How Racism Has Shaped the Housing Market

As an attendee of the March 21, 2017, Santa Barbara City Council meeting, where we had all convened to address tenant protection issues, I was repeatedly reminded of my late grandfather as I listened to Santa Barbara Rental Property Association (SBRPA) members speak.

My grandfather was an extraordinary person who died from a stroke nearly a decade ago. He was born during the Great Depression and was raised on a small farm in Northern California. He taught himself to drive and repair cars without brakes, all on his own, at the age of 12. He fixed radars on naval ships during World War II, and, after the war, he married my grandmother. They bought a house in the Bay Area, and they raised several children there.

He instilled in me a hard work ethic, informing me that if you want to get somewhere in life, you have to work for it. He was very much opposed to handouts. And his work paid off: He owned more than one property in California and maintained each one with his own hands. He gained wealth from these investments and passed it down to his children and grandchildren when he thought we deserved it.

At the City Council hearing, many Rental Property Association members spoke about hard work, as perhaps my grandfather would have if he were still alive. They touched on the rough realities we all face in the housing market in Santa Barbara, and they all made some great points about fairness and keeping what one earns. But there’s something that stood out to me in that room: Virtually all SBRPA members were white people over the age of 60. We should talk about this.

This demographic reality is relevant, not because white people need to wallow in guilt or repent for some kind of terrible sins we haven’t actually committed. After all, I’m white too. It’s significant because if we fail to factor these demographics into the conversation about housing, we will continue failing to see the whole picture.

My grandfather’s story is pertinent in this context. When he was a child, the housing market had nearly collapsed as a result of the economic crisis. Everyday people weren’t able to make mortgage payments, let alone even consider buying a home. In an effort to mitigate the crisis, the Federal Housing Authority stepped in to help Americans refinance their mortgages by creating several agencies, most notably the Home Owners’ Loan Corporation (HOLC). But the Loan Corporation was very selective about which Americans it would help. In 1934 (10 years after the S.B. Rental Property Association was established), the Home Owners’ Loan Corporation sent assessors out into neighborhoods to look for various factors such as housing stock, physical attributes of the area, and, what they termed, any “threat of infiltration of foreign-born, negro, or lower grade population.”

The federal government explicitly structured racial identity into mortgage lending practices, benefiting white people at the direct expense of communities of color. My grandpa, as exceptionally hard working as he was, also benefited from these racist policies throughout the course of his 85 years of life. He did not work hard to be white; he was just born into it. Whiteness was built into the system as a handout.

This white handout system lasted, in its most detectable forms, until 1968. In that year, the Fair Housing Act was passed on the federal level. This also happens to be the same year the Santa Barbara Housing Authority was created.

But even after 1968, the legacy of white handout systems in housing and other sectors had already generated an entrenched and unbalanced distribution of property ownership, wealth, and savings. On average, black and Latino folks spend nearly half their income on rent compared to one third among whites. White families tend to have seven to 11 times more in savings (which of course comes in handy if you want to buy a house). And despite people of color earning less in wages, spending more on rent, and having less savings, they’re also charged higher mortgage rates when they do beat all these odds and try to buy a house. Obscene disparities between white folks and people of color are also present in life expectancy, health outcomes, educational attainment, job discrimination, and other areas.

When white property owners and Realtors in Santa Barbara take up issue with government regulatory processes that they believe threaten their right to land ownership, it just makes me wonder if they are aware of the degree to which government regulations actually enabled them to become landowners in the first place.

It’s important for me to note here that government regulations aren’t inherently bad. Regulations designed to exclude groups based on belief systems about racial superiority are. If white people in the 1930s were to have included all people in the rule-writing process, the disparities we see today would be far less egregious.

I assume it was never the intention for white S.B. Rental Property Association members to benefit from racist housing policies that, for example, pushed out “threat of infiltration of the foreign-born, negro or lower grade population.” But they did and still do benefit from those policies, as did my grandfather, and as I do today.

As an organization, the Rental Property Association makes an effort to provide trainings to property owners and Realtors on how to comply with anti-discrimination laws, which is significant. But the racist gears of our history continue turning, and it was painful for me to sit there with all other other renters on the floor downstairs, listening to white people over 60 speak defensively to City Council about how they were all nothing more than a bunch of good, hard-working people.

All those older white people were hard workers, but they were not harder workers than anyone else. Emphasis on hard work without emphasis on race is poor analysis. The rules were made so that it would be profoundly easier for white people to get jobs, save money, get loans, buy homes, and put those homes on the market as investments so they could enjoy more leisure, gain wealth, and pass wealth down through the generations.

While I don’t have the answers to the housing crisis, I think that more education and consciousness about how significantly racism has shaped the housing market and “character” of Santa Barbara is necessary. In a multiracial society, we can’t afford to ignore reality just because it elicits some emotional discomfort.

If you are interested in learning more about the problems I describe, check out this article in The Atlantic, reach out to the local chapter of Showing Up For Racial Justice (www.facebook.com/SURJSB), which focuses on how white people can become a part of the solution, or pick up a copy of American Apartheid: Segregation and the Making of the Underclass at a bookstore or online.