Freedom to Exclude

By Eric FonerSeptember 26, 2021

Freedom to Exclude

Freedom to Discriminate: How Realtors Conspired to Segregate Housing and Divide America by Gene Slater

ANYONE WITH EVEN a passing interest in the history of American politics knows about the election of 1964, when Lyndon B. Johnson’s landslide victory over Barry Goldwater ushered in the Great Society, the high tide of modern American liberalism. Not many, however, have heard of the electoral battle in California that same year over Proposition 14, an amendment to the state constitution that repealed a recently enacted law barring racial discrimination in the sale of housing and prohibited the state from enacting any such law or regulation in the future. On the same day that Johnson carried California by 1.3 million votes, Proposition 14 passed by an even more decisive margin, 2.1 million. The state’s Supreme Court quickly ruled that Proposition 14 violated the federal constitution. But its overwhelming passage revealed that millions of white Americans took for granted the right to live in a racially exclusive community. The triumph of Proposition 14 undercuts the widespread misconception that white backlash against the civil rights revolution arose from the evolution of the nonviolent, interracial campaign for racial justice into urban rioting and Black separatism. It occurred almost a year before the Watts uprising of 1965 and, as Martin Luther King Jr., remarked, “before anyone shouted Black Power.”

In Freedom to Discriminate, Gene Slater, who has spent four decades as a consultant to states and municipalities on housing policy, makes a powerful case that California’s real estate brokers not only originated a system of residential segregation that became a model for the entire nation, but also effectively mobilized support for Proposition 14 by invoking the central idea in America’s political vocabulary: freedom. The issue, they insisted, was not race but white property owners’ “freedom of association,” or, more simply, “freedom of choice.” They described government enforcement of the right of Blacks to purchase a home as reverse discrimination against whites. Providing a template for opposition to an overbearing liberal state, Slater argues, the successful campaign for Proposition 14 laid the foundation for the rise of modern American conservatism.

Slater’s book amply demonstrates that housing segregation is not simply the “natural” outcome of homeowners’ desire to live among people like themselves. It had to be created and continually reinforced. This insight will come as no surprise to those familiar with an extensive literature chronicling a long history of deliberately discriminatory policies by entities both public and private. A key work in launching this cottage industry, Kenneth T. Jackson’s Crabgrass Frontier (1985), shocked admirers of FDR by showing that the Federal Housing Administration (FHA), created during the New Deal to encourage homeownership, systematically promoted residential segregation. Other historians have explored the role of banks, credit agencies, and urban renewal efforts in the creation of segregated neighborhoods and communities.

To these works Slater adds a valuable perspective by emphasizing the crucial role of realtors, by whom he means not everyone who tried to sell a house or plot of land, but a much smaller group: licensed members of local and state real estate associations. Drawing on research in the records of real estate boards as well as realtors’ campaigns to prevent the enactment of open housing legislation, Slater offers a compelling account of how a country with racially mixed urban neighborhoods became segregated. His focus is on California, the country’s largest real estate market, but he insists that where the Golden State led, the rest of the country followed.

Because the Supreme Court in 1917 invalidated a Louisville ordinance requiring that neighborhoods be segregated by race as a violation of the 14th Amendment’s guarantee of equal protection of the laws, most housing discrimination was implemented by private groups and individuals. In California, this meant brokers refusing to show potential buyers properties in mixed areas and homeowners signing written covenants prohibiting the sale of a house except to members of the “Caucasian race.” Although this category eventually expanded to include some Mexicans and Asian Americans, the barriers against Blacks remained impenetrable. By 1960, after a decade of massive migration from the South to cities of the North and West, over 90 percent of the country’s residential neighborhoods excluded Blacks. Residential segregation produced profound differences between the races in the quality of education, the nature of policing, the availability of well-paying jobs, and the siting of environmentally destructive facilities. Slater points out more than once that while realtors’ propaganda insisted that the presence of Black families reduced all homeowners’ property values, the opposite was often the case since with limited market choice, minorities actually paid higher prices than whites for equivalent properties. Blacks’ limited ability to purchase a home made it almost impossible for them to accumulate resources that could be passed on to subsequent generations. Today, the median wealth of white families — with the home usually the largest asset — is 10 times that of Blacks.

Ironically, Slater shows, the promotion of housing segregation originated as part of a broader effort by California realtors to upgrade the image of their profession. In the early 20th century, real estate brokers had a reputation, often well deserved, as scoundrels who cheated honest buyers by misrepresenting the value of plots of land and houses. To counteract this image, realtors established boards that restricted membership to licensed brokers who pledged to follow strict rules. The boards promised to police their own ranks and drive out dishonest operators. They created a system of multiple listings, in which members of the organization had access to each other’s roster of available properties, giving buyers far more choice. They pressed for the passage of zoning laws so that a home owner would not wake up one day to find an industrial establishment being constructed next door.

