This is why our schools are still so segregated and what can be done about it
My kids recently started back to their high school, as did millions of other kids across the country. I’m fortunate that they attend public school in a district that is academically strong and fairly well integrated along racial lines. That’s unfortunately increasingly rare these days and it is due in large part to the country’s segregated housing patterns.
If you start learning about housing segregation—meaning the patterns in which whites predominantly live in areas apart from areas in which people of color predominantly live—and how it developed, you learn that concern with “property values” played a big part. It drove both individual and institutional behavior by having what experts call “push and pull” effects. Push refers to the reasons whites leave integrating neighborhoods and pull refers to the reasons why whites are attracted to nonintegrated neighborhoods.
The push effect for individuals refers to the behavior of whites leaving neighborhoods that are integrating because they fear property values would drop, leaving them owing more on their mortgage than the property is worth. For institutions, it refers to insurance and lending industries refusing to insure and lend against properties in integrating neighborhoods for fear of drops in the property values of their collateral. Of course, these are racist and irrational fears because property values actually increase when neighborhoods integrate, but the fears exist nonetheless.
The pull effect refers to the attraction of buying into areas that have increasing property values because it would result in growing home equity even without having to pay down what was owed on a mortgage. There were other factors as well, but this dynamic around property values played and still plays a major role in housing segregation and the major implications that segregation has for schooling, jobs, and other opportunities.
I first started learning about this when I was in law school and it motivated me to work on housing issues both in my first job with the Saint Paul Human Rights Department and through volunteer work with community organizations. But eventually I learned that what people refer to as property values are actually land values. Real property is made up of two parts: building value, which is made up of the labor and material costs that don’t fluctuate very much, and the underlying land value, which is created by what is happening in the surrounding community and which can fluctuate a lot.
I learned that back when these housing patterns were developing in the early twentieth century, a group of influential reformers that included Albert Einstein, Helen Keller, Leo Tolstoy, and Emma Lazarus were pushing a reform that would have helped: they proposed what was essentially a land trust arrangement in which, instead of paying taxes, homeowners paid community rent for the land under their homes while still having title to the house on top of the land.
Under the reform, the homeowner would have to borrow only for the house and not for the underlying land. When it comes to housing segregation, this would have solved a lot of problems. It would have reduced the push effects because there would have been no loan on the part of the home that fluctuates greatly in value, and if the land value by chance did go down, it would just mean the homeowner paid less in land rent. It would have reduced the pull effects because buying into areas of increasing value would have meant that homeowners would pay increasing land rent and the only way to increase home equity would have been to pay down the loan on the structure.
Unfortunately, the reform never caught on and devastating results from housing segregation occurred both for individuals in terms of reduced opportunities and for whole cities like Detroit that collapsed under the strains. But we can learn from history and work on increasing the use of land trust arrangements in housing. Then “property values” won’t be such a concern, and segregation in housing—and in our schools—may become a thing of the past.
Rich Nymoen is president of Common Ground USA, a citizen-based advocacy group for Land Value Taxation (LVT) and rent-sharing land trusts. He has written and contributed to several Georgist articles, including for the MN Journal, the Pioneer Press newspaper, Groundswell, the Progress Report, and On the Commons magazine. A licensed attorney since 1995, Nymoen has a bachelor’s degree in public policy from Stanford University and a law degree from the University of Minnesota. He works for the State of Minnesota in Equal Opportunity.