President Obama, Address the Real Causes of Black Poverty
The Obama administration has announced plans to redesign the Fair Housing Act with a series of new rules that push communities receiving government funding to use data on segregation in order to meet fair and affordable housing objectives. The original Act has fallen short of fulfilling its promise to better integrate neighborhoods and schools.
The solution is not to redesign the Act, but to address other causes of black poverty.
Former Texas Governor Rick Perry, a Republican candidate for president, said last week that the Democratic Party has failed black communities and “it is Republicans, not Democrats, who are truly offering black Americans a better life for themselves and their children.” Meanwhile, Republicans are in an uproar over the redesign of the Fair Housing Act, deeming it “social engineering” because it requires suburbs to accept public housing developments as a condition of receiving federal funds.
It seems that both the successes and failures of black Americans are chalked up to party politics. But regardless of which party is in power, social engineering has been taking place for generations through laws and regulations that disproportionately harm black Americans. Among these are zoning ordinances that polarize communities, and a monopolistic public school system that results in few quality options for poor Americans.
America’s suburbs came to life after World War II, when the Federal Housing Administration (FHA) recruited builders to mass produce housing developments just outside many of America’s major cities. The United States was experiencing an economic boom, as young men returning from war needed places to raise families. The federal government provided subsidies for white Americans seeking a picket-fenced American dream, but systematically discriminated against black Americans desiring to relocate to the suburbs. Between 1930 and 1968, three out of every five homes purchased were financed by the FHA, but less than two percent of these loans were made available to black Americans. In the years following, the FHA “redlined” black neighborhoods, outlining as them unsafe for investment. However, black areas were labeled appropriate zones to build industrial factories and toxic waste plants. These ordinances ultimately lowered property values for community members, sparking a vicious cycle of poverty within predominately black areas.
This type of discrimination might be expected from an earlier America, but today’s zoning laws continue to produce similar effects. The Standard State Zoning Enabling Act allows municipalities to adopt zoning ordinances that force landowners to observe minimum lot sizes and prevents the building of multi-family homes. Zoning laws restrict the emergence of affordable housing in good neighborhoods with good school districts. Some see zoning ordinances as a product of local demand. But the prevention of private construction on someone’s private property is government force driven by snobbery that prevents the market from delivering affordable housing.
Boston, for instance, has seen some of the strictest zoning regulations since the 1970s. More than half of the municipalities in the greater Boston area zone over 50 percent of their land area for lots sizes of one acre per home or greater. Forty-eight percent of towns with strict zoning ordinances are considered high-opportunity areas. Boston’s Metropolitan Area Planning Council estimates that more than 85 percent of new housing in developing suburbs over the next few decades will be large, expensive single-family houses on lots of one acre or more. Naturally, this will limit affordable housing options. Today, Boston is one of the nation’s most racially segregated cities. According to a study on 2010 census data, Boston has a black-white dissimilarity score ( the index of dissimilarity measures the evenness with which two groups are distributed across an area) of 67.8. A score of 60 on the dissimilarity index is considered highly segregated.
When state-sanctioned discrimination leads to segregated communities, public school systems that do not provide options for school choice only serve to increase poverty in black areas. Those who most benefit from public schools live in higher-income areas, where districts are able to pay teachers more, build better facilities, and in general, spend more money per student. According to a 2014 U.S. Department of Education paper, 45 percent of black students attend high-poverty schools and only 7 percent attend low-poverty schools. On average, black students are six times more likely to attend high-poverty schools than white students.
Our current public school system is effectively a monopoly because public schools do not have to worry about going out of business. When parents are unable to choose their child’s public school, schools have little competition and end up charging higher prices for a lower-quality product. Children in poor neighborhoods end up attending inadequate schools, and so the cycle continues. School choice could exist as a voucher system, individual tax-credits, or as education savings accounts (such as Nevada’s new ESA program).
Giving parents school choice is crucial to improving the black poverty rate. Access to quality childhood education improves IQ scores, creativity, and the likelihood of attending college. According to the National Center for Education Statistics, those without a college degree make an average of 24,600 dollars less per year than people who graduated from college. School choice would provide many poor black students with access to quality education, and increase their chances of attending college.
Some say black communities are rife with self-harming victimization and need to pull themselves up by the bootstraps, but this viewpoint ignores the long list of government mandates and regulations that have impaired black Americans for generations and continue to prevent economic progress. Today, black Americans living at or below the poverty line face huge barriers to social mobility. Success in improving the black poverty rate should focus on removing these barriers, not on merely changing the Fair Housing Act.
Savannah Saunders is a contributor for Economics21.
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