The role of misguided government housing policies in perpetuating racial injustice

Irony Alert: As San Jose and other Silicon Valley cities create offices of Racial Equity, they don't make moves to undo their policies that create racial inequity. Gerald Seib from the Wall Street Journal.

After World War II,the federal government pumped millions of dollars into programs to build houses to develop the soon-sprawling suburbs--but under policies that denied benefits to Black Americans. So houses were sold at a very, very cheap rate that allowed for generational wealth to be developed in the white population and did not in the Black population.

Starting during the New Deal, the federal government, through its How Owners Loan Corp., began underwriting mortgages to allow working-class Americans to keep their homes during the Depression.

But the government wanted to protect its investment by funneling funds to relatively "safe" mortgages--and decided that homes owned by white people, in all-white neighborhoods, were safer investments than homes sold to Black people or in mixed-race neighborhoods.

So mortgage assistance went out specifically to help white people, not Black people. When the Federal Housing Administration was created to expand home-ownership to more Americans, it simply adopted the same policies. Then, crucially, so did the Veterans Administration when it began helpling finance the largest housing boom in American history for soldiers returning from World War II. 

So for decades government policies explicitly helped white Americans build housing capital and denied Black Americans the same opportunity. 

Read the whole thing behind paywall at the Wall Street Journal.

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