lousing Low provides: -All executivedepartments and agencies shall administer their programs and ac-tivities relating to housing and urban development in a manneraffirmatively to further the purposes of this title and shall cooperatewith the Secretary to further such purposes. 42 U.S.C. §3608(c).

2:19 37 Fed. Reg. 8436 (April 27, 1973), 12 C.F.R. Part 528.

Board have required the use of an equal housing logoin advertising and the posting in bank lobbies of anotice of nondiscrimination in lending, but these agen-cies have adopted no substantive regulations to enddiscrimination.237 While the FHLBB regulations pro-hibit discrimination in lending and in the acceptanceof loan applications by member institutions, the regu-lations do not provide for the collection of data byrace on loans and loan applications. Such data collec-tion is the only method- -other than the complaintprocesswhich would allow the FHLBB to determinewhether a member institution is in compliance withthe regulations. The regulations also fail to prohibitlenders from unduly discounting certain kinds of in-come in determining whether a family will be granteda mortgage loan. Lenders are free, for example, toexclude all or part of a working wife's income andincome from overtime and part-time jobs. In addition,lenders can reject potential borrowers because of suchthings as isolated credit difficulties. The use by lend-ers of standards of this type has a substantial adverseeffect on the ability of minority and low-income fami-lies to obtain credit for the purchase of a house.232

Federal Assistance: In GeneralMany different Federal agencies provide financial

assistance for community development. Hospitals,schools. roads, sewersall are provided with the helpof Federal dollars. Title VI of the Civil Rights Act of1961:2" prohibits discrimination in any program oractivity receiving Federal financial assistance, ongrounds of race, color. or national origin. Thus HUD,the Department of Transportation, the Department ofHealth, Education, and Welfare, the EnvironmentalProtection Agency, and other Federal departmentsand agencies all have the duty to enforce Title VIwith respect to their programs.

The Department of Justice is charged with coordi-toting Federal enforcement of Title VI of the CivilRights Act of 1964, but it has exercised little leader.ship in this area. The Attorney General himself ap-peared to take a narrow view of the Department's

=r On Sept. 20, 1972, the Federal Deposit Insurance Corporationpublished proposed regulations on fair housing lending practices. 37Fed. Reg. 19385. On Dec. 29, 1971, the Comptroller of the Currencyand the Federal Reserve Systemas well as FHLBB and FDICpublished policy statements on nondiscrimination requirements. 36Fed. Reg. 25167-68.

'4"' See testimony of Daniel W. Spaulding, chairman, National PublicAffairs Committee, National Association of Real Estat.: Brokers,Washington Hearing at 120.

23° 42 U.S.C. §2000(d).

coordinating function when questioned at the Wash-ington hearing.

Chairman Hesburgh. . . . Do you think of anyway we might get a common approach across toall the government agencies on Title VI?

Attorney General Mitchell. I would not believe so,Father, other than the fact that the law requires it,and of course the contracts and other documentsrequire it, I think it is a matter of enforcement andpolicing by the different Departments and Agenciesthat do business in this field.21°

A great number of Federal assistance programsbenefit suburban communities by providing assistancefor such things as highways, parks, education, andsewage treatment. Coordinated enforcement of TitleVI guarantees would help assure equal access for allto the suburbs. Although uniform amendments to theTitle VI regulations of 20 Federal agencies were pub-lished in the Federal Register in December 1971,24'these amendments, as of September 1972, had notbeen formally adopted.

Thus, agencies now operate under separate Title VIregulations and often under differing interpretationsof the meaning of Title VI. Furthermore, Title VIenforcement by individual agencies tends to ignore thebroad impact which the totality of federally-fundedprograms may have on the development of a metropli-tan area. A highway funded through the Departmentof Transportation, water and sewer grants from HUD,and a host of other federally-funded programs maycombine to play a major role in the development of asuburban community. If minorities are excluded fromliving in that community, .they may be denied thebenefits of these federally-funded programs.

The coordination function of the Justice Depart-ment is hindered, furthermore, by the fact that, as ofSeptember 1972, the Title VI section had only nineattorneys,242 three fewer than it had in November1971.

HUD's Title VI enforcement also has been minimal.Not until 1971 did the Department even have writteninstructions for handling Title VI complaints and con-ducting compliance reviews of Title VI programs inoperation. Until 1971, reviews were made only when acomplaint of discrimination was received. In fiscal

24^ Washington Hearing at 374."' 36 Fed. Reg. See index at 23000 (Dec. 1971).2'5 Memorandum from David L. Norman. Assistant Attorney Gen-

eral, Civil Rights Division, to Theodore M. Hesburgh, Chairman, U.S.Commission on Civil Rights. Sept. 15, 1972.

43

year 1972 HUD conducted 110 preaward and 186postaward onsite reviews. There are, however, about12.000 local government agencies funded by HUD, aswell as uncounted numbers of private builders, devel-opers, and nonprofit sponsors subject to Title VI re-quirements.'" To date, HUD has not terminated anyfunds because of discrimination in violation of TitleAT I244

Federal Assistance: The Impact of FederalHighway Grants

The annual expenditures of the Federal aid highwayprogramS5,425 million was authorized in 1971246have a great impact on housing opportunities andresidential patterns. Highways may be more than mereaccess routes. They may displace families from theirhomes, lead to a movement of job opportunities and aresulting change in residential patterns, and separateone area of a city from another.

As the Douglas Commission stated in its 1968 re-port:

Probably there is no more important single deter-minant of the timing and location of urban develop-ment than highways. Highways in effect "create"urban land where none existed before by extendingthe commuting distance from existing cities. Thelow-density pattern found in most of the Nation'ssurburhan areas would never have been possiblewithout the effect of high-speed highways in reducingthe importance of compact urban development.246

Across the country, the Douglas Commission foundevidence that Federal funds were being expended forhighways without sufficient attention to the effect ofthese highways on residential patterns. The Commis-sion report summarized the situation:

[I]n the zeal of engineers, highway planners, andadministrators to get on with the important job ofaccommodating traffic needs, social and estheticvalues have sometimes been shockingly overlooked.The routing of highways through existing neighbor-hoods, unless carefully planned with a range ofgoals and values in mind, can mean the quickdemise of neighborhood character and viability andlasting bitterness on the part of those affected.

243 Commission on Civil Rights questionnaire, directed to HUD,July 5, 1972.

344 Id.Dep`t of Transportation, Federal Laws. Regulations and

Material Relating to Federal Highway Administration 11-91 (1970)2" Douglas Commission Report at 231.

44

F urthermore, it can effectively separate variousparts of the city from other parts, and the claimhas been made in various cities that highwayshave been used to separate Negro and Whiteneighborhoods.2'7

Robert Segal, chairman of the Civil Rights Commis-sion's Massachusetts State Advisory Committee, com-mented on the effect of Boston's outer beltway onresidential patterns in th Boston area:

Well, we have had a tremendous amount of indus-try come in and a lot of residential development.We have had a great deal of movement of manu-facturing units from the city of Boston out intothe suburban areas . . .

[13] y and large over the years there was a tremen-dous growth in industry out there.248

A survey of 309 Boston firms, conducted by the Bos-ton Economic Development and Industrial Commis-sion, found that 40 percent either had decided to moveor were seriously considering it. This represented apotential loss to Boston of up to 11,500 manufacturingjobs-40 percent. that is, of all jobs held by minori-ties and paying "lore than $5,000 a year. As for thenumber of minorities living in the suburbs whichdeveloped along the outer beltway, Mr. Segal said: "Ifyou find minority group members, we would like verymuch to know about them." 249

In Baltimore, where approximately $13 million ofFederal highway money was spent in 1971, city plan-ner Yale Rabin discussed the effect of these expendi-tures on development patterns:

And this tendency has often caused us to overlookthe far more significant and far more long-rangeeffect of highways which are to generate a greatchange in industrial and commercial uses, andmore specifically the kind of decentralization ofindustry in which Baltimore County has been noexception. So that during 1969, for example, some35 industrial firms, I believe, moved from BaltimoreCity and relocated in the county.

The decentralization of these firms has a markedeffect on employment opportunities in the city andwhen that effect is combined with the absence ofhousing opportunities in the areas to which those

"7 Id."' Washington Hearing at 104.2451d.

plants relocate, then there is a very substantial andvery far-reaching effect on black residents. 25°

Highway construction has had the further effect ofdisplacing minorities. Urban freeways have cutthrough ghettos to facilitate white suburbanites' travelfrom suburban homes to central city jobs. And thenew roads also have uprooted suburban minority com-munities, forcing minority suburbanites to relocate inthe central cit y.251

These problems were pointed out in further testi-mony by city plan aer Rabin. Using the BaltimoreCounty guideplan, he described the effect of proposedfreeways on two black communities, Edgemere andTurners Station:

rEdgemerel is very small. But a new freeway isproposed to come down and sweep directly throughthe area, which is now a low income black com-munity. In Turners Station a whole network offreeways, three of them apparently, will completelyisolate the area, although it is relatively well iso-lated now . . . the construction of a new freewayalong the shoreline on the east and the proposedconstruction of a new crossing . . . would wipe outthe beach at the southern end of the Turners Sta-tion community.252

August Schofer, regional administrator of the Fed-eral Highway Administration, was asked about theeffect of Department of Transportation regulationswhich prohibit discrimination in the location or de-sign of a highway: 253

NIr. Glickstein. One of the purposes of these regula-tions is to guarantee in planning these highways

25° Baltimore Hearing at 281.25' Commission research for the Baltimore hearing also found that

there was no requirement that those displaced by Federal-aid high-ways he relocated in the same community from which they were dis-placed. or that there be relocation housing outside of areas of minorityconcentration. The Department of Transportation and the FederalHighway Administration did not require that State highway depart.ments even keep track of racial composition of neighborhoods whererelocation housing was located. During the past few years there havebeen legislative and regulatory attempts to deal with the problem ofminority displacement. The Uniform Relocation Assistance and RealProperty Acquisition Policies Act of 1970 provides that no personmay be displaced by a federally.assisted project unless adequate re-placement housing is available to him. Section 206, 42 U.S.C. §4626(b), 84 Stat. 1898. See HUD, Last Resort Housing Replacement byDisplacing Agency Under the Uniform Relocation Assistance andReal Property Acquisition Policies Act of 1970, 24 CFR §§43.1-43.16,37 Fed. Reg. 3621 (Feb. 18, 1972). A proposed amendment to FHWAPolicy and Procedure Memorandum (PPM) 20-8 would require Statehighway departments to consider a proposed highway's impact onminority community cohesion. 37 Fed. Reg. 8398 (April 26, 1972).

42 Transcript of Open Meeting of the Maryland State Advisory Com-mittee to the U.S. Commission on Civil Rights 14 (Jan. 5, 1971).

ra 35 Fed. Reg. 10080-85 (June 18, 1970).

the project doesn't unfairly impinge upon any racialgroup; is that correct?

Mr. Schofer. It doesn't say that in those words.We don't locate a highway purposely to move aparticular group. white, black. Polish, Norwegian,or what-have-you. We don't deliberately locate itto do these things. There is no discrimination if weavoid selecting a location that takes out a grouppurposely.

There is nothing in there that says we may not dothese things. The facts show that our locations upto date have been predominantly white areas.

Mr. Glickstein. One other provision of the regula-tions provides that the State shall not locate, design,or construct a highway in such a manner as todeny reasonable access to and use thereof to anypersons on the basis of race, color, or nationalorigin. What does that provision mean?

Mr. Schofer. Well, our interchanges are free toanybody that has a car. Wherever there is anentrance, color doesn't determine his right to usethat.

Mr. Glickstein. You think that provision meansthat you just can't keep people off the highwaysbecause of race, color; religion, or national origin?

Mr. Schofer. Well, I would so interpret. Thefacilities that we are building on these roads forrest areas, there is no discrimination there. Thereis no white or black facilities on there. It's com-pletely integrated facilities. What one has, theother has.254

Mr. Schofer's testimony ultimately prompted Commis.sion Chairman Hesburgh to state:

I think the trouble with you is that you are think-ing about roads as roads. I am thinking about roadsas serving human beings who have certain rightsin a community in a Nation.255

At the Washington hearing, the Commission furtherexpressed its concern about DOT's policies to Trans-portation Secretary John Volpe. Secretary Volpe sum-marized the broader implications of highways andother forms of transportation for housing patterns:

Beyond the service aspect of transportation, werecognize that transportation development is amajor factor in residential patterns and community

26' Baltimore Hearing at 376." Id. at 379.

