It’s been more than 50 years since President Lyndon B. Johnson signed the Fair Housing Act into law, yet many Americans still live in racially segregated neighborhoods.
How come?
Understanding why requires going back to the real estate industry of the early 1900s and following it forward as detailed in the book “Freedom to Discriminate: How Realtors Conspired to Segregate Housing and Divide America” by Gene Slater. That “freedom” argument is not unlike the language heard in the pandemic and issues of abortion and guns, he said.
The Bay Area-based author of the book has served as a senior adviser on housing for federal, state and local agencies for more than 40 years. In his book, Slater has poured over documents to tell the little-known history of how Realtors conspired to divide Americans and preserve white privilege through segregated housing.
He writes that “to this day, about 4 million housing discrimination complaints each year go uninvestigated, and fair housing remains largely unenforced.”
Q: How did Realtors get to be so powerful in the U.S.?
A: Without regard to race, the pure power of the Realtors as an organized group came from an effort to deal with the problem of fraud in real estate. There were no rules, no licensing, or anything else. Realtors were viewed as shysters.
So, here were the most socially prominent leading brokers, who owned yachts and racing horses, with their reputations at stake. They put together real estate boards to organize the field. They believe that their success depended on a small organization of like-minded men, all-white, of course.
They bought into the same system of controlled cooperation rather than no-holds-barred competition. That gave them enormous economic power. They could and did double real estate commissions to 5% in 1911, and made them stick.
When they organized as the voice of property owners, it gave them political power. They used that power to create zoning, state licensing, city planning. By the late 1940s, early ’50s, Herbert Nelson, a former newspaper man-turned-head of the National Association of Real Estate Board, was viewed by Congress as the most powerful lobbyist in the United States.
Q: Your book mentions several key figures, one of which was Spike Wilson. Let’s talk about him. Who was he, and why, as you write in the book, did he quote Lincoln’s Gettysburg Address as a way ‘to oppose’ Martin Luther King and the civil rights movement?
A: Like Herbert Nelson, who ran the Realtors nationally, Spike Wilson’s background wasn’t originally in real estate. His background was in newspapers. In 1962, he was elected president of the California Realtors’ association. This was around the time when JFK signed an executive order saying (Federal Housing Association) insurance can’t be used to discriminate.
So, Wilson wrote a one-page property owners’ bill of rights. It’s a statement of beliefs that says we’re in favor of traditional American rights, circulated to newspapers everywhere in the country and unanimously endorsed at a meeting in Orange County with 2,000 Realtors who say it ought to be part of the state constitution.
He rallied people around the idea of deep patriotic Americanism. He invoked his great grandfather, who was one of the signers of the Declaration of Independence, and then he invoked his mother, who was an immigrant. He used the argument that immigrants made this country a place where they could buy and own things and take control of their lives. The implicit message was that these immigrants didn’t require special rights.
So, he had a great ear for propaganda and defining things in terms of freedom that he then used in the Prop. 14 campaign (that sought to repeal the 1963 Rumford Fair Housing Act, which banned housing discrimination). He took the vocabulary of the civil rights movement and used it against itself.
Q: Proposition 14 proved successful, right? It passed in California in 1964 during the height of the civil rights movement but was ruled by California’s Supreme Court as unconstitutional in 1966.
A: It got 65% of the total vote on the same ballot where Barry Goldwater got less than 40% of the vote. This is the very height of support for American liberalism and the passage of the civil rights law, which sent a message. If you can win in California, a state where (Pat Brown) a liberal two-time governor, had just defeated Richard Nixon for re-election, making fair housing his highest issue, you could win using these kinds of arguments anywhere in the country.
Hence, the litmus test of American individual freedom was the right of an owner.
Q: What about the existing fair housing law?
A: People were scared to enforce it. The battle over fair housing went to Congress, and Lyndon Johnson suffered his biggest congressional defeat in 1966. It finally passed in 1968, days after King’s assassination, but the shadow of that message from Prop. 14 resonated even though it was ruled unconstitutional.
Q: Have we made any progress toward fair housing?
A: I think there’s been some progress. But I get a little frustrated with maps that show people are still segregated as proof. That, to me, shows where people live, but there are other factors. Segregation is about artificial barriers imposed on a racial basis to prevent people from exercising choices.
There are barriers.
A chapter in the book on the legacy of segregation says in 2010, African Americans with incomes of over $75,000 lived in neighborhoods that have a higher poverty rate than White Americans that earn less than $40,000. And Black household incomes in the $55,000-$60,000 range live in neighborhoods with median incomes similar to those of White households earning $12,000. That isn’t by chance.
That’s a lack of choice. To me, that’s the clearest evidence that housing segregation persists.
Q: Do you think the real estate industry should compensate people for creating a system that imposed housing segregation?
A: Here’s what I think. If Realtors wanted to do something nationally to carry out and show their commitment to fair housing enforcement, they could put their money where their mouth is. They could take a 10th of a percent of the amount above the commission on the average home sold in the country and put it into a fund that the National Association of Realtors collected and deposited with state and local finance agencies to provide downpayment assistance to the groups they discriminated against.
About Gene Slater
Role: Author
Book title: “Freedom to Discriminate: How Realtors Conspired to Segregate and Divide America”
Residence: Foster City
Education: Earned degrees from Columbia, MIT, and Stanford, as well as a mid-career fellowship from Harvard.
Work experience: Slater co-founded and chairs CSG Advisors. Its origins trace back to 1979 with the formation of Gressel Gressel and Slater in “a farmhouse on the Mississippi River 20 miles from the nearest Xerox machine in rural Wisconsin.” Today, CSG Advisors is one of the nation’s top advisors on affordable housing.
