On December 4, 2013, then-President Barack Obama addressed the citizenry to tackle economic mobility and the new challenges that lay ahead for the nation. During his speech, he asserted that “zip codes should not determine your destiny”. However, this raises the question of how it is possible to overcome and close a residential segregation gap that has been maintained for much of the twentieth century legally and subsequently endured because of the complexity of repairing centuries of discrimination.

The federal government’s policy of ethnic exclusion had its roots in the early twentieth century. In the wake of the Russian Revolution of 1917, the United States Department of Labor launched under the administration of Woodrow Wilson the “Own-Your-Own-Home” campaign to counter communism. The purpose was to turn as many white Americans as possible into homeowners, with the idea that those who owned property would be invested in the capitalist system. African Americans were cut off from this opportunity for economic growth, as were subsequent public housing programs.

The Second World War hampered access to housing, as all construction material was redirected for military purposes. In response, the New Deal under President Franklin D. Roosevelt created the first public housing in the country for civilians not involved in defence duty. Following previous courses of action, skin color played a leading role in shaping the program. The administration built separate projects for African Americans, segregated buildings or excluded them altogether to further create ethnically homogeneous communities.
Dwight D. Eisenhower, who succeeded Truman as president in 1953, began to reverse the few steps toward nondiscrimination that the previous Roosevelt and Truman administrations had considered. However, following the 1954 Brown v. Board of Education of Topeka Supreme Court decision invalidating “separate but equal” public education, Berchmans Fitzpatrick – general counsel for the Housing and Home Finance Agency– asserted that the decision did not apply to housing.

In 1926, the same year that the United States Supreme Court upheld exclusionary zoning, it also confirmed the restrictive covenants and found that they were voluntary private contracts, not state actions. This record of government regulation expanded institutional ethnic exclusion, through the systematic violation by regulators of their constitutional responsibilities, thus contributing to de jure segregation. In 1934, Congress created the Federal Housing Administration (FHA), which would eventually adopt a program of granting private mortgages at low interest rates. In order to decide to whom to grant such mortgages, the FHA developed a mapping system that classified neighborhoods according to their perceived stability. On these maps there would be green or type “A” areas, under the sole criterion that, as the appraisers claimed, they “lacked a single foreigner or negro”. The lowest category was given to neighborhoods where African Americans lived under the “D” label, whose areas were not considered eligible for FHA endorsement and were marked with the color red, giving rise to the concept of “Redlining.

The most significant direct consequence of this segregationist practice was identified by The Pew Research Center, whose study estimated that white homes are worth approximately twenty times as much as black homes.

Federally endorsed segregation affected the jobs African Americans could access, the schools their children went to, how safe they remained, and whether the value of their home increased. The Federal Home Loan Bank Board did not object to the denial of mortgages to African Americans until 1961. Although housing segregation became illegal in 1968, the discrimination did not end there, because real estate agents and banks were also part of this whole process of institutional racism. Ethnically discriminatory government activities have persisted into the twenty-first century, serving as a major cause of the financial crisis of 2008. Among homeowners who had refinanced in the early 2000s, when the subprime bubble expanded, low-income African Americans were more than twice as likely as low-income whites to have subprime loans, while high-income African Americans were about three times as likely as high-income whites to have subprime loans.

Several cities sued banks for the massive devastation the foreclosure crisis imposed on African Americans, whose average household net worth declined by 53% compared to a 16% loss in white households.

Indeed, it was not only large-scale federal public housing and mortgage financing programs that created de jure segregation. Government actions contributed, for example, to the creation of interstate highway routing to create ethnic boundaries or change the residential location of African American families. Those black families who managed to resist forced displacement had to confront industrial waste zoning, including toxic waste, aimed at turning African American neighborhoods into slums. This practice became increasingly common as the twentieth century progressed and manufacturing operations grew in urban areas.

The pattern was confirmed in a 1983 analysis by the United States General Accounting Office, which concluded that, nationwide, commercial waste treatment facilities or uncontrolled waste dumps were more likely to be found near African American residential areas than white residential areas.

That analysis was substantiated when, in 1991, the Environmental Protection Agency issued a report confirming that it found a disproportionate number of toxic waste facilities in African American communities across the country.

In 2014 journalist Ta-Nehisi Coates (The Case for Reparations) detailed how housing policy and the income gap clearly illustrated how black citizens are still affected by the past. Decades of ethnic segregation kept black families away from white areas, which had better access to education, health, food and other services, while institutionalized discrimination affected the economic development of African Americans. Ethnic segregation led to the creation of separate neighborhoods for whites and blacks, and although these rules no longer apply, in many neighborhoods the same ethnic composition is still maintained.

As a result, residential segregation remains hard to undo for several reasons.
Firstly, because the economic status of parents is commonly repeated in the next generation, so that once the government prevented African Americans from fully participating in the free labor market of the mid-twentieth century, reduced income became, for many, a multigenerational trait. New York University sociologist Patrick Sharkey, who analyzed data on ethnic and neighborhood conditions and reported his findings in his 2013 book Stuck in Place, found that African American youth between the ages of 13 and 28 are now ten times more likely to live in poor neighborhoods than white youth, 66% of African Americans versus 6% of whites. Similarly, 48% of African American families have lived in poor neighborhoods for at least two generations, compared to 7% of white families. Secondly, the value of suburban housing for working and middle-class white families has appreciated considerably over the years, resulting in large wealth gaps between whites and blacks, and since parents can bequeath assets to their children, the ethnic wealth gap persists across generations. Thirdly, by the time labor market discrimination declined sufficiently for significant numbers of African Americans to reach the middle class, housing outside urban black neighborhoods had become largely inaccessible to working and lower middle-class families. Fourthly, once systemic segregation replaced de jure injustice, ostensibly neutral policies reinforced inequality between white landlords and likely African American tenants. Consequently, contemporary federal, state, and local programs have reinforced residential segregation rather than reduced it.

All of the above highlights the need to implement inclusive and diverse urban planning in our cities and human settlements, and also demonstrates the dreadful consequences that can result from its absence. As requested by then United Nations High Commissioner Michelle Bachelet in 2021 before the Human Rights Council, racism requires a “systemic response,” which implies a broad-spectrum strategy to dismantle systems based on centuries of discrimination through a transformative approach that addresses the interconnected areas that fuel institutional racism.