45

development. The accessibility of effective trans-portation has a profound effect on communitygrowth and demographic alignment. This is a re-sponsibility that we do not take lightly.

Transportation planning in a Nation of over 200million people must be related to more than simplygetting from point A to point B. Indeed, the lawrequires that transportation planning he consistentwith comprehensive planning."'''

Secretary Volpe was then questioned about DOT'sadherence to Federal laws requiring nondiscrimina-tion in federally-funded programs and affirmative ac-tion by Federal executive agencies to promote fairhousing. He referred the question to Federal HighwayAdministrator Frank Turner:

Mr. Turner. I don't believe that I can think of aparticular project that would meet the specificationsthat you have set out. All of our projects, weBelieve, contribute generally to transportation needs,open to all users, regardless of location, economicmeans, race, color, creed, religion or anything else.

Secretary Volpe. How about the housing, are thereany projects . . . even a hypothetical one, as Mr.Glickstein said, that you think of where we mightapply the kind of analysis that we have talkedabout, that would enable us to deny funds if wefelt that this was required in order to permit thefair and decent housing that we intend for themto provide.

Mr. Turner. I think that it might only be reachedthrough the provision that governs the relocationof people displaced from a highway, in which therequirement is that before the project can be ap-proved, a State must submit to us a relocation planwhich we approve. This must include provision forfair housing.'`"

Mr. Turner failed to note any obligation on the partof the Department of Transportation to withhold Fed-eral funds in cases where the benefits of highwayprograms would not be available on a nondiscrimina-tory basis, or where highway programs would contrib-ute to forced concentration of minorities.-'`

Despite this alleged lack of authority to take into274 Washington Hearing at 330.2G7 Id. at 337.

Title VI of the Civil Rights Act of 1964 prohibits discriminationin programs or activities receiving various types of Federal funds.Section 808(d) of the 1968 Civil Rights Act requires Federal execu-tive agencies fricing programs relating to housing or urban develop-ment to administer those programs to affirmatively promote fairhousing.

46

account the impact of transportation programs, De-partment of Transportation officials indicated to theCommission that DOT planned to revise its policies totake housing availability into account. Mr. Volpe'sprepared statement, submitted for the record at theWashington hearing, indicated that DOT was consid-ering requiring applicants for significant projects inmetropolitan areas to provide:

a specific analysis as to whether a proposed projectwould have a positive impact on any existing pat-terns of racial concentration in the area involved. . . For those projects having a positive impact,there would be a followup evaluation of the extentto which the project succeeded in encouraging thegoal of fair housing. Both steps would include thecollection and analysis of racial-ethnic data per-tinent to the area involved.'"

Proposed Highway Administration guidelines, is-

sued in April 1972,260 represent a step in this direc-tion. The guidelines provide for consideration of ad-verse economic, social, environmental, and engineeringeffects of a proposed highway, but fall far short ofrequiring the detailed analysis, breakdown of housingpatterns. and extensive data collection which Secretary

Volpe stated was under consideration.261

Federal Contractors and Housing Availability

We have seen that when large employers move theirinstallations to suburbia this may sharply curtail ac-cess by minority persons to job opportunities with theemployer.2(2 This section reviews enforcement of therequirement, applicable to Federal contractors, thataffirmative action be taken to avoid the discriminatoryconsequences of suburban facility location by an em-ployer.

Under Executive Order 11246, and OFCC Revised

The implications of Title VI and Title VIII for Federafaid highwayprograms have been a continuing controversy between the Commis.sion and the Federal Highway Administration. There is no disagree-ment about the applicability of these provisions to highway programs.Despite apparently far reaching DOT regulations, however, FHWAofficials, as evidenced by the quoted testimony, have taken the posi-tion that the law prohibits only intentional discrimination in suchareas as who is allowed to drive on a highway and in relocationhousing. 'I he Commission has argued that, beyond this, Title VI andTitle VIII prohibit all discrimination, intentional and unintentional,in locating highways and displacing and relocating individuals. See,e.g., Staff of U.S. Commission on Civil Rights, The Civil Rightsplications of Suburban Freeway Construction, in Baltimote Hearingat 807, and August Schofer, Regional Federal Highway Administrator,Clarification and Rebuttal of Stag Report, id. at 824.

Id., exhibit 40 at 955.37 Fed. Reg. 8398 (1972).These guidelines are discussed further in ch. 4.

'12 Sec ch. 3, 11.24. above.

Order No. 4,26" Federal contractors are required toanalyze deficiencies in employment, identify the rea-sons for such deficiencies, and develop programs tocorrect them. At the Washington hearing, the Commis-sion inquired about the corrective action which theOffice of Federal Contract Compliance, which adminis-ters these provisions, required of Federal contractorswhen lack of suitable housing was a barrier to minor-ity employment. Gerald Paley, Associate Solicitor forLabor Relations and Civil Rights, Department of La-bor, testified that OFCC did not even attempt to keeptrack of the location and movement of contractors inorder to promote site selection in areas where housingwas available and to encourage affirmative action toovercome housing barriers. He testified that he didnot know of an instance "where OFCC was fore-warned that a Government contractor was moving toan area where housing would be a problem for minor-ities." 264

Arthur A. Fletcher, Assistant Secretary of Labor forWork Place Standards, added:

. if let's say. a defense contractor were changingcommunities, it would be the Defense Department'scompliance agent [who] would know that first and,in fact, unless we devised a waywhich we will bedoingthat will require that he puts us on noticethat the company has moved, there's a real chancethat information would never get to us.2"5

Mr. Fletcher further testified that, even if OFCC didknow that a contractor was about to relocate in arestrictive area, OFCC does not have the right toimpose upon the contractor a requirement that it takeaffirmative action in the housing area as a conditionof doing business with the government 266

Section 808(d) of the Civil Rights Act of 1968requires executive avencles having programs relatingto housing and urban development to take affirmativeaction to promote fair housing. Because of the rela-tionship between employment opportunities and hous-ing, this provision appears applicable to the Depart-ment of Labor and therefore to OFCC.

Under questioning, Mr. Fletcher stated that hewould have no problem with a directive that all Gov-ernment contracting agencies henceforth consider theavailability of low- and moderate-income housing inthe area of a particular company and give preference

`"3 41 C.F.R. 60-62.Washington Hearing at 194.Id. at 195.

we Id. at 192.

to those companies located in areas where low- andmoderate-income housing is available. He did, how-ever, indicate that lawyers at the Department of Laborhad doubts as to whether Executive Order 11246provides authority for the issuance of such a directive.No such directive has been issued.267 The problem ofcorporate relocation to restrictive suburbs continuesunabated.

Senator Abraham Ribicoff, in response to this situa-tion, introduced legislation which would impose uponFederal contractors an obligation to consider theavailability of low-income housing prior to selecting asite. Legislation introduced in 1970 and again in1971S. 1282, the proposed Government FacilitiesLocation Act of 1971would have tied the location ofGovernment and Government contractor facilities tothe provision of low- and moderate-income housing.268The bill would have prohibited Federal agencies fromlocating facilities in communities which failed to de-velop an acceptable plan for the provision of an ade-quate supply of housing for lower- and middle-incomeemployees. The bill would also have required Federalcontractors and federally-assisted State agencies toobtain such plans from communities in which theyintended to loc- te. Violations by Federal contractorswould result in the termination of their contracts. Thelegislation would have provided for financial assist-pnce to reimburse communities for the expense ofdeveloping plans and for payments to local educa-tional agencies in those communities. Thus, communi-ties would be able to meet the additional costs ofeducation caused by the increase in the number ofchildren living in lower- and moderate-income housingin the community.

The Federal Government as EmployerJust as the location of a facility by a Federal

contractor has an impact on the employment opportun-ities of people living in different parts of the metropol-itan area and the pattern of metropolitan growth gen-erally, so does the location decision of the FederalGovernment itself as employer. The Federal Gavern-ment is a major employer in many metropolitan areasand the dominant employer in one, the. Washington,D.C., area. Unlike private Employers, however, theFederal Government in its location decision need notbe so constrained by market considerations, but can

2'n Id. at 208-09.2" The bill, which was vehemently opposed by both southern con-

servatives and northern liberals in the Congress, has not been reintraduced.

47

choose to take into account the effect of its decisionon, for example. its minority work force or potentialminority work force.

In a 1970 report, the Commission found that al-though "equal employment opportunity and equalhousing opportunity are cornerstones of national pol-icy, the Federal Government has been inadequatelyconcerned with the impact of its site selection policyin achieving these related goals." 269

In PM the General Services Administration (GSA)had adopted policies designed to deal with the prob-lems of lower-income and minority Federal employees.Under these policies GSA was to avoid locations lack-ing adequate housing within reasonable proximity forlow - and middle-income employees, and locations notreadily accessible from the nearest urban center. TheCommission found, however, that these policies werenot implemented and GSA continued to locate installa-tions in areas which did not have an adequate housingsupply.

In February 1970, against a background of persist-ent criticism of GSA's site selection policies, PresidentNixon issued Executive Order 11512, establishing pol-icies which GSA must follow in acquiring and assign-ing office space.'" Among the factors prescribed bythe Executive order for GSA's consideration are:

11 I the impact a selection will have on improvingsocial and economic conditions in the area, and

121 the availability of adequate low and moderateincome housing, and adequate access fromother areas of the urban center.27'

In evaluating these factors, GSA is directed by theorder to consult with HUD and other relevant agen-cies.272 Civil rights groups, a,: well as the Commission,criticized the order for not specifically requiring thathousing be available on a nondiscriminatory basis inareas slated for Federal facilities.273

A May 1970 open meeting of the Commission'sDistrict of Columbia Advisory Committee further em-phasized the shortcomings of GSA's program. Employ-ees of several Federal agencies which planned to relo-cate testified about the inadequate previsions whichwere made for housing in the new location and the

U.S. Commission on Civil Rights, Federal Installations nd EqualHousing Opportunity 21 (1970).

=1°35 Fed. Reg. 3979 (1970).271 33 Fed. Reg. 3979, Sec. 2.gri Id.'13 U.S. Commission on Civil Rights, Federal Civil Rights Enforce.

ment Effort, ch. VIII, part 2(E).

48

responsibility of the Federal Government toward thecity and its residents. William Jenkins, an employee ofthe Department of Health, Education, and Welfare,described his feelings concerning the pending move ofHEW from Washington, to Rockville, Maryland:

Well, I feel that these moves are in a sense a viola-tion of my civil rights in that if I am an employeeof the Federal Government in a so-called humanrights agency_, so-called social action agency likeHEW which supposedly is the watchdog of thenation's social conscience, and I am a participantto or an observer of my agency's indiscriminate,inconsiderate. ill-planned moves to the suburbswhich have an adverse effect not only on the em-ployees' well being but to me have no demonstrablegood effect on the areas into which they are moving,I think that's a violation of my civil rights. 7'

In a July 1971 report based on that meeting, theDistrict of Columbia committee outlined the dimen-sions of the city-to-suburbs movement of Federal facil-ities in the Washington area:

The Federal Government is the largest single em-ployer in the Washington Metropolitan Area andits actions affect almost every facet of the area'slife. Ever since the move of the Atomic EnergyCommission to Germantown, Maryland, in 1958,there has been a steady movement of Federalemployment away from the central city into theVirginia and Maryland suburbs. From 1963 to1968, at least 42 components of 18 agencies employ-ing some 14.000 workers have moved out of theDistrict. Another 12.000 were involved in the NavyDepartment move to Arlington, Virginia. 5.000 inthe Public Health Service (Department of Health,Education, and Welfare-HEW) transfer to Rock-ville, Maryland in 1970. and 2.200 in the plannedmove of the U.S. Geological Survey to Reston,Virginia.2"In iight of the criticism of GSA site selection poli-

cies, the Commission invited GSA to testify at its Jane1971 hearing concerning its role in remedying racialpolarization in the Nation's metropolitan areas.Shortly before the hearing GSA announced that it hadentered into an agreement with HUD for its coopera-tion in selecting sites for Federal facilities which havean adequate supply of nondiscriminatory, low- and

2" D.C. SAC Transcript at 99.276 District of Columbia Advisory Committee, U.S. Commission on

Civil Rights, The Movement of Federal Facilities to the Suburbs iv(1971).

moderate-income housing. Arthur F. Sampson, Com-missioner of Public Buildings, described this agree-ment at the Washington hearing:

The system we will use is to involve HUD in theearly process when we have a request for space.For example. if we are contemplating constructinga new building, rather than waiting until we haveselected certain sites, we will bring HUD peoplein and use their expertise in the selection of sitesto give us advice on housing and also other aspectsof the Executive order that they are involved in.