As part of their effort to guarantee the future stability of residential neighborhoods, realtors promoted residential segregation as what Slater calls a “marketing tool” that ostensibly would protect the value of an owner’s investment by barring sales of homes nearby to undesirable persons. They denied licenses to Black real estate brokers, since access to multiple listings might enable them to sell a house in a white neighborhood to a minority purchaser. In order to maintain segregation, in other words, brokers themselves had to be separated by race. As late as 1960, Slater relates, the country’s 80,000 licensed realtors did not include a single African American.

By the 1930s, the profession’s image had improved so much that government bodies such as the FHA and Home Owners’ Loan Corporation allowed realtors to shape their policies. The FHA refused to make loans or insure home mortgages except in racially homogeneous communities. The presence of even a single Black family in a mostly white neighborhood led to the area being redlined — marked in red on FHA maps as unworthy of loans. FHA officials insisted that their decisions were based purely on an area’s economic viability, not race, so did not violate the constitutional ban on racially discriminatory governmental actions. The FHA financed one-third of all the mortgages in the United States between 1930 and 1960; less than two percent went to Blacks. Thus, nonwhites found themselves trapped in overcrowded urban ghettoes, excluded from the post–World War II suburban boom. In the 1950s, not a single Black family resided among the 60,000 inhabitants of the newly created suburb of Levittown, Pennsylvania, or among the 70,000 in its sister town on Long Island. The system was self-reinforcing. Once racial minorities were confined to a few neighborhoods, these became associated with unemployment and crime, making white homeowners elsewhere even more determined to keep nonwhites out of their communities.

In California, Slater shows, the “central tool” for maintaining residential segregation was the racial covenant, inserted into deeds by realtors and enforced by individual homeowners, neighborhood associations, and, if necessary, the courts. In the 1950s, of 325,000 homes sold in the Bay Area only 50 had deeds or contracts that lacked such covenants. In turn-of-the-century Los Angeles, the small Black population, along with Japanese and Mexicans, lived scattered across the city in racially mixed working-class communities. But racial segregation soon became the norm. Watts, a mixed neighborhood as late as World War II, by 1960 had become 95 percent Black. As new communities proliferated, they advertised their “permanent race restrictions” as a means of attracting white residents. Of course, as Slater points out, realtors could not have spread covenants so widely if they did not reflect existing prejudices.

While Slater places most of the responsibility for implementing residential segregation on realtors, he makes clear that other actors played a part, including, for many decades, the state and federal judiciaries. Almost as soon as the 14th Amendment was ratified in 1868, the US Supreme Court began to undermine it. The justices quickly adopted the view that the Amendment’s promise of equal protection of the laws did not apply to discrimination by private individuals or businesses. On the basis of this “state action” doctrine, the Court in 1883 declared unconstitutional the Civil Rights Act of 1875, which barred racial discrimination by transport companies and public accommodations. In 1919, California’s Supreme Court ruled that while public authorities could not prevent the purchase of a home on racial grounds, this did not prevent private parties such as developers, real estate agents, and community associations from establishing rules about who could live in it. Thus, a Black family that purchased a home covered by a racial covenant could be prevented from moving in. Of course these covenants limited the rights not only of minorities but of white homeowners, who were prevented from seeking the highest price for their property if that meant selling to a nonwhite purchaser. But few whites seemed to complain about this loss of market freedom.

In 1948, with overt expressions of racism having been discredited by the fight against Nazi tyranny and its theories of a master race, the Supreme Court declared racial covenants, including occupancy bans, legally unenforceable. Courts could not penalize property owners who signed such documents and then violated them. But the decision did not actually ban racial covenants and they continued to be attached to housing deeds.

Not until 1968, in the wake of King’s assassination, did Congress pass a national Fair Housing Act. A few months later, the Supreme Court flatly declared all racial discrimination in housing, whether by public officials or private homeowners and brokers, illegal. This marked the end of the state action doctrine as far as housing was concerned. The justices accomplished this turnabout by relying on the 13th Amendment, which had irrevocably abolished slavery a century earlier, and the Civil Rights Act of 1866, a long-unenforced Reconstruction law enacted over Andrew Johnson’s veto under that amendment’s authority. Among other things, the law mandated equal rights regardless of race in the acquisition and disposal of property. The entire way realtors had conducted their business, Slater notes, the Court now deemed a stigma that arose from slavery and therefore illegal as a violation of its abolition. After decades of bitter opposition to open housing, the National Association of Real Estate Boards solemnly informed its members that they would have to recognize that “the Negro in America” was “a free man.” The court’s reliance on the 13th Amendment opened the door to legal challenges to all sorts of racial inequalities as “badges and incidents” of slavery. But after Richard Nixon’s election as president in 1968, the Court turned in a conservative direction. In the half-century since then, almost no 13th Amendment–based jurisprudence has followed.

