Contributor Post Created with Sketch. Recommended by Ricochet Members Created with Sketch. Autumn Colors: The Color of Law, an in-depth review


When people are free to associate as they please, we can’t be surprised if they sometimes self-segregate. People self-sort along many affinities, including ethnic affinities. This is what lawyers call de facto segregation, and it’s none of the law’s business. De jure segregation — segregation imposed by law, including segregation promoted by public policy — is, on the other hand, very much the law’s business.

In 1866, Congress passed a Civil Rights Act (the 1866 CRA) asserting the equal rights of blacks before the law, including property rights, and real-estate rights in particular. The 1866 CRA warned

That any person who, under color of any law, statute, ordinance, regulation, or custom, shall subject, or cause to be subjected, any inhabitant of any State or Territory to the deprivation of any right secured or protected by this act, or to different punishment, pains, or penalties on account of such person having at any time been held in a condition of slavery or involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, or by reason of his color or race, than is prescribed for the punishment of white persons, shall be deemed guilty of a misdemeanor [emphasis added]

Richard Rothstein’s book, The Color of Law, takes its title from the 1866 CRA, and documents the failure of government housing policy in 20th-century America to honor the promise we made in 1866. It is subtitled A Forgotten History of How Our Government Segregated America. By the 1970s, Americans — including Supreme Court Justices — had already forgotten how extensively the segregation of America’s neighborhoods had been encouraged by “law, statute, ordinance, [and] regulation,” not just by custom. Whether through explicitly racial zoning ordinances first adopted in 1910, or because federal agencies like the FHA and VA mandated, subsidized, and underwrote segregated (and typically whites-only) housing, mid-century segregation was far from merely de facto. Throughout the country, it was also heavily de jure.


Nostalgia might mistake postwar suburban America for a capitalist idyll, but it was really the product of assiduous government planning. It’s easy enough to suppose the whiteness of postwar American suburbia was mostly the result of individual earnings and preference, sometimes admirable (people worked hard for their homes!), sometimes regrettable (bigotry really was a problem), with the “legacy of slavery”, such as it was, already vestigial — and irremediable in any case by anything other than time and black families’ hard work and perseverance. Nonetheless, by 1948, most US housing construction was financed by congressionally-authorized guaranteed bank loans, under FHA or VA approval; and by 1950, half of US mortgages were insured by the FHA or VA. Who would expect the explosion of the “capitalist dream” of suburban homeownership to be underwritten so heavily by government control? Or that this control, exerted by the FHA, VA, and more, would have been so explicitly racial?

Those who know their history, that’s who. And Rothstein knows his history. Non-leftists shouldn’t read The Color of Law for the remedies Rothstein proposes, but for the history he exposes. When Rothstein published some remarks on The Color of Law in Reason magazine, commenters could not help snarking over how un-libertarian Rothstein’s proposed solutions were. Nor could they resist asserting that de facto segregation — resulting from freedom of association — also totally exists (as if Rothstein ever denied it did). Both objections miss the libertarian reason for sharing Rothstein’s work: the de jure segregation of 20th-century real-estate markets all across America has left a lasting mark on the American landscape, on American race relations, and recognizing this mark informs our judgment of how much segregation should truly be attributed to freedom. There is a reason Jacobin magazine hates The Color of Law. Rothstein’s exposure of 20th-century American regulatory history destroys the conceit that American residential segregation is merely the natural accretion of free people choosing in free markets — an accretion proving (as Jacobin would have it) the evils of freedom and the good of governments which prevent it. When the FHA — or any other government body — informs white citizens they can only get loans on artificially easy terms if they agree to shun black neighbors, of course that affects how these citizens, and the private financial institutions serving them, behave.

Properly speaking, government entitlements aren’t rights. Nobody has a right to a government-underwritten house on terms easier than the market would otherwise bear. One might reason from this that laws creating entitlements aren’t about rights at all, and so may be as discriminatory as they please without violating anyone’s rights. And, under circumstances where entitlements are rare exceptions, this reasoning might work well enough. A world of no, or paltry, entitlements might be the libertarian ideal. It might be an American ideal. It is not, however, the world the US housing market has inhabited since the dawn of the 20th century. Instead, 20th-century US housing was permeated by government largesse: largesse at first explicitly, then implicitly, doled out by race, so that for decades — including the decades crucial to the rise of American suburbia — blacks were by “law, statute, ordinance, [and] regulation” denied the benefits whites received.