When we are talking about leasing of buildingswe will get [HUD] involved in the delineation ofthe geographical area that we will use to go outand advertise for space, we will seek their adviceand expert help at the earliest possible stage.

In addition. should we both find, as we process ourrequests for space that there is a need for morehousing than is available at that time, we willwork torAher to arrive at what is now called anaffirmative action plan to see that housing becomesavailable. This is very specific in our agreement,that housing becomes available at the time Federalemployees will occupy that space or within a shortperiod of time thereafter.2"

GSA officials were questioned about GSA's plans forimplementing the HUD 'GSA agreement and about thescope of the affirmative action plans authorized by theagreement. Herman W. Barth, Deputy General Counselof GSA, testified concerning his interpretation of thetype of commitment which a community must make inorder to be selected for a Federal facility:

I think it would basically have to include a sittingdown and negotiating with the broad spectrum, .

to get them to remove any obstacles, and I thinkif there is an obstacle such as zoning, then you aregoing to talk to them about removing that.Now, how far you can go and how tar you can goto enforce something like that, is something thatwe are going to have to wait and see. Obviously,this is a new agreement. We have no experienceunder it. We're going to proceed with it. we aregoing to try to do the best we can under it. If wefind, as the agreement says, that it is going to needchanging or re-encorcing at the end of a year,we'll do that."'

ne Washington Hearing at 311-312."'Id. at 316-317.

The Commission also sought to determine GSA'spolicies with regard to Federal facilities already lo-cated in communities lacking low- or moderate-incomehousing for their employees or where discriminatoryhousing practices prevailed. Harold S. Trimmer, Jr.,Assistant GSA Administrator, was doubtful aboutGSA's power to take corrective action in such a situa-tion:

. . . in terms of correcting a past situation, whenyou look at the factor of leverage, our leverageexists primarily when we are going into a situation.

Once we are already located there, in terms of thepractical effect that we can have, I think it islimited. I think it is limited to the kind of thingthat Mr. Sampson suggests, working with the com-munity and suggesting that if you want moreFederal facilities, you had better start moving inthis direction.2"

Finally, the Commission questioned GSA Adminis-trator Robert Kunzig about GSA's obligation as aFederal agency to see that Federal policies of nondis-crimination were practiced in all housing in a givencommunity selected as a Federal site. Mr. Kunzigmade it clear that GSA, under HUD agreement, wasconcerned with taking affirmative action only to as-sure the availability of adequate, nondiscriminatoryhousing for Federal employees, and not to assure thatan adequate supply of nondiscriminatory housing ex-isted for others in the area.279

While GSA's affirmative action plan represents astep forward, a great deal of damage already has beendone by GSA's past policies. GSA's failure to commititself to take affirmative steps in communities whichlack adequate low- to moderate-income housing toaccommodate nonagency as well as agency personnelcan only perpetuate the racial isolation 280

718 Id. at 32f'5!d. at 315.

Implementation of the HUD/GSA agreement, moreover, has notbeen satisfactory. GSA considers itself only obligated to "consider"the availability of low- and moderate-income housing for Federalemployees, not to assure its availability. Further, the proceduresadopted do not encuorage communities under consideration for Fed-eral installations to improve housing opportunities for minority groupmembers or low- or moderate-income families. See Reassessment,supra note 222, at 133-145. See the following regulations. GSA, Con-sideration of Socio-economic Impact When Selecting Locations forFederal Buildings, 37 Fed. Reg. 11323; HUD, New and RelocatingFederal Facilities: Procedures for Assuring Availability of Housingon Nondiscriminatory Basis for Low and Moderate Income Employees,37 Fed. Reg. 11367; and GSA, Selection of Site for Federal Build-ings: Consideration of Socioeconomic Impact, 37 Fed. Reg. 11371(June 7, 1972).

49

Remedies for Racial Polarization

Previous chapters have traced the development ofresidential separation within the Nation's metrt,,,olitanareas and have explored the disastrous consequencesfor the country as a whole. In recent years there havebeen efforts by different levels of government to rem-edy the situation. Thus far these efforts must be char-acterized as inadequate.

This chapter will discuss solutions which have beentried or proposed. Some of these solutions have beendiscussed in preceding chapters and will be discussedonly briefly here. It will he seen that virtually all ofthe obstacles to equal housing opportunity have beenthe target of proposed remedies; what each of theremedies lacks is thoroughness and rigorous applica-tion.

Elimination of Discrimination in HousingA major causeindeed one sufficient in itselfof

the present system of residential segregation by raceor color has been discrimination in the provision ofhousing. In recent years important underpinnings ofthe system of racial exclusion have been eliminated.The authority of the Federal Government. and manyState and local governments, is now behind equalopportunity in housing rather than suppporting dis-crimination.

Title VIII of the Civil Rights Act of 1968 prohibitsdiscrimination in the sale or rental of most housing281

and the Supreme Court has interpreted the CivilRights Act of 1866282 as prohibiting any other dis-crimination in housing.283 Thirty-three States andmore than 400 localities have enacted legislation or

"I 42 U.S.C. §2000(d).'8142 U.S.C. §1982.2" Jones v. Alfred H. Mayer & Co., 392 U.S. 409 (1968).

passed ordinances while private organizations haveworked against discrimination in housing.284

Nevertheless, there are still two housing marketsone for whites and another for blacks, Mexican Amer-icans, Puerto Ricans, or whatever racial or ethnicgroup comprises a large and subordinated minority inthe particular metropolitan area. As long as people aretreated differently in their search for housing, thisdual market continues.

Chapter 5 has detailed the weaknesses in Federalenforcement of Title VIII and has offered recommen-dations for improving enforcement.

But while it is important for Government enforce.ment agencies to take effective action on complaints, acomplaint-oriented enforcement system will not, in thelong run, eliminate tne dual housing markets. Whatthe minority homeseeker wants is a place to live, not alawsuit. The minority family wants a real estate mar-ket which works as easily and effectively for them asit does for majority families. They are reluctant to tryto find housing in areas where they believe there willbe discrimination and are reluctant to complain ofdiscrimination, since it is easier to find housing else-where. Moreover, a person often does not know thathe has been discriminated against. If a landlord saysthat an apartment is renting for $150 a month, how isone to know that prospective white applicants arequoted the price of $120 a month? If the mortgagelender says that one's credit is not good enough for amortgage, how does one know that a white in the sameposition would receive the financing?

An essential requirement of an enforcement systembased on complaints is that it be fair to the personagainst whom a complaint is made. Not everyone

3e4 PH Eq. Opp. in Housing at 2319.

51

against whom a good faith allegation of discrimina-tion is made has actually discritninated. A mechanismmust ;:xist for evaluating the complaints and making ajust determination. Such a mechanism will necessarilybe time-consuming and thus leaves a barrier to thegoal of equal access to housing.

A complaint-oriented enforcement system, therefore,must be secondary to changes in the way the housingmarket operates. The market must be operated in away which will minimize, beforehand, the chance ofdiscrimination. It must perform in a manner whichwill convince minority homeseekers that they will notface discrimination.

If a complaint-oriented enforcement system is abackup for a policy of equal housing opportunity, thefirst line remedy for the dual housing market must beaffirmative action to open the market. There are sev-eral tools available to do this.

First, an enforcement agency, by requiring racialdata, can keep track of the number of minority groupmembers seeking housing from various landlords, realestate agents, or builders, or seeking financing frommortgage lenders and the number who are successfulin these pursuits. This will provide some indication ofhow well these sectors of the housing market aremeeting their responsibility to the minority communityand will reveal situations which might indicate sys-temic discrimination.

A second tool for an enforcement agency is to usetesting to determine whether a particular companydiscriminates. In testing, minority and majority groupcustomers, equal in all other relevant respects, are sentto a company to see whe'llet they will be treatedsimilarly.

Third, firms which are part of the housing market-ing system can be required to take affirmative actionto seek out ---dnority clientele. Such action includesemploying advertising which makes clear that therewill be no discrimination and which appears in minor-ity media. It also includes affirmative action on thepart of such firms to employ minority group members.especially in positions in which there is customercontact and in decisionmaking positions.

Increasing the Housing SupplyAn important remedy for unequal housing oppor-

tunities is to increase the supply of housing availableto low- and moderate-income families. Unless there ishousing available at a cost within reach of low- and

52

moderate-income families, the best system to remedyhousing discrimination will do little more than openopportunities which are economically unfeasible tomany minority families.

Federal Subsidy Programs

The supply of new low-income housing today existsprimarily through subsidies by the Federal Govern-ment. The principal Federal housing subsidy programswere Section 235 (homeownership), Section 236 (low-rent housing 1, rent supplement payments. and low -rentpublic housing. On January 5, 1973, all of theseprograms were suspended by the Secretary of Housingand Urban Development. In suspending the programs,HUD provided no alternative plan to fill the verycrucial void it created.285 The subsidy programs wereaimed at closing the gap between the minimum cost ofbuilding a unit of housing and the low-income fam-ily's available income for housing expense. They weredesigned so that a limited-income minority familywould not be consigned to living solely in undesirableor disadvantageous sections of the metropolitan area.Their success, however, depended upon the removal ofbarriers which prevented the programs from beingused in many communities, as well as the enforcementof requirements that housing provided under Federalprograms he available to minorities regardless of itslocation within the metropolitan area.

Chapter 4 discusses in detail how suburban juris-dictions have exercised their power to control the useof land to support the prevailing view that the commu-nity should be homogenous in its population, thathousing patterns associated with big city slums shouldbe avoided, and population groups which might causean increase in community expenses, and therefore lo-cal taxation, should live elsewhere. In addition totheir traditional police powers to enact zoning ordi-nances to regulate land usage, local governments pos-sess ability to control overall community development

See note 102 supra. One clement of current Federal housingpolicy is III:D's experimental housing allowance program, which pro-vides for a series of regular (generally monthly) payments to familiesor eligible individuals who are "unable to afford a decent home ina suitable living environment." NO of Housing and Urban Develop.ment. First Annual Report of the Experimental Housing AllowanceProgram, 3 (May 1973). The allowance amount is determined byfamily need in relation to the cost of a standard, existing house orapartment located in a modest neighborhood. Id. (Emphasis added.)Because it applies only to existing housing, the effect of the programis to increase the demand for modest. standard housing, without in-crasing the supply. Id. at 12. The resulting shift in the demandcurve is likely to drive housing costs even higher. Moreover, theprogram, because it does not spur new housing, provides no accessto newer suburban areas where little or no modest housing now exists.

through comprehensive planning. In addition, localgovernment approval is required before either publichousing or rent supplement housing will be allowed.

Several promising remedies have been developed toopen suburban jurisdictions to low-income housing,particularly federally-subsidized housing. However, aswill be noted, these remedies still leave substantialroom for improvement.

New York State Urban Development Corporation

The New York State Urban Development Corpora-tion is a State agency and public benefit corporationcreated in 1968 to develop low- and moderate-incomehousing, promote commercial development, and pro-vide civic facilities.286 It is specificall, given thepower to bypass local zoning ordinances, buildingcodes, or subdivision regulations for the purpose ofbuilding housing projects for low- and moderate-in-come families. The agency also has the powers ofeminent domain. It is probably the most powerfulinstrumentality yet devised to locate and constructhousing for low- and moderate-income families.

Although the corporation is encouraged to workclosely with local officials and to give consideration"to local and regional goals and policies as expressedin . . . local comprehensive land use plans," 297 it isempowered to override the requirements of local law"when in the discretion of the corporation, such com-pliance is not feasible or practicable." 288 So far, how-ever, approximately 90 percent of UDC projects havehad the approval of local government.

The UDC does not have the power to subsidize thecost of land or of housing. Preexisting Federal andState programs must be relied upon for this.

