A key tool to fight housing inequality remains intact

Supreme Court Justice Anthony Kennedy summed up the need to continue to combat housing inequality in the United States succinctly late last month. “De jure residential segregation by race was declared unconstitutional almost a century ago,” he said, “but its vestiges remain today, intertwined with the country’s economic and social life.”

Justice Kennedy’s majority opinion in Texas Department of Housing and Community Affairs v. The Inclusive Communities Project, Inc. upheld the “disparate impact” portion of the Fair Housing Act of 1968. Disparate impact allows plaintiffs to challenge housing-related policies of governments or private entities if they have a discriminatory affect—even if the discrimination is not intentional. The case before the Supreme Court involved a dispute over whether low-income housing for predominately black Dallas residents should be built in the city or the suburbs. In its majority opinion, the Supreme Court upheld the standard that a policy need not be intentionally discriminatory to be challenged, but the plaintiff does need to provide evidence of discriminatory effects.

Given recent research on the persistence of racial and economic segregation over the past two decades, it might be worth a look at how policies affect the persistence of discrimination, whether intentional or not. The report “Neighborhood Income Composition by Household Race and Income, 1990-2009” examines how race and income interact in neighborhoods. Scholars Sean Reardon at Stanford University, and Lindsay Fox and Joseph Townsend at the Center for Education Policy Analysis find that middle-class black and Latino households (with annual incomes around $55,000-$66,000) tend to live in neighborhoods with incomes similar to those in very poor white households (around $12,000) live. Additionally, even high-income black and Latino households do not live in the same kinds of neighborhoods as white households with similar incomes.

At least part of this is because black and Latino middle-class households are more likely to live in neighborhoods that contain a larger proportion of black and Latino residents than similarly economically situated white households. The reasons for this kind of segregation could vary—personal choice and discrimination, intentional or not, come to mind as motivators for the differences. And the court’s defense of disparate impact comes as a boon to those advocates working against segregation.

But how these disparities manifest themselves in our economy are of great importance and must be addressed. If, as Harvard University economist Raj Chetty posits, where you grow up matters for future success, then these disparities could be affecting significant portions of the population more severely than previously thought. That is not to say that mixed-income black and Latino neighborhoods should not exist. But insofar as the households in these neighborhoods are unable to achieve success, policymakers ought to be concerned.

Reardon, Fox, and Townsend point to a growing body of research that suggest that long-term exposure to neighborhood poverty affects child development, educational success, mental health, and adult earnings. This means that black and Latino families, which already have lower average incomes that white and Asian households, may face compounded deleterious effects based on the neighborhoods they tend to live in.

In upholding disparate impact, the Supreme Court took a major step toward preserving more inclusive communities. But given the realities of persistent economic and racial segregation, more must be done to ensure that residents of neighborhoods throughout the country are able to thrive, and to participate in the growth of the U.S. economy.