The federal government first developed public housing in WWI, for civilian defense workers. Consistent with thoroughgoing racist Woodrow Wilson’s success at resegregating the federal government, this housing unsurprisingly excluded blacks. Franklin Delano Roosevelt, tasked with segregating the navy as assistant secretary under Wilson, thus learned segregation from the master — the master in love with the Master Race. The New Deal’s alphabet soup of government agencies, including the PWA, HOLC, the FHA — all involved in constructing, subsidizing, and underwriting US housing — perpetuated Wilson’s racial legacy. These agencies, under color of merely recognizing segregation already existing in society, imposed segregation on US housing from the top down.

HOLC was the institution that started redlining. Literal redlining. HOLC did not simply dare to notice that credit risk may differ by ethnicity. Rather, as Rothstein relates, HOLC — then the FHA, the VA, and so on — assumed what should have been proved, that black and integrated neighborhoods were categorically too risky for the government support so freely given to white neighborhoods. HOLC maps outlined “too risky to bother with” neighborhoods in red. The FHA inherited this “redlining” practice and soon made it ubiquitous.

The redlining instituted by HOLC and the FHA was no mere resigned adaptation to life in an already-prejudiced society. In a society where blacks were generally regarded as inferior to whites, we would expect two individuals with identical wealth and financial habits to nonetheless be treated somewhat unequally by creditors if one was black and one was white. But we would expect the inequality of treatment to be marginal, with evidence of blacks’ creditworthiness being discounted, not ignored entirely.

The federal government’s redlining did not merely discount people’s creditworthiness because they were black, it categorically denied it. Absent FHA insurance, banks would balk at mortgaging homes to anyone with good credit but unimpressive wealth. That’s why, prior to FHA insurance, not even for whites was homeownership the ubiquitous token of middle-class respectability it eventually became. The federales only began promoting homeownership as American — as a patriotic lifestyle available to all but the least prosperous — in 1917, when, panicked by the Russian Revolution and fearing non-homeowners might forsake capitalism for communism, Wilson’s Department of Labor began a campaign insisting homeownership (among whites, that is) was a patriotic duty. The FHA’s decision to underwrite mortgages to whites of a given wealth and creditworthiness who sought housing in white neighborhoods, but not to blacks with as good or better financial standing, or even to whites seeking housing in integrated neighborhoods, wasn’t just a federal financial penalty against black families and integration, it was a federal decision to limit what it promoted as Americanness to white-only neighborhoods.

The belief that the mere presence of blacks in a neighborhood turned that neighborhood into a too-risky “red zone”, even when the blacks’ credit was good, didn’t arise from careful actuarial evidence. Rather, HOLC’s untested belief in the power of blacks to ruin the American dream became the FHA’s untested belief — and then, well, practically everyone’s untested belief, including the belief of private lenders relying on the information and largesse promised them by their government. Federal housing authorities’ prophecy to homeowners, that the financial security of a neighborhood depended on keeping blacks out, was therefore self-fulfilling. Federal de jure segregation amplified and even drove the de facto segregation of private and municipal actors.

White homeowners — or should I say homevoters — wouldn’t have to presuppose black inferiority to panic at the prospect of the government deeming their block too “risky” if black families moved in. They wouldn’t have to presuppose it, but they may very well come to believe it: why, after all, would the FHA warn of dropping home prices and threaten to take away its mortgage guarantees, unless black neighbors were inferior in some way? Why would our government financiers lie about the undesirability of blacks as neighbors?