To date, the corporation, in the view of one ob-serv-:r, "has acted with extreme caution, placing proj-ects where they will likely meet a high rate of localacceptability, rather than placing them where, if ac-cepted, they would result in substantial economic inte-gration. It would rather build than fight." 289Occupancy of UDC-developed housing is 30 percentblack and 10 percent "Spanish and other minorities."UDC's charter requires "affirmative marketing" to as-sure that minorities have equal access to the housingwhich it provides. UDC now has $1.5 billion in bor-rowing power granted by New York State and has

N.Y. Unconsol. Laws §6254 (McKinney Supp. 1969).21,1 Id. §6266(1).2AB Id. §6266(3). The corporation, however, must comply with the

requirements of the State building code.V"' Testimony of David M. Trubek, Washington Hearing at 877-878.

completed 13 projects housing some 7,000 people. Inaddition, it has broken ground for 52 more projectsand is planning another 51.290

The UDC has built relatively few low-income units,and it has not been active in suburban communities.Almost all of its developments contain a ratio of "70-20- 10 " -70 percent moderate-income units, 20 per-cent low-income, 10 percent elderly. Moderate income,moreover, is defined as $9,000 to $11,000 per year, alevel which excludes many working-class families 291Approximately 95 percent of its units have been con-structed in cities. The threat of exercising its power tooverride has been used to facilitate zoning negotia-tions, but has rarely been used against the wishes oflocal government.292 Despite this restraint UDC lostmuch of its power in a recent amendment to the act(June 5, 1973), which allows any town or incorpo-rated village to veto UDC projects.2"3 The amendmentappears to be a compromise in order to add $500million to the UDC bonding authority.

As a State agency, the UDC cannot look at thehousing and development problems of an interstatemetropolitan areasuch as the New York metropoli-tan areaas a whole, since its jtA.Isdiction ;- limitedto the single State of New York. Since ,ome of thecountry's metropolitan areas cross State lines, theUDC type solution cannot be considered a completeone.

The principal advantage of the UDC approach isthat it provides an instrument for producing low-income housing, instead of relying entirely on privateinitiative. The disadvantages were summarized as fol-lows:

When an agency is given two goals which must ofnecessity confrot with one another, it will tend toforget about the more difficult one. An operatingagency like the UDC will have little hope to surviveif it used its energies to fight local towns, andfailed to build homes.294

Legislative Reform of Zoning

The Commonwealth of Massachusetts has pioneeredin legislative reform of local zoning practices which

"" See Newsweek, Nov. 6, 1972, at 88.2°1 Trubek testimony, Washington Hearing at 878.'" Id.2°3 §6266(5).2" Id. at 880.

53

tend to exclude low-income housing. The Massachu-setts statute295 seeks to stimulate construction of hous-ing in the suburbs for low- and moderate-income fami-lies by providing streamlined procedures for localapproval of such housing.

Under the statute any public agency, nonprofitsponsor, or limited dividend corporation proposing tobuild subsidized housing may submit a single applica-tion directly to the local board of zoning appeals inlieu of separate applications to various local boards.- "aThe board of appeals holds a public hearing on theproposed plan. .After receiving testimony, the boardmay: (1) approve the application and issue a compre-hensive permit, which includes zoning, subdivision,and building permit approval; (2) approve the appli-cation with certain conditions and requirements; or(3) deny the application. If the board of appealsdenies an application, the board must show, if there isan appeal, that its decision was "reasonable and con-sistent with local needs." Local needs are to be judgedin terms of the regional need for low- and moderate-income housing. If the application is either denied orgranted with certain types of conditions, the applicantmay appeal the decision to a housing appeals commit-tee of the Massachusetts Department of CommunityAffairs. Further appeal may be taken through thecourts.

This procedure assists the developer seeking to ap-peal a denial of necessary zoning by providing a one-step procedure to obtain all his permits, if he pre-vailsincluding zoning approval, health certificate,and so forth.

The statute provides maximum quotas of low- andmoderate-income housing for each locality. This isintended to allay local fears of large quantities ofsubsidized housing being built in a community.

Many questions have been raised concerning theMassachusetts approach to providing more suburbanhousing for low- and moderate-income families. Thesystem established is a passive oneit depends in parton private nonprofit initiative to propose, sponsor,and build the housing. There is no guarantee that thisaltruistic initiative will forthcoming or that it willlead to the construction of housing at the most appro-priate locations. Hou--.og built by traditional profit-making firms under the Federal Section 235 program

2°6 Mass. Gen. Laws Ann. Ch. 40B §20-23 (1971).2" Most municipalities require that all building applications be ap-

proved by several boards (e.g., town board of survey, board of health,board of subdivision control, planning board, and building inspector).

54

for hom-awnership for moderate-income families isnot aided by the Massachusetts statute because itsprovisions apply only to nonprofit sponsors, limiteddividend corporations, and public agencies. The maxi-mum goals set under the legislation are not related tosuch relevant factors as the present composition of themunicipality's population or the job opportunitiespresent in the area. Moreover, minimum housing goalsare not set. If 10 percent of a town's dwelling unitsare already occupied by low- or moderate-income fam-ilies, or if 1.5 percent of the residentially, commer-cially, or industrially zoned land in the community isalready occupied by such housing, further applica-tions for expedited action by the zoning hoard ofappeals may be denied. Thus very little low- andmoderate-income housing will be possible under theState's system.

The law also contains loopholes that may allow alocality to refuse to allow the construction of low-income housing within its jurisdiction. Permits maybe denied if the denial is "consistent with localneeds," for example, "to protect the health or safety ofthe occupants of the proposed housing or of the resi-dents of the city or town," "to promote better site andbuilding design in relation to the surrounding," or"to preserve open spaces . . .," 297 as long as thestandards are applied equally to subsidized and un-subsidized housing. While the importance of such fac-tors cannot he denied, these provisions give the ob-structionist community enough ammunition to delay aproposed housing development for several years, aprospect which is likely to deter many developers fromareas in which the shortage of housing foi low- andmoderate-income families is the most severe.

The basic approach of the Massachusetts statute isfollowed in the American Law Institute's "Model LandDevelopment Code." The model codes are extremelyinfluential in determining the kind of legislation mostStates adopt. Some States are considering bills whichare based on the Model Land Development Code.

Two States, Wisconsin and Connecticut, have con-sidered, but not enacted, proposals which improveupon the Massachusetts statute by including privatebuilding firms among those eligible to invoke thestreamlined procedures of the statute.

Zoning reform is also possible at the local level.Fairfax County, Virginia, has passed an ordinancerequiring in townhouse and apartment districts that a

2° Mass. Gen. Laws Ann. Ch. 40B §20 (1971).

site plan must allocate 6 percent of the planned unitsto low-income housing and i5 percent to moderate-income housing. If the applicant is successful in ob-taining a Federal subsidy for the units, or is willing toprovide them without subsidy, he receives a "densitybonus--that is, one additional unit may he built forevery two units of low- or moderate-income housingconstructed.298

The Fairfax County approach will not open thatcounty up to low- Ind moderate-income families over-night. The percentage of low-income housing requiredis minimal and the units need not he provided at thesame site "as long as the substitution . . . will notresult in an undue concentration of low and moderateincome families in a particular geographical area." 299Such a provision is subject to abuse. Finally, therequirement only applies to projects of 50 units ormore, although smaller projects can qualify for thedensity bonus.30°

Apart from these problems the more important ques-tion remains: What incentive does the typical subur-ban jurisdiction have to adopt an ordinance of thiskind? Unless incentives are provided by a higher levelof government it is doubtful that many jurisdictionswill see such an ordinance as being in their self-interest.

Litigation with Respect to Land Use Controls

During the past few years numerous cases, both inthe State and the Federal courts, have challenged avariety of discriminatory practices excluding minori-ties from suburban communities. This litigative ap-proach is not expected to be more than a partialsolution to the problem of opening up the suburbs.New legal rights and principles are established slowly,and case-by-case litigation is time-consuming and ex-pensive. Nevertheless, there have been significant de-velopments in the law in this area. Furthermore, in

294 Amendments to Section 30-2.2.2. Fairfax County Zoning Ordi-nance, Jan. 22, 1973. However, the Virginia Supreme Court recentlyruled in companion cases that these zoning ordinances were invalidbecause the State statute authorizing county zoning ordinances didnot authorize such "socio-economic" zoning practices. De Groff v.Board of Supervisors of Fairfax County, Record No. 8118 (Va. Sup.Ct., filed Aug. 30, 1973); !Atkinson v. Board of Supervisors of FairfaxCounty, Record No. 8209 (Va. Sup. Ct., file ! Aug. 30, 1973). Thecourt also added, without hearing any argument or accepting briefson the issue, that the zoning scheme violated the State Constitution'seminent domain "taking" provisions. A petition for rehearing was filedOct. 1, 1973.

2°9 Item 3a(5) (c).a'° Item 3.

assessing the potential of the litigative approach onemust keep in mind the limitationspolitical and oth-ei wiseof alternatives.

Some courts have begun to take seriously the propo-sition that a local niunicipality may not frustrate thelegitimate goals of the metropolitan area as a whole.The Ninth Circuit Court of Appeals, in Southern Ala-meda Spanish Speaking Organization v. City of Unioncity,301 suggested that it might be "the responsibilityof a city and its planning officials to see that the city'splan as initiated or as it develops accommodates theneeds of its low-income families who usuallyif notalwaysare members of minority groups." 302 Similarlanguage can be found in a decision of the SecondCircuit Court of Appeals, Kennedy Park Homes v.City of Lackawanna.3" Both of those cases, however,involved discrimination against persons who were al-ready residents of the city involved. In the moretypical instance of suburban exclusion, those who seekredress will reside in a central city ghetto and thushave a more tenuous claim to a favorable zoningdecision from the suburban jurisdiction. An explicitconcern with extramunicipal interests has been shownby the Pennsylvania Supreme Court:

The implication of our decision in National LandInvestment Co. v. Eastown Township Board ofAdjustment, is that communities must deal withthe problems of population growth. They may notrefuse to confront the future by adopting zoningregulations that effectively restrict population tonear present levels. It is not for any given townshipto say who may or may not live within its confines,while disregarding the interests of the entire area.If Concord Township is successful in unnaturallylimiting its population growth through the use ofexclusive zoning regulations, the people who wouldnormally live there will inevitably have to live inanother community, and the requirement that theydo so is not a decision that Concord Townshipshould alone be able to make.304

A serious problem with litigation as a tool to coun-teract exclusionary practices, however, is the remedywhich courts will fashion. In Appeal of Girsh,3" for

424 F. 2d 291 (9th Cir. 1970)." Id. at 295-96." 436 F. 2d 108 (2d Cir. 1970); see also Crow v. Brown, 332 F.

Supp. 382 (N.D. Ga. 1971) ard per curiam, 457 F. 2d 799 (5th Cir.1972).

'3' Appeal of Kit-Mar Builders, Inc., 439 Pa. 466, 268 A. 765 (1970).A companion case is Appeal of Girsch, 437 Pa. 237, 263 A. 2d 395(1970).

106 437 Pa. 237.

55

example, the court did not require the town to grant apermit for the project requested but simply declaredthat the town could not exclude all apartments. Thetown reportedly responded by zoning a quarry forapartment uses."" Furthermore, even if appropriateland had been zoned for apartments, there would beno guarantee that any apartments actually constructedwould be available for low- or moderate-income fami-lies. A victory at the appellate level may be of littlepractical value:

There are so m'ny points during the processwhere local officials can cause delay and hampera builder that a developer armed with a stunningvictory at the appellate level has only begun thefight. For example, in one case where the Statecourt threw out a four-acre minimum [lot size],it is reported that the town rezoned the land fortwo acres and in effect said to [the] developer"sue us." The time and money costs of litigationare tremendous, and if each small issue has to belitigated, developers will either stay out or acquiescein local policies.307

Clearly, the courts cannot be relied on for a com-plete solution to the problem of suburban exclusion.Only a few of the Nation's courts have been active inthis area in an affirmative way. Furthermore, remediesthat will be effective will be difficult for courts tofashion and to supervise; they are better implementedby other branches of government.

New CommunitiesOne approach to urban housing problems has been

to build an entire new city from scratch. The idea isnot a new one"new towns" have been built in Eu-rope since the early part of the century. New towns,or new communities, are large developments with em-ployment. housing. and shopping and recreational fa-cilities. Most of the new communities which have beenbuilt or planned in this country have either been in orwithin commuting distance of a metropolitan area. Anew community differs from the typical suburban sub-division to the extent that it is larger in scale andprovides, or attempts to provide, all facilities neces-sary for living, rather than housing alone.

There are numerous new communities at the plan-ning or development stage but few which are actually

" Testimony of David Trubek. Washington Hearing at 856, citing22 Zoning Digest 100a (1970).

