In the astonishingly vanishing chance you missed it, Los Angeles Clippers owner Donald Sterling was banned for life from the NBA by commissioner (and University of Chicago Law alumnus) Adam Silver. I would not mention this save for the remarkable fact that Sterling, and his racist lament unearthed by TMZ, drew attention to… the legacy of 20th century housing discrimination and its roots in Chicago. One of the things that never fails to surprise me about the city is how many roads lead back here.
Why’d that happen? Sterling, a Los Angeles real-estate mogul, has settled two housing-discrimination lawsuits, one in 2005 for an undisclosed sum (but including more than $5 million in plaintiff’s fees) and one in 2009 with the DOJ for $2.73 million. ESPN’s Bomani Jones, who laid into Sterling and the first lawsuit in 2006, expressed frustration that it took a leak of Sterling’s personal views to lead to his ouster. Jones was a close friend of Leonore Draper, the West Pullman activist who was murdered last weekend—after leading a fundraiser to benefit an anti-violence organization founded after the murder of Hadiya Pendelton. In particular, Jones is upset about the disparity between Sterling’s words and actions, and the action taken in response, and he’s hardly alone.
The next person to take up the torch was the Atlantic’s Ta-Nehisi Coates, to whom I’m eternally grateful for developing a deep interest in the history of race, housing, and poverty in Chicago, and especially through the lens of the immense historical and sociological work done in the city. So many of those roads lead back here not just because the city is intensely segregated and because many of the tools of segregation arose here, but because so much data exists about the city. The Chicago School of sociology was dominant throughout the 20th century, so we understand the city as well as any in America, perhaps better.
Coates gives a graphic of incarceration by neighborhood in Chicago and the immense gap between high-majority white and black areas—a graphic from Robert Sampson’s Great American City, a study of Chicago—and writes:
Throughout the 20th century—and perhaps even in the 21st—there was no more practiced advocate of housing segregation than the city of Chicago. Its mayors and aldermen razed neighborhoods and segregated public housing. Its businessmen lobbied for racial zoning. Its realtors block-busted whole neighborhoods, flipping them from black to white and then pocketing the profit. Its white citizens embraced racial covenants—in the ’50s, no city had more covenants in place than Chicago.
If you sought to advantage one group of Americans and disadvantage another, you could scarcely choose a more graceful method than housing discrimination. Housing determines access to transportation, green spaces, decent schools, decent food, decent jobs, and decent services. Housing affects your chances of being robbed and shot as well as your chances of being stopped and frisked. And housing discrimination is as quiet as it is deadly. It can be pursued through violence and terrorism, but it doesn’t need it. Housing discrimination is hard to detect, hard to prove, and hard to prosecute. Even today most people believe that Chicago is the work of organic sorting, as opposed segregationist social engineering.
I would add one thing to this that’s a powerful explainer, and is not unimportant to the discussion about Sterling. The Fair Housing Act was passed in 1968, and very broadly speaking, segregation has measurably declined, but Nancy Denton makes the case that it became much more effective in 1988—among other things, raising penalties and giving the DOJ more powers than it had previously. It’s possible that Sterling would not have been hit, or hit as badly, under the previous, compromised iteration of the Fair Housing Act.
Nonetheless, post-1968, segregation and housing discrimination did improve. At the same time, though, pre-1968 segregation casts a very long shadow for a reason that doesn’t come up in Coates’s post: how it represents a massive destruction of wealth.
Beryl Satter’s Family Properties is an extraordinary account of midcentury housing discrimination in Chicago that is a first-hand look at how this happened. The narrow market created by discrimination—implicit and explicit, legal and vigilante—made some of the city’s worst housing paradoxically overpriced. “In Chicago, my father estimated that 85 percent of the properties purchased by blacks were sold on contract,” Satter writes. “He calculated that by selling buildings to housing-starved African Americans on such exploitative terms, speculators were robbing Chicago’s black population of one million dollars a day. These sales stripped black migrants of their savings during the very years when whites of similar class background were getting an immense economic boost through FHA-backed mortgages that enabled them to purchase new homes for little money down.”
Thomas Shapiro, a Brandeis sociologist, has looked at the nationwide effect of this legacy by focusing on generational wealth instead of the common measure of income. In America, household wealth is largely concentrated in our houses themselves, so homeownership becomes a means of advancing homeownership in the next generation. The less one pays for a better house, particularly one that’s more likely to appreciate, the more one can pass on to the next generation, Shapiro wrote in 2006.
Blacks pay interest rates of approximately one third of a percent higher than whites, or about $12,000 more for the average American home over a 30-year mortgage. Part of this is due to the greater ability of white families to provide larger down payments and even to pay higher service fees for lowered interest rates. From interviews, discussions with bankers, and other data, it appears that many young white families can rely on significant family financial assistance with down payments and other costs. Nearly one-half of all white homeowners report that they received significant financial assistance from their families. In sharp contrast, seven out of eight African-American homeowners purchased homes on their own. This inheritance results from the discriminatory housing markets of a previous era, marked by exclusion and residential segregation and backed by government support.
In 1995, Shapiro and co-author Melvin Oliver calculated that the “mean value of the average white home increased $53,000 in comparison to $31,100 for black homes from 1967-1988.” Between reduced housing appreciation, higher mortgage rates, and lower approval rates, Oliver and Shapiro estimate that the combined cost to black homeowners of that generation was $82 billion.
For those who amassed immense wealth in the post-war housing market, like Sterling, that money could buy much more. Bill Simmons, a Clippers season-ticket holder with many well-placed sources in the NBA, writes: “David Stern looked the other way for decades, waiting for a smoking gun that never came. He knew Sterling, who started out as an attorney and eventually made his billions in real estate, loved courtrooms more than he loved anything else. Fearing the very real possibility of Sterling becoming the NBA’s Al Davis, Stern never messed with him — not even in 2003, 2006 and 2009, when Sterling kept settling those housing discrimination lawsuits and being tied to offensive quotes.”
Coates calls the form of racism exemplified by housing discrimination “elegant racism”; I like Carl Nightingale’s formulation, camouflaged segregation. (Not long ago I talked to Nightingale about why Chicago is inescapable on the issue of housing discrimination and segregation.) Often it lies in patterns of data, codes of law, and bonds of history, sometimes not even requiring an active touch to advance it, but simply continuing under its own force. Donald Sterling’s camouflage was never very good, but the blinds still had to briefly slip for him to be revealed.Edit Module