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Measuring the impact of the Fair Housing Act in LA

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Fifty years after the landmark bill was passed, problems it was supposed to fix persist

50 years after the Fair Housing Act, Los Angeles is still relatively segregated.
CharlotteRaboff, Shutterstock

Fifty years ago Wednesday, President Lyndon Johnson signed the Fair Housing Act into law. Meant to end decades of racially discriminatory practices that segregated cities and robbed many non-white citizens of the chance to own homes, the legislation barred property owners from discriminating against renters or potential buyers based on race, religion, gender, disability status, or national origin.

When signing the bill, Johnson stressed that it was only one step in the process of creating a truly desegregated nation.

"We have come some of the way, not near all of it," he said at the time. "There is much yet to do."

A half-century later, we have still only come some of the way, according to Richard Green, director of the USC Lusk Center for Real Estate and a former senior advisor for the U.S. Department of Housing and Urban Development. We interviewed Green and asked him to weigh in on the bill’s successes and failures—particularly in Los Angeles.

“There are things that are better than they used to be,” he says. But the Fair Housing Act “has not remotely achieved the goals that we were hoping for.”

In LA, Green says rates of homeownership among non-white residents are slightly better than in other major cities. Sadly, the city also has one of the lowest rates of overall homeownership in the nation.

“LA has done a little better than the rest of the country, but it’s not good enough to celebrate,” says Green.

What went wrong? Green says that, while the Fair Housing Act is an effective tool for eliminating discrimination that occurs when buying a home, it does little to prevent prejudice on the part of lenders.

“Housing finance explicitly discriminated against people of color for many years in this country,” Green says, primarily through redlining. Now, he argues, discriminatory practices are more subtle.

“The methods we use to do loan underwriting that on their face appear to be race neutral, actually give preference to non-Hispanic whites relative to others,” Green maintains. “First of all, the way we do underwriting, we assume that there’s one to two people in the household that are responsible for mortgage payments. Whereas, very often, mortgages are paid by several generations, or cousins or uncles.”

Green also points out that tens of millions of Americans don’t have credit scores, and are thus unable to secure a mortgage. Those affected by these policies are “disproportionately people of color.”

Restrictive zoning laws may also be keeping Los Angeles relatively segregated.

“You have a place like the Westside, which actually downzoned in the 1960s,” Green says. “And so you have this very expensive land that is confined to being single-family. And that means that unless you have a lot of money or you bought your house a long time ago... it’s very hard for you to live there. So it remains, racially, very much as it was 50 years ago.”

What can be done? On a local level, Green says the first step is addressing a housing shortage that’s led to high rental costs and astronomical home prices.

“There is ample evidence that the absence of building has been a contributing factor to the kind of disappointment that we have at the inability of the Fair Housing Act to fulfill its promise,” he says.

Green says a new state law making it easier to build accessory dwelling units, or back houses, could make a significant impact for many residents by bringing easy density to single-family neighborhoods.

He’s also a supporter of SB 827, a proposed state law that’s set off heated debate among elected officials and housing advocates. The bill would override local restrictions on height and density in areas close to public transit, which Green argues would open many pricey areas up to new residents.

“At the end of the day, we gotta build more stuff,” he says.