"Id. at 853-854.

56

operative. Reston, Virginia, and Columbia, Maryland,both in the Washington area, are two which are fairlywell populated and are in advanced stages of develop.ment. The Commission on Civil Rights devoted a por-tion of its public hearings in Baltimore, Maryland, totestimony about Columbia. The experience of this newcommunity seems a good indication of what type ofsolutions new communities offer to present metropoli-tan problems.

Columbia is located on approximately 15,000 acres,halfway between Baltimore and Washington. Whencompleted in about 1930, it will have 110,000 people.Present population is roughly 20,000. There is a mix-ture of single family housesboth detached androwand of apartments, in addition to shopping fa-cilities, an industrial park, schools, health care facili-ties, and recreation of all kinds.

Approximately 15 percent of Columbia's residentsare black, and these are blacks of various incomelevels. Columbia apparently succeeded in eliminatinghousing discrimination by announcing from the begin-ning that it would be an open community.

We haven't been driving at interracial housing asa social crusade. We have believed that if youbuild a real city that the naturalness of the marketcould be accepted: black, white, rich, medium,poor, whatever the profession or business or reli-gion or activity might be.3°8

This approach has resulted in Columbia's attractingminority group persons, and has also allayed whitefears of "changing neighborhoods."

Columbia, nevertheless, has not been a completesuccess, and its relative success has come only at ahigh cost. There is little low-income housing. A fewhundred subsidized units built under the 221(d) (3)program are for moderate, not low-income families.The industrial park does not provide enough jobs forColumbia residents, most of whom commute to Balti-more or Washington. Conversely, many of the employ-ees working in the industrial park cannot afford tolive in Columbia.309

A major problem faced by new town developers isfinancing land acquisition, the site development, andinitial housing until return on the investment is real-ized. In the case of Columbia, Maryland, the cost of

"Testimony of James W. Rouse, developer of Columbia, in Balti-more Hearing at 451.

3"9 In 1972, the least expensive apartment in Columbia was $92, forone bedroom.

the approximately 11,610 acres originally purchasedwas about $16.9 million.'" Other initial costs includeplanning and market analysis, streets and sidewalks,sewer and water lines, shopping centers, and commu-nity centers. The cost of land and the initial improve-ments for Columbia required the Rouse Company toborrow $48.5 million. It was 5 years after the originalacquisition of land before the first 100 houses inColumbia were sold and the first 262 apartment unitswere available for rent."

The Federal Government has recently begun to pro-vide limited financial support for new town develop-ment. Title VI of the Housing Act of 1968 and TitleVII of the Housing Act of 1970 authorize the Govern-ment to guarantee the financing of land acquisitionand development up to $50 million per new commu-nity.312

While new communities provide a method of meet-ing the housing needs of an expanding populationduring the decades to come in a way which willfacilitate racial and economic integration, they do notreach more immediate problems. Those parts of ourmetropolitan areas which have already been developedcan hardly be abandoned in favor of the new.

Metropolitan Area Acceptance ofLow-Income Housing

In attempting to assure sound, orderly, and equita-ble development of metropolitan areas, coordinationamong the agencies which control the area's develop-ment is necessary. Planning must be coordinatedamong the Federal agencies which are responsible forsuch programs as highways and home financing, rec-reation and pollution control. Federal, State, county,and local programs must be coordinated. Finally, sep-arate communities in the same metropolitan areas,with a variety of special interests, must he encouragedto work together for the benefit of the entire area.Lark of such coordination at all levels may lead tohaphazard development and to the preservation oflocal interests at the expense of the metropolitan area,as already has been described.

In determining land use practices, each small politi-cal jurisdiction tends to protect its own fiscal base, its

"" Advisory Commission on Intergovernmental Relations, Urban andRural America: Policies for Future Growth 87 (April 1968). Otherexamples: Reston, Va., $13.6 million for 7,180 acres; New OrleansEast, $27.68 million for 32,000 acres; Westlake Village, Calif., $29million for 11.7,00 ;Imes, id.

3i I Id. at 87-88.312 73 Stat. 678 (1968) ; 84 Stat. 1791 (1970).

own narrowly conceived interests, and "zone out" low-income families. Under the prevailing use systems,there is no metropolitan-wide distribution of low-in-come housing, with the result that such housing isexcluded front almost all suburban communities. Un-less responsibility for certain land use controls isassumed or reviewed at a higher governmental level, itis difficult to foresee changes in existing practices. Avariety of methods for assuring that a wider point ofview prevails has been undertaken.

The Principle of the Planned Fair Share

The Miami Valley Regional Planning Commissionin Dayton, Ohio, is one planning agency which hasattempted to plan for housing in an innovative man-ner. The Dayton experience emphasizes both the po-tential and the limitations of metropolitan planningagencies today.

In September 1970, representatives from Daytonand some 40 other sections of the Dayton metropolitanarea unanimously agreed on a regional formula fordistributing 14,000 units of low-income housingthroughout the area. Dale Bertsch, executive directorof the Miami Valley Regional Planning Commissionand the principal author of the Dayton Plan, describedthe plan at the Washington hearing:

What we attempted 'to do is begin a process ofevaluation of all the factors . . . which relate tohousing. and not only the factors related to lowand moderate income or to racial ghettoization, butthe total housing market, the total misuse of landon a large scale, and everything else involved, andan attempt to identify need within our region, theneed in terms of housing by breakdown and bygeographic area, and all of the problems that areinvolved.

The actual plan itself, at least the portion whichappears to have been unique, was the developmentof a system whereby a fair share of an equal sharesystem was developed for scattering low and moder-ate income housing opportunity throughout theregion.

It was felt by the Commission in the developmentof this particular plan that the housing disparitieswithin the region had to he attacked on a totalregional basis."'"

The "fa:: share" principle involved determining the

3" Washington Hearing at 8-9.

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need for low-income housing in the Dayton metropoli-tan area and the capacity of the five counties in thearea to accommodate such housing. Analysis showedthat the region needed some 14,000 additional low-and moderate-income housing units. The five countieswere then broken down into 53 "planning units" andthe needed dwellings were assigned to the planningunits based on consideration of the following factors:

In making its analysis of pertinent factors andways of combining them, the staff considered threegroups of elements. One was population, and in-cluded such things as number of people, numberof households, household income distribution, num-ber of persons over age 65 and number of welfarecases in each planning unit. Another category washousing itself and within this were number ofdwelling units by type, age of dwelling units, thecondition of housing in each planning unit, percent-age of home ownership, average house value, andnumber of building permits issued during the lastseveral years. The third category was facilities, andthis included the availability of sewer and .water,transportation, shopping facilities, recreationalareas, schools. and proximity to employment andjob centers.314

Development of the plan was followed by a 2-yearperiod of education and discussion, including work-shops, public hearings, and informal meetings.

To many, the Dayton Plan represents a promisingstep in a direction where few others have ventured.Former HUD Secretary George Romney is among theenthusiastic backers of the concept:

... The time is past when city officipls could affordto make decisions solely on the basis of theirimpact within the legal boundaries of the com-munity. The future of our urban areas depends onan ecumenical approach to the real city.315

Yet, the plan is only a step. Each community which iscovered by the plan still retains the power to blocklow-income housing through 'such devices as land usecontrols. Communities also retain their traditional reli-ance on property taxes for local revenue, which pro-vides a rationalization for the exclusion of low-incomehousing. As Bertsch observed in speaking of the unan-

"4 D. Bertsch and A. Shafor, A Regional housing Plan: The MiamiValley Regional Planning Commission Experience, American Instituteof Planners, Planners Notebook 1:2 (April 1971) (emphasis in theoriginal).

ass Speech before U.S. Conference of Mayors, June 14, 1972.

58

imous adoption of the Dayton Plan:

I think also, very honestly, the:. there was a certainnumber of votes that were cast . . . with the fullrecognition that we really have no legislative powerand that the ultimate decision would be left up tothe local community anyway.. "a

In January 1970, there were in the Dayton areaalmost 300 units of federally-subsidized housing, vir-tually all of which were located in the city of Dayton.Since the Dayton Plan was adopted, more than 1,400units of federally-subsidized housing have been built;about 850 of these units are in suburban jurisdictions.In addition, approval has been granted or applicationmade for an additional 3,950 units of which about3,700 are to be in suburban locations.311

Across the country, the need for a regional ap-proach to urban problems is being increasingly recog-nized by planning agencies. In Raleigh-Durham,North Carolina, the Research Triangle Regional Plan-ning Commission is analyzing all vacant parcels ofland for appropriateness for low- and moderate-in-come housing.318 Recommendations based upon thisanalysis will be linked to the regional land use planand local government approval will be sought. InChicago, the Leadership Council for MetropolitanOpen Communities is studying the Dayton Plan andpossible modifications to accommodate differing condi-tions in that area. The Metropolitan WashingtonCouncil of Governments I,as adopted a "fair share"formula for allocation of housing opportunities.319 InMinnesota, the Metropolitan Council of the TwinCities Area has a policy of giving high priority toapplications for funding assistance from municipalitieswhich provide for low- or moderate-income hous-ing.820

One noteworthy aspect of the Dayton Plan was itsapproval by a commission dominated by suburbanand rural interests. Witnesses at the Washington hear-ing, however, illustrated the tenuous nature of planswhich seek voluntarily to unite local interests for thegood of the metropolitan area. Although, as Bertsch

a" Washington Hearing at 13."7 Interview with Ann M. Shafor, principal planner, Miami Valley

Regional Planning Commission, Jan. 11, 1973.318 NCDII, Trends in Housing, July-Aug. 1972, at 1, 3."9 Fair Share Housing Report presented at the regular meeting of

the Metropolitan Washington Council of Governments and adopted bymotion, Jan. 10, 1972.

al" Metropolitan Development Guide: Housing Policy Plan Program,adopted by Metropolitan Council of the Twin Cities Area, June 1973.

described, the suburban reaction to the Dayton Planoften "ranged from ridicule to outright hostility,"many suburbanites, along with their representativeson the planning commission, supported the plan.While suburban commissioners endorsed the DaytonPlan, Cleveland Mayor Stokes expressed some skepti-cism about the ability of regional planning bodies torepresent the interests of city residents adequately:

There is not a city or metropolitan unit in theUnited States in which the regional government unithas given the central city proportionate representa-tion in this powerful planning unit that will deter-mine every Federal dollar that will come into thecity, and that will determine the future planningand development of that metropolitan statisticalarea. . . .

Now it means ... that throughout the United Statesregional governments have organized to discrimi-nate against the central city in an organizationwhich is going to go on and be the sole deter-minant of whether or not Federal funds come intothe city . . .321

Mr. Stokes described the reaction of surroundingcommunities to Cleveland's proposal to build a raciallyand socioeconomically integrated community with5.000 units for low-income families on a 1,200 acresuburban tract owned by the city:

The Mayor of Beachwood notified our so-calledregional government of his unequivocal opposition.He hadn't even read the six pages [describing theproject]. The Village of North Randall, throughits mayor, urged the regional council to refuseapproval of our application for a detailed planninggrant under the New Communities Act. TheWarrensville Heights Board of Education adopteda resolution against the new town on grounds thatit would have more children to educate. Thevillage of Orange resolved in a resolution its"uildlterable" opposition. The trustees of Warrens-ville Township urgently requested the regionalgovernment to deny our application for a planninggrant. Not a one of them said anything about blackpeople moving out there. Not a one of them saidanything about poor people moving out there. Butthat was the unspoken reason, and Black Jack [acase of clearly racially motivated zoning] happensnot to go to that kind of situation. And it is that

n Washington Hearing at 219.32j hl. at 221-222.

Cleveland situation which I say is the day-to-daysituation of an America which learns that it nolonger talks about spies and wops and niggers,but rather talks about density and overcrowdingof schools. et cetera, to achieve the same purpose.322

The city of Cleveland filed suit against its councilof government, challenging the fact that the city, withone-fourth of the regional population, has only 3 of 52votes on the planning body. Meanwhile, in the Daytonarea, rural counties have considered withdrawingfrom the Dayton Plan, alleging that their interestswere not being adequately taken into account. Dr.John Dyckman, professor of city and regional plan-ning at the University of California, Berkeley, ex-pressed a possible objection to the Dayton Plan con-cept:

I don't think there is any intrinsic reason, anypersuasive logical reason why the distribution hasto be so scattered, and there may be social reasonswhy it ought not to be so scattered. That is, I thinkin many instances members of the minority com-munities would prefer that they not be so dilutedand in such small pockets within so many differentcommunities.323

A primary value of the Dayton Plan, however, is asa prototype for future solutions.