Central planners’ untested, bigoted assumptions about risk could have been tested and revised for accuracy, much as FICO periodically tests and revises its FICO scoring, most recently for FICO 9. Of course, testing an assumption requires seeing it for what it is — an assumption about reality rather than reality itself. And bigotry is never more entrenched than when it mistakes itself for realism. To the extent the FHA’s assumptions about blacks’ impact on property values can be retroactively tested by today’s research, the assumptions prove false, Rothstein notes. For decades, the FHA

never provided or obtained evidence to support its claim that integration undermined property values.
The best it could apparently do was a 1939 report by Homer Hoyt… explain[ing] racial segregation must be an obvious necessity because it was a worldwide phenomenon. His only support for this assertion was an observation that in China enclaves of American missionaries and European colonial officials lived separately from Chinese neighborhoods…
Statistical evidence contradicted the FHA’s assumption that the presence of African Americans caused the property values of whites to fall. Often racial integration caused property values to increase. With government policy excluding working- and middle-class African Americans from most suburbs… [and b]ecause these middle-class families had few other housing alternatives, they were willing to pay prices far above fair market values…
In an unusual 1942 decision, the federal appeals court for the District of Columbia refused to uphold a restrictive covenant because the clause undermined its own purpose, which was to protect property values. Enforcement, the court said, would depress property values by excluding African Americans who were willing to pay higher prices than whites. In 1948, an FHA official published a report asserting that “the infiltration of Negro owner-occupants has tended to appreciate property values and neighborhood stability.” A 1952 study of sales in San Francisco compar[ing] prices in racially changing neighborhoods with those in a control group of racially stable neighborhood… concluded that “[t]hese results do not show that any deterioration in market prices occurred following changes in the racial pattern.” Indeed, the study confirmed that because African Americans were willing to pay more than whites for similar housing, property values in neighborhoods where African Americans could purchase increased more often than they declined. Ignoring these studies’ conclusions, the FHA continued its racial policy for at least another decade.
In one respect, however, the FHA’s theories about property values could become self-fulfilling. An African American influx could reduce a neighborhood’s home prices as a direct result of FHA policy.

Important as the FHA’s habit of guaranteeing mortgages by race was, it was only part of the story. The FHA also served as gatekeeper for the construction of America’s typical postwar suburban subdivisions, of which “Levittown” (there was more than one) is the canonical example. These subdivisions were typically financed by congressionally-authorized guaranteed bank loans, subject to FHA and VA approval, including racial approval — which meant they overwhelmingly carried a government mandate to be all-white neighborhoods. By 1948, most US housing construction was financed by these congressional authorizations. In 1957, Levittown’s developer, William Levitt, would himself admit that developments like his “are 100% dependent on Government.”


Beyond FHA’s role as gatekeeper to government financing, racial zoning at the municipal level and “slum clearance” at any level of government (often as a federal-municipal partnership) could also invoke the power of the law to penalize black and integrated neighborhoods. So too could selective policing, though for police to politely ignore whites violently driving blacks from the neighborhood was a dereliction of their duty to the law. Public housing, too, played an important role.

It took decades for public housing to become what people picture today: a means of warehousing indigent minorities. At first, public housing was restricted to the non-indigent, segregated not by happenstance, but by mandate, and was a surprisingly common way for working- and lower-middle-class whites to live and earn middle-class respectability. This earning, though, obviously didn’t happen free of government assistance, nor was the opportunity to earn fairly open to all irrespective of race, as can be seen by the Housing Act of 1949, part of Truman’s Fair Deal. Republicans, to defeat this act, proposed as a “poison pill” an amendment forbidding racial discrimination and segregation in public housing, but the act passed unamended. As Rothstein notes, “Many southern Democrats particularly wanted public housing for white constituents in their own districts and states.”

Neither exclusionary zoning nor “slum clearance” has to be racially motivated, of course. We only fool ourselves, though, if we suppose they don’t have a long history of being so — often quite openly. Nowadays, it becomes ever-less permissible to “say the quiet parts out loud”, but especially in the first half of the 20th century, central planners screamed the quiet parts at the top of their lungs, as Rothstein documents. Even our interstate system got roped in. As early as 1938, the federal government began considering aid to highways specifically in order to direct their routes through and around nonwhite neighborhoods, so as to raze and isolate these “slums”. If you’ve ever heard a loon raving about the racism of our interstate system (I know I have), it’s interesting to learn the loon has a point.

The FHA even stuck its fingers in the pie of what should have been purely private neighborhood agreements. If a home’s deed of sale includes a restrictive covenant, arguably that’s none of the public’s business. It becomes the public’s business, though, when the FHA positively recommends homeowners include restrictive covenants, specifically covenants against rental or resale to blacks, as the FHA indeed did. Consider an alternate world where the FHA did not recommend whites-only restrictive covenants, or, following the 1942 court ruling that racially restrictive covenants actually damaged property values in the area, actively recommended against whites-only restrictive covenants. Would these covenants have become as common?