Deeply researched and clearly written, Freedom to Discriminate offers a persuasive account of realtors’ key role in maintaining housing segregation. More problematic is the book’s companion theme of how realtors, according to Slater, invented a discourse centered on freedom that served as a model for conservative politics down to the present day. Freedom, of course, is the central term in American political language. As Ralph Bunche once noted, “Every man in the street, white, black, red or yellow, knows that this is the ‘land of the free,’ the ‘land of opportunity,’ the ‘cradle of liberty.’” Slater, unfortunately, does not delve very deeply into the historical origins of the realtors’ invocation of freedom to defend Proposition 14. Realtors may have honed the idea that the right to exercise choice in a free market was the essence of freedom, but they hardly invented it. This notion dated back as least as far as the “liberty of contract” jurisprudence of the late 19th-century Supreme Court, in which the justices overturned state laws regulating business practices and labor conditions as violations of the “freedom” of property owners and employers. It was also central to Republican opposition to the New Deal and post–World War II efforts to overturn it.

Nor did realtors invent what Slater calls “freedom to exclude.” Tyler Stovall’s valuable recent book White Freedom shows that in the United States the idea of freedom has long been linked to white racial identity. Certainly, racial exclusiveness was one element of the California dream that drew millions of white newcomers to the state. California in the late 19th century pioneered the policy of Chinese exclusion, on the grounds that immigrants from China were “coolies” whose supposed willingness to work for starvation wages undermined the prospects of free white labor. The state’s Alien Land Act of 1913 forbade immigrants ineligible for naturalized citizenship (that is, Asians) from purchasing agricultural property. The realtors’ contention that expanding the rights of Blacks takes freedom away from whites, prominently featured in the campaign for Proposition 14, also has deep roots in American history. Andrew Johnson invoked it to justify his veto of the Civil Rights Bill in 1866: “[T]he distinction of race and color is by the bill made to operate in favor of the colored and against the white race.”

Perhaps because of its very ubiquity, freedom is an idea whose meaning is always in flux. (One of the more remarkable developments of the past two years has been its expansion to include the right to infect one’s fellow citizens with a deadly virus.) It seems ahistorical to argue, as Slater does, that realtors’ “redefinition of freedom” became the “model for American conservatism as a whole.” Today’s conservative understandings of freedom have many antecedents among business groups, Cold Warriors, anti-government ideologues, and opponents of the Civil Rights movement, among others. And the political rise of the right had many causes, not simply a cynical, racially exclusionary definition of freedom.

How much has changed since the Supreme Court outlawed housing discrimination? The civil rights revolution created a large Black middle and professional class with the economic resources to purchase homes in suburbs and upscale urban neighborhoods if allowed to do so. At the same time, recently arrived immigrants from Asia, Africa, and Latin America have moved directly to previously homogeneous small cities and rural areas rather than to the large urban centers favored by their predecessors. In the past decade the vast majority of the counties in the United States have become more diverse demographically. Nonetheless, studies have shown that real estate agents still steer Black home buyers to a much smaller number of neighborhoods than whites of equivalent means. According to recently released census figures, Levittown, Pennsylvania, is about 85 percent white today, but still only five percent Black. Levittown Long Island is about two-thirds white and one percent Black. In both towns, Asians and Hispanics, apparently less “objectionable” as neighbors, make up most of the remainder. Housing patterns do change, although slowly. Slater writes that today, “segregation of African Americans remains almost as intense as it was fifty years ago.” Unfortunately, he does not try to bring the detailed analysis up to the present.

During his campaign for reelection, Donald Trump (whose father’s housing developments in New York City notoriously excluded Black tenants) essentially promised to abandon the enforcement of housing discrimination laws so that adherents of the “Suburban Lifestyle Dream” would no longer be “bothered” by the federal government. Slater makes clear that this “dream” has long had a racial dimension, thanks in part to realtors, who powerfully shaped the America in which we live.

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Eric Foner is DeWitt Clinton Professor Emeritus of History at Columbia University.

LARB Contributor

Eric Foner is the DeWitt Clinton Professor Emeritus of History at Columbia University. Professor Foner’s publications have concentrated on the intersections of intellectual, political and social history, and the history of American race relations. Foner is a leading contemporary historian of the Reconstruction period, having published Reconstruction: America's Unfinished Revolution, 1863–1877 in 1989 and more than 10 other books on the topic. In 2011, Foner’s The Fiery Trial: Abraham Lincoln and American Slavery (2010) won the Pulitzer Prize for History, the Lincoln Prize, and the Bancroft Prize. His latest book is The Second Founding: How the Civil War and Reconstruction Remade the Constitution (2019).

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