The Federal Role in Metropolitan Development

The underlying theme of the preceding sections ofthis chapter is that the problem of racial exclusionand separation must ne looked at from the perspectiveof the metropolitan area as a whole. Individual munic-ipalities acting alone can do only so much to help thesituation. Indeed, a major source of the problem isthat suburban communities have been able to act with-out having to consider the effect that their actionswould have on other parts of the metropolitan area.This section considers ways in which the FederalGovernment can use its influence on metropolitan de-velopment in a way which will further the goal ofequal opportunity.824

Comprehensive Planning: Assistance andStandards. Planning grants administered by the De-

3.'1 Id. at 175.n4 Several specific means of Federal influence are discussed in

ch. 5, e.g., HUD's project selection criteria, p. 39, and the proposedGovernment Facilities Location Act of 1971, p. 47.

59

partment of llousing and Urban Development provideone mechanism for sound. orderly, and equitablemetropolitan development. Under what are known as"701" comprehensive planning grants,'". the Secretaryof Housing and Urban Development is authorized tomake planning grants to State, metropolitan, and re-gional planning agencies in order to "facilitate com-prehensive planning for urban and rural develop-ment." 326

The Section 701 program has the following goalswith respect to housing. It seeks to:

1. Assure that housing concerns and needs becomean integral part. of the community planning and man-agement process;

2. Eliminate effects of past discrimination in hous-ing based on race, color, religion, or national originand provide safeguards for the future;

3. Develop housing growth policies which wouldinsure the provision of an adequate supply of housing,a variety of housing types, and pi aximity of housingto jobs and daily activities; and

1. Provide a decent residential environmentthroughout the planning area by ensuring that allhousing receives a proper and equitable delivery ofpublic facilities and services."'

The 1966 Housing Act and subsequent HUD guide-lines require that all recipients of Section 701 fundsmust prepare a housing elementa document describ-ing the area's housing problems and how they are tobe overcome. The housing element must specificallyconsider "the needs 'and desires of low-income andminority groups."328

According to Professor Dyckman, the Section 701program could be useful in bringing into existencefair share plans such as that of Dayton:

There is presently the requirement that all metropolitan planning which uses Federal funding underthe 701 program, . . . must contain a housing ele-ment. It's possible, too, that if these metropolitanareas were to carry out the guidelines which areprescribed by HUD to make provision for moderateand low-income housing. that they could in practicedevelop the kind of proposal that is being made inthe Dayton area."2"

Housing Art of 1954 §701. as amended; 40 U.S.C. §4610.""40 U.S.C. §461(g).

III'D Ii ndbook I. Comprehensive Planning Assistance Require-ments and Guidelines for a Grant 4-8 (Mar. 1972).

HUD Circular, Areawide Planning Requirements (MPD 6415.1A,7-31-70), Section III, Comprehensive Planning Certification.

Washington Hearing at 175.

60

Yet, while encouraging comprehensive planning,701 plans do not constitute enforceable local regula-tion but are merely advisory.

Project Evaluation: Mechanisms and Stand-ards. When the Federal Government gives out moneyfor various projects it generally sets standards for howthe money is to be used, to assure that the money isused in a way which is consistent with the goals of theparticular program involved and with broader Federalgoals. As discussed in Chapter 5, some of those moregeneral goals were established by legislation in thefield of civil rights. Title VI of the Civil Rights Act of1964 prohibits the denial of benefits under any pro-gram or activity receiving Federal financial assistanceon the ground of race, color, or national origin.'"Title VIII of the Civil Rights Act of 1968 requiresthat all Federal programs relating to urban develop-ment be administered in a way which furthers the goalof equal opportunity in housing.33' Considered beloware some of the relevant requirements with respect totwo programs generally desired by suburban govern-ments-----the water and sewer program administered bythe Department of Housing and Urban Developmentand the highway program administered by the FederalHighway Administration of the Department of Trans-portation.

Grants under the water and sewer facilities programof HUD"' and also under HUD's open space pro-gram' are conditioned on requirements analogous tothose for the comprehensive planning program dis-cussed in the preceding subsection.

In evaluating applications for water and sewer fa-cilities grants, HUD regulations provide for a pointsystem by which different scores are given accordingto the extent to which various criteria are met. Appli-cations receiving a greater number of points are givenpreference. The point system favors areas in which themedian income is lower and areas in which housing"will be accessible on a nondiscriminatory basis tofamilies and individuals with low and moderate in-come."'"

As discussed in chapter 5, the development of ametropolitan highway system has facilitated the great

12 U.S.C. §2000(d)"' Sections 808(d) & (e) (5); 42 U.S.C. §3608(c) & (d) (5).1.13 Section 702 of the Housing and Urban Development Act of 1965,

12 §3101 1961). as untended (Supp. V. 15.5-1969).'" Section 702 of the Housing Art of 1961, .12 §1500a

(1961), as amended (Stipp. V, 1965-1969 ) .334 24 C.F.R. §556, et seq.

suburban growth of recent decades and thereby hascontributed to the increasing residential separationbetween minority group members and the rest of thepopulation. The Federal Aid Highway Act of 1970"'attempts to force the highway pm gram to take intoaccount the unintended consequences of highway con-struction. In evaluating highway proposals DOT mustconsider "possible adverse economic, social, and envi-ronmental effects.""3" it must balance "the need forfast. safe and efficient transportation"' against pos-sible adverse effects of highway construction such as:

1. Air, noise, and water pollution;2. Destruction or disruption of manmade and natu-

ral resources, esthetic values, community cohesion,and the availability of public facilities and services;

3. Adverse employment effects and tax and propertyvalue loss;

4. Injurious displacement of people, businesses, andfarms; and

5. Disruption of desirable community and regionalgrowth.338Each State highway agency is required to prepare anaction plan for the implementation of the statute'srequirements."'" The plan must include alternatives inaddition to increased highway construction. Alterna-tives should be considered which would "minimize oravoid adverse social, economic or environmental ef-fects" especially in terms of their impact on "specificgroups" in relation to the requirements of Title VI ofthe Civil Rights Act of 1964. DOT's Title VI regula-tions recognize, moreover, that a highway may bediscriminatory becattee of whom it displaces or whereit is located;

The State shall not locate or design a highway insuch a manner as to require, on the basis of race,color, or national origin, the relocation of anypersons.

The State shall not locate, design, or construct ahighway in such a manner as to deny reasonableaccess to, and use thereof, to any persons on thebasis of race, color, or national origin.?'"

10.23 U.S.C. §109(a).33'23 U.S.C. §109(h).mild.3'18 U.'11" DOT, Policy and Procedure Memorandum (PPM) 90-4 par. 6

(Sept. 21, 1972). State plans must be submitted by June 15, 1973.After Nov. I, 1973, the Federal Highway Administration will not ap-prove any project unless the State's action plan has been approved. Id.

34° DOT, Nondiscrimination in Federal Assisted Programs of theDepartment of TransportationEffectuation of Title VI of the CivilRights Act of 1964, app. c, (a)(2)(vi) and (vii), 49 C.F.R. Part 21.

Despite what seem to be far-reaching DOT regula-tions, however, the Federal Highway Administrationhas maintained that the law prohibits only intentionaldiscrimination in such matters as relocation housingand who is allowed to drive on a highway.341

Enforcement of Metropolitan Planning. Thelack of implementation power of regional planningbodies is a serious obstacle in dealing with local resist-ance to regional goals. One possible source of such in-fluence is contained in Circular A-95 issued by theOffice of Management and Budget. Circular A-95 estab-lishes a system by which metropolitan "clearinghouses"rect ive notification of proposed applications for grantsor loans under about 100 different Federal programsand distribute these proposals for review by con-cerned units of government agencies.342 The clearing-houses are usually either councils of government orregional planning commissions and receive fundingunder the Section 701 program discussed above. Thisreview before a formal application has been preparedallows agencies other than the applicant to influencethe proposal while the applicant might still be open tomaking changes in it. If agreement of all concerned isnot reached, the clearinghouse or other governmentalunits or agencies may prepare comments on the formaiapplication which are sent along with it to the Federalagency.

Comments may be based on planning, environmen-tal, or civil rights criteria. The clearinghouse mayconsider the extent to which the proposed project isconsistent with or contributes to the fulfillment ofcomprehensive planning for the area and the extent towhich the project contributes to more balanced pat-terns of settlement and delivery of s a-vices to allsectors of the area population, including minoritygroups .343

In most respects the A-95 early warning system is avoluntary one. While proposed applications for coy-

"I See note 258 supra.N2 Circulars are directives from the Office of Management and

Budget to the various agencies in the executive branch designed tocoordinate Federal administrative programs and policies. Statutorybasis for Circular A-95 is Section 204 of the Demonstration Citiesand Metropolitan Development Act of 1966, as amended (80 Stat.1263, 82 Stat. 208), Title IV of the Intergovernmental CooperationAct of 1968 (82 Stat. 1103), and Section 102(2)(C) of the NationalEnvironmental Policy Act of 1969 (83 Stat. 853). Covered programsare listed in the current Office of Management and Budget Catalog ofFederal Domestic Assistance.

34a Inclusion of civil rights considerations was added to A-95 inMar. 1972. For the development of the civil rights concern with re-spect to A-95, see Baltimore Hearing at 318-327 and WashingtonHearing at 7-36, 350-363, 435-522.

61

ered programs roust be submitted to the clearinghouseand metropolitan clearinghouses are required to exist,neither the clearinghouse nor the other concernedgovernmental units or agencies is required to analyzethe proposed application or to make comments uponthe final application. Moreover, the Federal agencyadministering the program to which application hasbeen made is not required to follow the comments itreceives."

Metropolitan Housing Agencies: A LegislativeProposal. Legislation introduced in Congress in 1971but not enactedH.R. 9688. the proposed Housing andUrban Development Act of 1971attempted to pro-vide a means for planning which addresses housingproblem on o metropolitan basis."'5 Title V of the billproposed metropolitan and State housing agencieswhich words' create a 3-year program aimed at identi-fying area-wide housing needs, taking into accountsuch factors as proximity to places of employment,income groups to be served, and local programs bothto encourage new housing production and to preserveexisting housing. Subsidized housing funds would nolonger be provided to builders and sponsors withoutregard to the social and economic impact on the met-ropolitan area but would be funneled through central-ized housing agencies with metropolitan-wide jurisdic-tion. Funds also would be made available under TitleV to metropolitan housing agencies to be provided tolocal governments to help cover the difference betweenthe cost of providing various community services andfacilities to lower-income families and the amount ofrevenues received in the form of taxes or assessmentsfrom these families.

While the incentive grant provisions of this billwould have nullified the economic argument oftenraised to justify the exclusion of lower-income familiesfrom suburban communities, the proposed State andmetropolitan agencies lacked sufficient authority andpower to accomplish their stated objectives. The billcontained few incentives and even fewer sanctionswhich might overcome the opposition that many sub-urban jurisdictions have demonstrated to permittinglower.:ncome families to reside within their bounda-ries.

The only inducement in the bill consisted of metro-

3" For an analysis of the A-95 system see Melvin B. Moguloff,Governing Metropolitan Areas: A Critical Ream of Council of Gov-ernments and the Federal Role (Urban Institute, 1971).

'4.5 The bill died in the Rules Committee.

62

politan incentive grants which would help relieve sub-urban communities of the financial burden whichsome of them claim they would have to bear if thepoor lived among them. The only other provision inthe bill seeking to meet this problem of suburbanexclusion of the poor was one which provided forencouragement by State or metropolitan housing agen-cies. through "studies, technical assistance, and advis-ory information services," to eliminate "unreasonablerestraints on the provision of housing for low- andmoderate-income families." It is doubtful that thisfinancial incentive is sufficient to overcome suburbanopposition or that encouragement realistically couldbe expected to result in the elimination of suburbanrestraints on the provision of lower-income housing.

Title VI of this bill, covering community develop.merit block grants for activities such as water andsewer facilities, open space, and construction of utili-ties and streets, could have served as an inducementfor suburban cooperation with State and metropolitanagencies. The bill as proposed, however, did not re-quire full cooperation and participation in the metro-politan housing agency as a condition to receipt ofbenefits in the community development grants.