Amid so much other history, the Supreme Court has its own history of teetering back and forth on when the color of the law becomes an acceptable excuse for our government to enact racist housing policy. The 1866 CRA seems to state fairly clearly it’s no excuse, but by 1883, SCOTUS had ruled otherwise, paving the way for Baltimore’s 1910 introduction of race-based zoning, zoning which proved difficult to enforce because of how integrated some regions of Baltimore had already become. Then in 1917, SCOTUS struck down racial zoning in Louisville, only to effectively permit it again, though not explicitly, in 1926 with Euclid v Ambler.

As a reference while writing this review, I assembled what I call Midge’s Massive Timeline (MMT) for a temporal look at how various law and policy justifications fed off one another. You can view MMT here. As late as 1977, SCOTUS upheld the exclusionary zoning of Arlington Heights, IL, despite the zoning having been publicly proposed as a racial measure. It took until 1998 for Miami to stop restricting public housing vouchers to whites. As late as 2008, a federal court ruled mortgage lending still so heavily regulated at all levels of government that it’s impossible for private mortgages to violate civil rights without government complicity. Even so, as early as 1974, in the face of a case presenting considerable evidence that government action has contributed significantly to residential segregation, SCOTUS Justice Potter Stewart attributed the segregation to “unknown and unknowable factors.” Rothstein wrote The Color of Law to remedy forgetfulness like Justice Stewart’s. De facto segregation may indeed involve “unknown and unknowable factors”, but de jure segregation does not, and pretending it does mean forgetting our own legal history.

Non-leftists are bound to sense that Rothstein sometimes overstates his case. Particularly irritating to econ geeks is Rothstein’s repeated intimation that shortages, specifically housing shortages, are things that just happen to economies, only fixable by government policy, rather than being caused by policy itself. If I’m feeling peevish — and what’s a political blog if not an outlet for peevishness — I’ll knock a star off my review of The Color of Law for daring to contain political opinions which annoyingly do not agree with my own. Even then, though, I’m tempted to give this book four stars. The Color of Law is not a perfect book, but it is a necessary one, engrossing and informative. Rothstein’s politics may not match ours, but his spirit is nonetheless refreshing. He explicitly states he will not portray blacks as helpless victims, and that, if legal remedies for de jure discrimination do exist, they cannot be us-vs-them remedies, but remedies that unite all Americans. As he puts it, all of us, as Americans, owe it to ourselves to live in a country where citizens’ constitutional rights are honored.


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There are 8 comments.

  1. James Gawron Thatcher


    Interesting stuff. However, it is important not to lose oneself in the history of discriminatory practices and then accept a modern legally enforced practice that is essentially insane.


    A black couple enters a real estate office and sits down with an agent who also happens to be black. The black couple asks to see houses in a particular price range but only in neighborhoods that have a high percentage of blacks living there.

    If the agent then takes the black client to see three houses all in neighborhoods that have high percentages of blacks living there, then the agent is guilty of the crime of “steering” and could lose his license. That the client asked only to see the houses in these neighborhoods is not a defense.

    You might think that the scenario is a joke or exaggerated for effect. Not at all. This is literally the law in some states. If you are black you are not allowed to be shown only houses that are in black neighborhoods even if that is what you requested.

    Two wrongs don’t make a right. Also, in a fit of guilt going insane is not a solution to anybody’s problem least of all an entire society.




    • #1
    • October 3, 2019, at 8:18 AM PST
  2. Midget Faded Rattlesnake Contributor

    James Gawron (View Comment):
    Interesting stuff. However, it is important not to lose oneself in the history of discriminatory practices and then accept a modern legally enforced practice that is essentially insane.

    James, I think I already addressed this matter in passages such as:

    Midget Faded Rattlesnake: Non-leftists shouldn’t read The Color of Law for the remedies Rothstein proposes, but for the history he exposes.

    • #2
    • October 3, 2019, at 8:22 AM PST
  3. James Gawron Thatcher

    Midget Faded Rattlesnake (View Comment):

    James Gawron (View Comment):
    Interesting stuff. However, it is important not to lose oneself in the history of discriminatory practices and then accept a modern legally enforced practice that is essentially insane.

