Themes
Key
LitCharts assigns a color and icon to each theme in The Color of Law, which you can use to track the themes throughout the work.
De Jure vs. De Facto Segregation
Segregation and the Preservation of Racial Caste
Racism, Profit, and Political Gain
Separation of Powers, Legal Activism, and Minority Rights
Summary
Analysis
Rothstein recalls that the FHA’s justification for denying financing to African American people was its belief that their presence “in or near” white neighborhoods “would cause the value of the white-owned properties to decline,” and in turn threaten the FHA’s own finances by making white people default on their mortgages. The FHA had no evidence for this—it could only site one anecdotal article from the 1930s, which argued that “racial segregation must be an obvious necessity because it [is] a worldwide phenomenon.”
Rothstein has already mentioned this argument, which continues to be frequently cited as an explanation for “white flight” (the phenomenon of white people leaving a neighborhood when African American people move in). If this argument were true, it might be possible to see the FHA’s de jure racial discrimination as a product of its self-interest rather than because of systematic, institutionalized disdain toward African American people. But the FHA’s argument is not true: it was simply an assumption that white administrators converted into an excuse.
Themes
In Part I of this chapter, Rothstein explains that the FHA was simply wrong about black neighbors reducing white residents’ property values. First, middle-class African American people were always forced to pay more than white people for the same housing, which would have “prevented property values from falling” in itself. In fact, a federal court ruled that restrictive covenants made property values fall by preventing African American people from paying more for the same houses and increasing neighborhoods’ value. The FHA itself came to the same conclusion in 1948, as did a study of San Francisco neighborhoods in 1952.
The irony in the FHA’s reasoning could not have been more brutal: had it allowed African American people to buy houses in the suburbs, everyone would have benefitted—these African American buyers would have secured wealth through their homes’ appreciation, and white residents’ home values would have appreciated even faster. In fact, this shows how white people ultimately hurt themselves by implementing racist segregationist policies—even though they justify these policies precisely by claiming them to be economic, not racist, in motive.
Themes
In Part II, Rothstein notes that the FHA’s failure to insure mortgages ultimately caused the same reduction in property prices it hoped to prevent: because black families could not get mortgages, blockbusting (buying at low prices from white people and selling at high prices to middle-class African American people) became a lucrative business. Blockbusters even paid African American people to walk around white neighborhoods or pretend to be interested in buying homes, just to scare white homeowners into selling at low prices. Unable to get mortgages, African American people bought their houses on a contract system, paying monthly without gaining equity. If they could make every payment for 15-20 years, the house was theirs; but if they missed just one, they would get evicted and blockbusters could resell the house. When the FHA saw African American residents move in and then property sale prices plummet, they were seeing the effects of blockbusting, which was itself a response to housing discrimination.
In fact, the FHA and white suburbanites were right about property prices (temporarily) dipping in integrating neighborhoods only because blockbusters took advantage of their racism and economic naivety: blockbusters created a phenomenon (declining property values), then cited that same phenomenon to profit from racism. They also profited from racism on the other end, both because they could overprice homes for desperate African American buyers and because the FHA’s refusal to insure loans to African American people meant that blockbusters could profit off of the vicious contract buying system. Although they were perfectly willing to do business with black people, blockbusters were even happier to support the systematic de jure racial discrimination that multiplied their profit margins.
Themes
In Part III, Rothstein explains how, beyond redlining, this contract sale system used by blockbusters also drove black neighborhoods to deteriorate. A historian whose attorney father defended evicted black residents explained that, since such residents “could [easily] lose their homes,” they did anything possible “to make their inflated monthly payments,” including renting out rooms and avoiding maintenance. The resulting population growth led to overcrowded schools, and in turn to crime, especially when school districts cut black students down to half days. As their neighborhoods worsened and suffered white flight, “black contract buyers did not have the option of leaving” because they needed to finish paying off their houses, lest they lose everything. To add insult to injury, the white blockbusters who sold these homes to black residents on contract often originally bought them through precisely the bank and government mortgages that African American people could not get.
The dangers of the contract sale system further illustrate why access to credit has always been essential to class mobility in the United States: while the availability of trustworthy loans to whites allowed them to pay off homes over time, predatory loans to African American people actually eroded their wealth and chances at class mobility. This differential access to credit was a direct result of government policy, and specifically of the disproportionate allocation of resources to white people and divestment of resources from African American people. This led to the conversion of formerly middle-class neighborhoods to slums, which is yet another reason to conclude that the ghettoization and deterioration of African American neighborhoods in the United States constitutes de jure segregation.
Themes
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