The bill indicates that all units of elected govern.ment should be represented in the metropolitanagency. The structure of these proposed metropolitanagencies should be based on population rather thaneqr ± representation of each jurisdiction within themet, ?:,.titan area. Problems such as those encounteredin the composition of many existing area-wide plan-ning agenciessuch as combination of several subur-ban areas to thwart proposed housing for low-incomeminority city dwellers under consideration by councilsof government--could be avoided.

Metropolitan housing agencies, established throughFederal housing and urban development legislation,could solve many of the problems of suburban exclu-sion. Legislation, such as H.R. 9688, could provide aneffective tool for opening housing opportunities pro.vided it includes sufficient power and authority tometropolitan housing agencies to persuade suburbancommunities to cooperate.

SummaryThe remedies which have been discussed in this

chapter are all useful, but none of them has broughtabout a reversal of the patterns of residential separa-tion which prevail in the country's metropolitan areas.Since the application of these remedies has been scat.

tered and usually less than rigorous, it would befoolhardy to expect the continued pursuit of theseremedies----by itselfto be more effective in the futurethan this pursuit has been in the past. There areseveral criteria which are useful in analyzing remedieswhich have been attempted as well as other remedieswhich might be suggested.

First, the remedy must be strong. The practices ofdecades---and the attitudes and residential patternswhich have resulted from these practicesare notchanged easily, as experience has shown. Many of theremedies which have been discussed have not beenstrong ones, especially as they have been applied. TitleVIII of the Civil Rights Act of 1968, for example. hasnot transformed the housing marketing system butgenerally looks at the problem on a house-by-housebasis.

Second. those responsible for implementing the rem-edy must have a strong incentive to make the imple-mentation effective. Many of the remedies which havebeen tried have not had provision of equal access tohousing as the primary goal. The success of someprograms has been measured in terms of number ofhouses produced, regardless of the race of those occu-pying them. Other programs are aimed primarily atbuilding roads or Federal facilities or at purchasinggoods and services for the Federal Government. Thepeople administering these programs often are judgedaccording to how well they meet their program goal,without regard to how well they also meet a civilrights goal.

Third, an effective remedy must apply to the wholecountry. State legislation might accomplish much inone State, or a fair share plan might be productive ina few metropolitan areas, but a mechanism is neededto accomplish the same results in more than just a fewscattered areas. An effective remedy wills therefore,necessarily involve the Federal Government.

Fourth, a remedy must look at the availability ofhousing in all parts of a metropolitan area. For onecommunity to enforce a strong fair housing law andprovide an ample supply of low- and moderate-incomehousing will not provide a solution to the problem ofracial residential separation as long as the rest of themetropolitan area continues to be subjected to restric-tive practices.

Fifth, a successful remedy will not be an exclusivelyFederal one. Decisions about community growth andhousing eventually become local ones. Equal housingopportunity will not be achieved until these local deci-sions further the cause of equality.

Sixth, a remedy must both end discrimination inhousing based on race, color, or national origin, andmust increase and broaden the housing opportunitiesof low- and moderate-income families. The accomplish-ment of either goal by itself will result in the contin-uation of segregated housing.

Seventh, a remedy must not look at housing alone.Housing cannot be separated from the location ofjobs, the transportation system, the provision of mu-nicipal services, and all the other dimensions of life ina metropolitan area.

63

Conclusion

Despite a plethora of far-reaching remedial legisla-tion, a dual housing market continues today in mostmetropolitan areas across the United States. Inade-quate enforcement by Federal agencies and circumven-tion or, at best, lip-service adherence by local authori-ties, builders, real estate agents, and others involvedin the development of suburban communities havehelped to perpetuate the systematic exclusion of mi-norities and low-income families. The result has beenthe growth of overwhelmingly white, largely affluentsuburbs, and the concurrent deterioration of centralcities, overburdened by inordinately large and con-stantly increasing percentages of poor and minorityresidents.

The 1970 census shows a 94.3 percent white subur-ban population in metropolitan areas of 500,000 ormore residents. In the same areas, the black popula-tion of the central city increased in 10 years from 18to almost 24 percent.

Two of the sectors hardest hit by the extensiveresidential segregation which has accompanied rapidmetropolitan growth have been education and employ-ment. School desegregation has been thwarted and theseparate school systems in the city and its surroundingsuburbs are by no means equal. Although the centralcities face more difficult education problems than themiddle. and upper-income suburbs, they are forced byother economic considerations to spend proportionallyless on schools and special programs. The city's cul-tural institutions and police, fire, and sanitation de-partments are just a handful of the competitors for itsdwipdling tax revenues. Ironically, suburbanites whovisit or work in the city benefit from these city serv-ices, but the suburbs offer no reciprocal benefits toexcluded urban minorities. Suburbanites, therefore,enjoy the best of both worlds, at the expense of thecity dweller.

64

Black and White Populations in Central Cities and Suburban Areas of the SMSA's ofBaltimore, Md.; St. Louis, Mo.-III.; and Washington, D.C.-Md.-Va.: 1940-1970

CrBALTIMORE, MD.

Central CityBALTIMORE, MD. Percentage

ofSuburban Area Population

total

100 100

90 - 90

80 - 80

10- 70

60 - 60

50 - 50

40 - - 40

30 - - 30

20 - 20

10 -10

0 0B W B W B W B W B W B W B W B W1940 1950 1960 1970 1940 1950 1960 1970

tf ' C f t

t.:¶1,

100

90

80

70

60

50

40

30

20

10

0 B W B W

ST. LOUIS, MO.-ILL.Central City

B W B W1

E3 W

ST. LOUIS, MO.-ILL.Suburban Area

Wr-

Wr777.7

B W

Percentageof total

population

100

- 90

- 80

- 70

- 60

- 50

- 40

- 30

- 20

- 10

0

1940 1950 1960 1970 1940 1950 1960 1970

100

90

80

70

60

50

40

30

20

10

0

at 1^

WASHINGTON, D.C.- MD. -VA. WASH r, GTON, D.C.- MD. -VA.Central City Suburban Area

B W1940

B W1950

B W1960

B W1970

B W1940

Percentageof total

popul lion

100

- 90

80

- 70

- 60

- 50

- 40

30

20

10

0W B W B W

1950 1960 1970Note: Figures for all 4 years have been calculated to apply to central city and suburban areas as defined for the 1970 census.Sources: Bureau of the Census, U.S. Dept of Comma ce, Sixteenth Census of the United States: 1940, vol. II, part 1, table 2; part 3, table 21;part 4, table 21; and pnrt 7, tables 21, 30; Census of Population: 1950, vol. II, part 9, table 14; part 13, table 41; part 20, tables 34, 42;part 25, table 41, and part 46, tables 38, 40, 42; U.S. Census of Population: 1960, voi. t, pans 10, 22, 27, table 21; Census of Population: 1970,PC(1)-B10, PC(1)-B22, PC(1)-827, table 23.

The urban employment picture has also been dam-aged by the lack of foresight or equitable planning insuburban growth. Major employers, including theFederal Government, have relocated thousands of jobsin suburban areas without consideration for the hous-ing or transportation needs of low-income or minorityemployees. The testimony of numeru..s witnessesemployers as well as employees and unemployedevidenced the fact that job opportunities in suburbiago unfilled while unemployment rolls in the centralcity grow longer. Costly, time-consuming, and other-wise inadequate transportation between city and sub-urb has proven no substitute for the opportunity tolive reasonably close to one's place of employment.

The problem stems in large part from local zoningpowers. While wooing industrial plants to suburbancommunities, local authorities have simultaneously ap-plied land use controls to exclude or tightly limit low-cost homes and apartments. In some areas, existingblack residential neighborhoods have been rezonedcommercial to force their dissolution. Municipal vetopower over rent supplement housing is another mightyweapon in the zoning arsenal. Because the exercise ofthese local powers affects other parts of the metropoli-tan area, the Commission sees a dire need for asupervening authority over community land use con-trol.

One approach which the Commission recommends isthe enactment by Congress of legislation establishingmetropolitan-wide housing and community develop.ment agencies in every State. The agencies' purposewould be io guarantee the availability of housing atall income levels and without regard to race through.

66

out the metropolitan area. (Details of that proposalare included in the recommendations.)

The Commission's other recommendations are ad-dressed to the executive branch. Although the FederalGovernment has recognized the suburban problem, ithas done little to solve it. Neither HUD nor theDepartment of Justice has enforced existing antidis-crimination laws vigorously or effectively. The housingsection of the Justice Department's Civil Rights Div-sion, which is responsible for enforcement of the TitleVIII antidiscrimination provisions, has only 25 law-yers to handle what is supposed to be a nationwideeffort. In 1971, HUD promulgated "affirmative mar-keting guidelines" requiring developers of new FHAsubdivisions and multifamily projects to adopt affirm-ative programs, including the hiring of minority salesand rental agents, to assure the marketing of housingto all races. But the regulations established no mecha-nism to guarantee that such plans will actually becarried out.

Unless the Federal Government undertakes a deter-mined effort to enforce Federal antidiscriminationlaws, city-suburban polarization will continue and thecycle of urban poverty will perpetuate itself uninter-rupted and unabated. While the time has long passedfor assessing blame, it cannot be denied that Federalagencies share with local authorities, the housing in-dustry, and its related professions a moral and legalresponsibility for having created a problem which willnever solve itself. The task now is to employ the toolssuggested, and to make better use of the tools at hand,t- break the suburban "noose" and put an end toAmerica's increasIng racial polarization.

Findings

1. Minorities. particularly blacks, have been largelyexcluded from the development of the Nation'ssuburban areas.

2. This exclusion was created primarily by explicitdiscrimination in the sale and rental of housing.

3. This exclusion is perpetuated today by both ra-cial and economic discrimination. Economic dis-crimination is often intentionally directed at, andfalls most heavily upon minorities, whose incomesgenerally are significantly below the national av-erage.Suburhanization has been accompanied by themovement of the affluent, primarily white popula-tion to the outer rings of the country's metropoli-tan areas, the so-called "white nooses" that nowmark the point at which the city limits end andsuburbia begins. Central cities often have beenleft racially and econornif -Illy isolated and finan-cially deprived. This process also has:a. prompted a movement of business and indus-

try to suburbiaa movement which fre-quently results in minorities being excludedfrom suburban job opportunities, owing totheir inaccessibility;

b. caused cities increasingly to find themselveswithout financial resources to meet the needsand demands of their residents;

c. led to decreasing economic resources in thecity and a concomitant inability to devotesufficient resources to school financing;

d. resulted in the continued growth of raciallysegregated school systems in metropolitaoareas.

5. Since the hulk of new housing is being con-structed in suburban areas, the exclusion of mi-norities from the suburbs diminishes their hous-ing alternatives and often forces minorities to livein substandard inner city housing.

6. The private sector has been a major contributorto this racial and ethnic polarization.a. Private real estate practices continue to rein-

force the existing dual housing marketanexclusionary device based upon racial andeconomic prejudice and aimed at minorities.Among these practices are steering, failure toadmit sufficient black brokers to white realestate boards, control of listings, and reluct-

4.

ance of brokers to establish affirmative mar-keting procedures.

b. Many financial institutions, such as banksand mortgage lenders, have discouraged inte-grated community development both by re-strictive practices and by lack of affirmativeprograms in granting loans to minorities whodesire housing in suburban areas.

c. The homebuilding industry, on the whole, hasnot made an adequate attempt to market hous-ing in a nondiscriminatory manner.

d. Corporation officials generally have failed toconsider the effect of corporate site selectionupon low- and moderate-income employees, apractice which often results in disproportion-ately reducing minority employment.

7. Suburban governments have acted almost exclu-sively in their own economic interests, often tothe detriment of the central city and of the metro-politan area as a whole. Such devices as exclu-sionary zoning, failure to enact or enforce fairhousing ordinances, and failure to utilize Federalhousing assistance programs have been the mech-anisms for preserving insular suburban interests.Thus, white homeowners often were able to pur-chase moderately priced suburban homes in the1940's and 1950's when such housing was deniedto minorities. Today, this exclusionary pattern isperpetuated by those communities which seek tokeep out further moderate-income developmentthrough these devices.

8. Past policies of the Federal Government, whichopenly encouraged racial separation, were instru-mental in establishing today's patterns of racialpolarization. Present policies of racial neutralityor of encouraging racial integration have failedto alter racially separate patterns.