    James, I think I already addressed this matter in passages such as:

    Midget Faded Rattlesnake: Non-leftists shouldn’t read The Color of Law for the remedies Rothstein proposes, but for the history he exposes.


    I didn’t mean to imply that you somehow were missing any point. I meant it as a general word to the wise. I can still remember when the first “quota-based” decisions came down. A lot of progress for both blacks and whites had already occurred. The irrationality of plunging everyone into this new snakepit of a “solution” was very depressing. I knew it wasn’t going to work and probably would only exacerbate the problem.

    Thanks for this new vital information. Always good to have unless one believes “facts don’t matter”. Your attitude is the one that will give us new insights. The modern left’s attitude only can give us old dogma.




    • #3
    • October 3, 2019, at 9:24 AM PST
  4. Clifford A. Brown Contributor

    Many thanks to @midge for this heroic effort! From cooking, to culture to law, we have it all in the September 2019 Group Writing Theme: “Autumn Colors.” October’s theme is “Trick or Treat!” Treat yourself to a post, nothing tricky about it. Our schedule and sign-up sheet awaits.

    Interested in Group Writing topics that came before? See the handy compendium of monthly themes. Check out links in the Group Writing Group. You can also join the group to get a notification when a new monthly theme is posted.

    • #4
    • October 3, 2019, at 5:59 PM PST
  5. Percival Thatcher

    Clifford A. Brown (View Comment):
    Many thanks to @midge for this heroic effort! From cooking, to culture to law, we have it all in the September 2019 Group Writing Theme: “Autumn Colors.” October’s theme is “Trick or Treat!” Treat yourself to a post, nothing tricky about it. Our schedule and sign-up sheet awaits.

    If nothing else, she’s taken the Bookmarks Sweepstakes. Prodigious! 

    • #5
    • October 3, 2019, at 6:03 PM PST
  6. Ansonia Member

    Midget Faded Rattlesnake, 

    Thank you for writing this fascinating, informative post. 

    • #6
    • October 4, 2019, at 7:35 AM PST
  7. Gary McVey Contributor

    This is a hard-working, wise post, and tough reading for conservatives, because it complicates our ideas about race, American history, and justice. It doesn’t repudiate them, and it doesn’t invalidate all of what we feel and know about the sometimes unpleasant relationship between Blacks and whites. But yeah, if true–and Midge isn’t taken in easily–it means an honest person has to take this new material into account.

    • #7
    • October 4, 2019, at 11:00 AM PST
  8. Midget Faded Rattlesnake Contributor

    James Gawron (View Comment):
    Thanks for this new vital information. Always good to have unless one believes “facts don’t matter”. Your attitude is the one that will give us new insights. The modern left’s attitude only can give us old dogma.

    I do understand what you’re saying. And one critique I would have of Rothstein is that, as sensitive as he is to historical facts mattering (a sensitivity many on both sides could do more of), I think he’s a bit too legally idealistic to fully account for current facts when he advocates, as he does, that

    Midget Faded Rattlesnake: if legal remedies for de jure discrimination do exist, they cannot be us-vs-them remedies, but remedies that unite all Americans. As he puts it, all of us, as Americans, owe it to ourselves to live in a country where citizens’ constitutional rights are honored.

    When he proposes remedies, I believe he is sincerely trying to avoid an us-vs-them approach. But he should not be surprised if remedies he considers unifying strike others as divisive. He is right on the law — that when the law harms, it incurs the duty to rectify the harm. But of course every duty is subject to practical constraints, such as the passage of time, the possibility that even deserved remedies might make things worse under certain circumstances, and so on. As Carl Sandburg said,

    If the facts are against you, argue the law. If the law is against you, argue the facts. If the law and the facts are against you, pound the table and yell like hell

    Rothstein is far from pounding the table and yelling like hell, which these days, makes him a refreshing read. He does have a great deal of law and facts on his side, and he correctly points out SCOTUS decisions since the 70s often had the law, but not the facts, on their side (that is, they correctly observed the law could only remedy de jure discrimination, but failed to recognize how much discrimination really was de jure). But, when he proposes solutions, is he also better at having the law, rather than all practical facts, on his side?

    • #8
    • October 4, 2019, at 11:43 AM PST
    • 1 like