“The number one source of intergenerational wealth in America is home ownership.” From the 1930s to the 1960s, the federal government enacted policies to actively encourage white families to own homes but discouraged black families from owning them. For instance, in 1934, the Federal Housing Administration (FHA) created a risk rating system to determine which neighborhoods were a safe investment for federally backed mortgages. Black neighborhoods were considered too risky. This labeling was known as “redlining” as the maps used would employ red ink to mark the black, “high risk” neighborhoods.
In 1948, 40 percent of housing developments in Minneapolis had covenants prohibiting purchase by African Americans. This means that blacks couldn’t get federal funding to buy houses in black neighborhoods, and they also couldn’t buy houses in white neighborhoods. As late as 1950, a realtor could lose his or her license if they helped a black family buy a home in a white neighborhood. In addition, the FHA decided it would be a good idea to separate white and black neighborhoods by highways.
The GI Bill
After WWII, the GI Bill provided subsidized mortgages to help millions of men returning from war to buy their first home. While black soldiers were technically eligible for the same benefits, the way the bill was administered left one million black veterans “largely on the outside looking in.” For instance, in New York and New Jersey, new mortgages procured through the GI Bill numbered 67,000, but fewer than 100 of those were for non-white households. In Mississippi, out of 3,200 GI Bill mortgages, only two went to black veterans. (In case you’re curious: That’s 0.14 percent of the New York and New Jersey mortgages for black veterans and 0.06 percent in Mississippi).
The housing disparity had long term consequences. After the war, white families “were able to build home equity, growing wealth for retirement, inheritance, and college education for their kids.” Black families did not get that opportunity.
The War on Drugs
African Americans living in inner cities were extremely vulnerable economically speaking. “The overwhelming majority of African Americans in 1970 lacked college degrees and had grown up in fully segregated schools.”
In the second half of the 20th century, manufacturing jobs moved to the suburbs, and black workers struggled to follow the jobs as they couldn’t live in many of the suburbs. In 1951, for instance, a white landlord sublet an apartment to a black family in Cicero, Illinois (a suburb of Chicago). The white community was so upset that they rioted and set fire to the apartment building. The National Guard had to intervene. Transportation was also an issue. In 1970, only 28 percent of black fathers had access to a car, exacerbating the problem of the moving factories.
In 1970, 70 percent of black men had good blue collar jobs, but in 1987, only 28 percent did. In other words, unemployment in black communities skyrocketed–and with unemployment rising, so did drug use. As drug use increased, so did crime. Vischer makes a comparison to drug use in black communities during this time to white, rural communities struggling with opioid addiction today. But unlike the opioid crisis of today, Vischer says America decided not to treat the drug-use crisis of the 1970s and 1980s as a health crisis, but as a “crisis of criminality,” and “we militarized our response.”
During the Reagan administration of 1981-1991, anti-drug budgets saw a huge swell. For instance, the Department of Defense’s drug budget went from $33 million to $1.04 billion. The 1986 Anti-Drug Abuse Act stipulated mandatory minimum sentences and much harsher punishment for distribution of crack cocaine “which was associated with blacks” than powder cocaine, “which was associated with whites.” The Act also stipulated mandatory evictions from public housing for any tenet who permitted drug-related criminal activity to occur on or near premises. It also eliminated many government benefits, including student loans, for anyone convicted of a drug crime. A revision of the Act in 1988 stipulated a five-year minimum sentence for possessing any amount of crack cocaine, even if there was no intent to distribute. This revision replaced the one-year maximum sentence for the possession of any drug without the intent to distribute.
During the Clinton presidency, between 1993 and 2001, the funding for public housing was cut by $17 billion while funding for prisons increased by $19 billion. The number of Americans incarcerated for drug crimes had exploded. For instance, in 1980, there were 41,000 Americans imprisoned for drug crimes. Today, there are more than 500,000, which Vischer points out is more than the entire prison population of 1980. Most of these arrests are for possession, not distribution.
To make things more violent, we also “militarized our police forces.” Between 1997 and 1999, the Pentagon handled 3.4 million orders for military equipment for more than 11,000 police agencies. In addition to equipping the police with things like bullet-proof helmets, grenade launchers, and M-16 rifles, we also authorized new tactics. Vischer points out the no-knock entry, “when a SWAT team literally breaks down your door.” Incidences of these kinds of forced entry have increased dramatically. In 1986, Minneapolis police performed 35 “no knock” entries. In 1996, that number went up to 700.