9. Present Federal programs often are administeredso as to continue rather than reduce racial segre-gation.a. Although Federal-aid highway programs have

facilitated the movement of jobs and housingto the suburbs, responsible Federal highwayofficials have failed to use the leverage oftheir massive trust fund monies to alter exclu-sionary housing patterns in suburbs.

b. Federal programs involving housing loans

67

and guarantees are creating even more wide-spread housing segregation, rather than pro-moting equal housing opportunities.

c. The Federal Government has failed to requirethat Federal contractors consider the availa-bility of nondiscriminatory low-income hous-ing for their employees prior to selecting asite for a new facility.

d. In selecting sites for Federal facilities, theFederal Government only recently has begunto give priority to communities with an ade-quate supply of nondiscriminatory housingfor Federal employees.

10. Despite its past responsibility for today's racialpolarization, the Federal Government has failedto take adequate measures to enforce fair housinglaws.

68

a The Department of Justice, whose functionis limited in the enforcement of Title VIII,t as been handicapped by inadequate staffing.the Justice Department has failed to take asufficiently active role in coordinating TitleVI enforcement among Federal agencies.

b. The Department of Housing and Urban De-velopment has been similarly understaffed andconfined in its activities to answering com-plaints. Until recently, HUD did not conductsystematic reviews of HUD-funded programsfor compliance with Title VI of the CivilRights Act of 1964. Further, HUD has failedto use its own programs adequately to pro-mote fair housing, as required by Title VIIIof the Civil Rights Act of 1968.

Recommendations

1. Metropolitan-Wide Residential Desegregation

Congress should enact legislation aimed at facilitat-ing free housing choice throughout metropolitan areasfor people of all income levels on a nondiscriminatorybasis, thereby reducing racial polarization. This legis-lation should provide for the following requirementsand conditions:

a. Establishment of Metropolitan Housing and Com-nzunity Development Agencies

Each Stott -hould be required, as a precondition tothe tcceipt of future Federal housing and communitydevelopment grants, to establish, within 1 year, severalmetropolitan housing and community developmentagencies in each metropolitan area within its bordersor to create a single State metropolitan housing andcommunity development agency with statewide author-ity. Funds should be provided to the State to financethe planning, establishment, and operation of theseagencies.

b. Representation on Metropolitan Housing andCommunity Development Agencies

Each political jurisdiction in a metropolitan areashould be represented on a metropolitan housing andcommunity development agency. Such representationshould be based on population, with provisions forrepresentation by minorities and economically disad-vantaged groups.

c. Powers and Duties of Metropolitan Housing andCommunity Development Agencies

11 Develop within 3 years a plan governing thelocation of housing at all income levels throughout themetropolitan area. Among the criteria which the planmust satisfy should be the following:

(a) Housing at various prices and rents will bereadily accessible to centers of employment.

(I) There will be adequate transportation andcommunity facilities.

(c) The plan will broaden the range of housingchoice for families of all income levels on anondiscriminatory basis.

(d) The plan will facilitate school desegregation.(e) The plan will assure against placing a dis-

proportionate share of lower-income housingin any single jurisdiction or group of juris-dictions.

HUD should be directed to review and approve

each plan to determine consistency with the legislativecriteria and feasibility in achieving them.

(21 The location of all housing--nonsubsidized aswell as subsidized, conventionally financed as well asFHA or VAshould be subject to the metropolitanhousing and community development agency plan.

(3) Metropolitan housing and community develop-ment agencies should be granted power to overridevarious local and State laws and regulations, such aslarge lot zoning ordinances, minimum square footagerequirements, and building codes, which impede im-plementation of the plan.

(4) Metropolitan housing and community develop.ment agencies should be authorized to provide hous-ing pursuant to the metropolitan plan. They should beexpressly authorized to act as local public housingauthorities and should be made eligible for participa-tion in federally-subsidized housing programs, as wellas market - priced housing programs, both FHA/VAand conventionally financed. It should be specifiedthat metropolitan housing and community developmentagencies may provide such housing only to the extentthat the traditional housing producers (local publichousing authorities, builders, nonprofit sponsors, etc.)are not doing so.

(51 Applications for funds under various commu-nity development programs which have housing impli-cations, such as those administered by the Departmentof Transportation, the Department of Health, Educa-tion, and Welfare, and the Environmental ProtectionAgency, as well as the Department of Housing andUrban Development,346 should be subject to approvalby the metropolitan housing and community develop-ment agency for consistency with the metropolitanplan. Such approval should be made subject to reviewby the Department of Housing and Urban Develop-ment.

d. Reimbursement CostsFunds should be provided to reimburse local juris-

dictions, including central cities, for added costs, suchas those involved in financing education for the in-creased number of children of low- and moderate-

"a' For example, the highway program of DOT, 23 USC $109; waterand sewer program of HUD, 42 USC §3101 as amended (Supp. V,1965-69), and open space program of HUD, 42 USC $1500 asamended (Supp. V, 1965-1969).

69

income housing in the community resulting from im-plementation of the metropolitan plan. Local jurisdic-tions claiming such reimbursement should be requiredto provide a detailed accounting of the amount ofincreased cost and how it has been incurred. Thiscould be accomplished through extension of existingFederal programs which give financing aid to educa-tional agencies which have sudden and substantialincreases in pupils because of Federal action (exam-ple: Public Law 81-874, impact aid.)

e. Affirmative MarketingBuilders and developers of all housingunsubsi-

dized as well as subsidized. conventionally financed aswell as F'HA or VA--should be required to developaffirmative marketing plans for minority homeseekersand submit them to the agency. These plans shouldinclude the establishment of numerical goals for mi-nority residence. based upon a realistic evaluation ofminoriti housing need at different income levels.

f. !lousing Information CentersEach metropolitan housing and community develop-

ment agency should establish offices readily accessibleto neighborhoods with a high proportion of minorityOr lower-income households to provide informationconcerning the location of housing covering a widerange of i iconic levels.

g. The local approval provisions governing the pub.lie housing and rent supplement program should beeliminated.

Continuing veto power at the local level couldthwart the new agency's purpose.

2. Securing Employment Opportunities

The Office of Federal Contract Compliance shouldrequire contractors and subcontractors, as a conditionof eligibility for Federal contracts, to demonstrate theadequacy of nondiscriminatory low- and moderate-income housing. in the communities in which they arelocated or propose to relocate, to meet current andprospective employee needs. In the event the supply ofsuch housing is not adequate, contractors and subcon-tractors should be required to submit affirmative ac-tion plans, including firm commitments from localgovernment officials, housing industry representatives,and civic leaders, that will assure an adequate supplyof such housing withirt a reasonable time followingexecution of the contract. Failure to carry out the

70

assurance should be made grounds for cancellation ofthe contract and ineligibility for future Governmentcontracts.

3. Federal Enforcement Efforts

a. Department of JusticeThe Civil Rights Divisionof the Department of Justice should increase its hous-ing section staff and initiate more actions directedagainst restrictive land use practices and other formsof systematic denial of equal housing opportunity. TheDepartment of Justice also should require an -Federalagencies subject to Title VI of the Civil Rights Act of1964 to adopt strengthened and uniform regulations.

b. Deportment of Housing and Urban Develop-mentAs the leader of the entire Federal fair housingeffort, the Department of Housing and Urban Devel-opment should employ an adequate fair housing staff,expand programs to provide funding for groups work-ing in the area of fair housing, and conduct increasedreviews, including community-wide reviews, of the im-pact of its programs upon racial concentration.

c. Federal Financial Regulatory Agencies-.--All Fed-eral financial regulatory agencies should require thatsupervised mortgage lending institutions take affirma-tive action to implement the prohibition against dis-crimination in mortgage financing in Title VIII of theCivil Rights Act of 1968. The agencies should requirethe maintenance of racial and ethnic data on rejectedand approved mortgage loan applications to enableexaminers to determine compliance with Title VIII.They should also require mortgage lending institutionsto include nondiscrimination clauses in their contractswith builders and developers.

4. National Policy

In addition to the foregoing, the Commission rec-ommends the adoption of a national public policydesigned to promote racial integration of neighbor.hoods throughout the United States. To implementsuch a national public policy, the Congress shouldenact and the President should approve legislationdesigned to provide suitable subsidies, either throughproperty tax abatements, income tax deductions, directpayments, or other such inducements to individualsand families of all races who voluntarily purchasehomes in areas that will accomplish such an objective.

Additional Statementby

VICE CHAIRMAN STEPHEN HORN

For a decade congressional hearings, Presidentialcommissions, and scholarly studies have delineated theplight of minority Americans as they have soughtaccess to the burgeoning suburbs which increasinglysurround our deteriorating central cities. The latestvolume in this literature by the United States Commis-sion on Civil Rights is testimony that what needs to bedone has not been done.

In addition to the recommendations which my col-leagues and I have made, at least two further pointsneed emphasis. First, there is an immediate need toput the Federal administrative house in order if na-tional policies which relate to adequate education,employment, and housing for our people are to beimplemented effectively. To speak of this interrelatedtrilogy has become almost trite, but the interrelation-ships are nevertheless true.

Our hearings in St. Louis, Baltimore, Washington,D.C., and elsewhere are replete with evidence of thefailure of both intra-agency and interagency coordina-tion to achieve the goal of decent schooling, a payingjob, and sufficient shelter for the low-income andminority citizen. If these real human problems are tobe addressed by President, Cabinet officer, bureauchief, and civil servant, I would suggest that as a start'icy begin by reading portions of the transcript of theWashington Hearing held June 14-17, 1971 (seepages 153-155; 251-254; 306-307; 322-325; 341-344, 359-361; and 368-369, among others). Thereand in earlier hearings was revealed a trial of delayand inertia which confronts developer, financier, andbuilder, local, State, and Federal officials, and tenantand homeowner alike.

It is obvious that too often there is great resistanceto proposals for imreased Federal coordination fromsome vested interests in congressional subcommittees,the private sector, and the Federal bureaucracy itself.

71

But if the interrelations which must he addressed areto be defined and resolved so that houses and apart-ments can be built for those who are economically andculturally deprived, then casual Federal coordinationmust be replaced by vigorous Federal coordination inboth Washington and the field.

The President's instincts were correct early in 1973when he sought to designate a particular Cabinetofficer to coordinate the activities of several depart-mental colleagues in related areas. There is also aneed for a White House presence in the field so thatFederal activities in a region can be brought togetherin accord with the President's policies. Congressshould provide the President with sufficient authorityto reorganize and bring together related functionswhich now exist in various departments and agenciesso that he can do the job which the American peoplehave elected him to do.

The second point which needs emphasis is that aswe consider the tragic plight of millions of Americanswhose only limit to access to suburban America inhousing and jobs too often seems to he that the shadeof their skin is less than lily white, we must also addanother factor: the problems of simply being poor andlacking the cultural background and family impetus tosecure an education with which one can attempt to geta job and earn the money to acquire adequate hous-ing.

Testimony was received by the Commission that inthe Miami Valley region of Ohio the major migrationwas by Appalachian whites, not blacks, and that itwas more difficult to place the former than the lat-ter.''' Because of family pride and a lack of empha-

347 Washington Hearing at 24.

72

sis on problems of class as well as race, often therural-oriented Appalachian white found it more diffi-cult to secure aid than did the more urban-orientedblack.34'

These problems of race and class were noted by themayor of Cleveland, Carl B. Stokes, who recalled the"great and fearsome resistance" when he sought "toput low-income housing into the white areas" ofCleveland. He added a point which is often over-looked: " . . . I faced not only resistance but some ofthe most personal vilification not one degree less, andin some respects much more, when I went to put low-income housing for black families in the middle-in-come black areas in Cleveland. ": 49 The latter wasclearly a case of "class" not "racial" discrimination.

It is time that the Federal Government and Ameri-cans generally faced up to the need for economic andclass desegregation in schools, jobs, and housing. Inour zest to make up for the oversight of two centurieswith regard to racial, color, and now sexual discrimi-nation, we have ignored for too long the enormity ofthis task and the difficulties in achieving progress inschool, employment, and housing desegregation if wedo not recognize all the discriminatory factors whichexist. The attempts to view the whole picture of eco-nomic and class discrimination have been few andhave usually met with the same opposition as attemptsat racial desegregation.35° It is essential that we faceup to this problem,

34" Id. at 33.349 Id. at 214."A See D. Hubert, Class . . . and the Classroom: The Duluth

(Minnesota) Experience, Saturday Review, May 27, 1972, at 49,55-58.