Video Interview: Richard Rothstein

June 23, 2020Interview, Opportunity Zones, Student Blog, TCJA off

Introduction

The Editorial Board of the GGU Tax & Estate Planning Review had originally planned for this interview to serve as the formal launch event of the Journal back in March of 2020. It goes without saying that COVID-19 got in the way of those plans. Thankfully, Submissions Editor Steven Reading was able to connect with Mr. Rothstein via videoconference. What follows is the recording of that conversation.

Interview

Transcript

Bacilio Mendez II: Hello and thank you for joining us. My name is Bacilio Mendez and I’m the Founding Editor of the Golden Gate University Tax and Estate Planning Review. The interview that follows was intended to serve as the formal launch of the review. But, as we are all well aware, the universe had other plans. Thankfully, as a born digital journal our team was able to band together and leverage their collective tech savvy to get you this important and timely interview despite sheltering in place. I want to thank both the editorial board of the GGU Tax and Estate Planning Review for persevering through this challenging time to launch this new venture, and Dean Amy McClelland for giving us the space and freedom to bring this new kind of publication to bear. Finally, if you are watching this interview post livestream event via YouTube, I invite you to check out GGU Tax Review.org to see all that the journal has to offer. Now, I’ll turn the camera over to Submissions Editor Steven Reading for a main event. Steven

Steven Reading: Okay. Okay. Thank you, Bacilio. Richard Rothstein is a distinguished Fellow of the Economic Policy Institute and a Senior Fellow, emeritus, at the Thurgood Marshall Institute of the NAACP Legal Defense Fund, and of the Haas Institute at UC Berkeley. He’s also author of many books, including “Grading Education: Getting Accountability Right” and “Class and Schools: Using Social Economic” and “Educational Reform to Close the Black-White Achievement Gap”, and of the “Color of Law: A Forgotten History of How our Government Segregated America”; winner of the California Book Award and finalist for the National Book Award. Richard, on behalf of the Golden Gate University School of Law and of the Golden Gate University Tax Estate Planning Review, thank you for spending some time with me today. 

Richard Rothstein: Thank you very much. 

Reading: Now in the further the spirit of full disclosure, Richard is grandfather to my children and I’m lucky enough to be married to his daughter, Amy Peterson. So, let’s begin. Let’s start out with you studying education policy. You were National Education Columnist for The New York Times for a spell and spent 25 years as a researcher at the Economic Policy Institute, where you’ve published extensively. What caused you to shift focus from education to the problems of segregation, specifically in housing?

Rothstein: Well, as an education policy analysts, I came to understand that the single biggest problem facing American education was the achievement gap between mostly black and white children, also of low income middle class children. But that achievement gap was driven by the social and economic conditions from which so many disadvantaged children come to school. I wrote many, many articles about this. I won’t go into great detail about it. But for example, I remember writing a column in The Times about asthma. Black children in urban neighborhoods today have asthma at four times the rate of middle class children. They have asthma at four times the rate because they live in more deteriorated buildings, more diesel trucks running through their neighborhood, more burning in the environment, more dust. And when a child has asthma, that child is more likely than the child who doesn’t, not necessarily going to but more likely than a child who doesn’t, be up at night wheezing. Come to school the next day sleepless, drowsy. And I explained in this column that you have two groups of children who are identical in every respect except one group has a higher rate of asthma than other, that group will have lower average achievement simply because they can’t pay attention as well. Not like a big difference. But when you add up all of the social and economic disadvantages that children in disadvantaged neighborhoods come to school with, whether it’s asthma or lead poisoning or homelessness or economic insecurity, you’ve got an explanation for achievement gap. And then I realized that it’s one thing that the child comes to school even with asthma or lead poisoning or homelessness or economically insecure, but what happens with if every child in school, well almost every child who has one of these disadvantages? How can a school like that ever be expected to achieve at the same level as a school where the children come to school healthy and well rested and economically secure environments, secure housing? Well, you can’t expect those kinds of achievement from those kinds of schools to be equal. And the reality is that the schools, where we concentrate children like that, with these disadvantages we call them segregated schools. They’re more segregated today than any time in the last 50 years. And the reason that there’s segregated because the neighborhoods in which they’re located are segregated. So, it let me get to the conclusion that neighborhood segregation was an educational problem and I approached this from that new point. The more I got into it, the more I began to focus on segregation itself and rest is about education lately. But that’s how I got to this. 

Reading: Yes, thank you. Now, your book “The Color of Law” is a result of many years of research. Certainly, as long as I’ve known you you’ve been working on these issues. Someone said that these practices and policies are all history. So, why do we need to be both reminded of them and remember them? 

Rothstein: Well, it was so powerful. The public policies that created segregation in this country and that’s the theme of a book, “The Color of Law.” We have an unconstitutional system in residential segregation because, unlike the popular myth that says that this is all the term we used is that this is de facto – just the result of private activity, the private economy work, bigotry on the part of individual home sellers, or the real estate agent or landlords or economic differences – it turns out that that’s a myth. Of course, all those things existed but without federal, explicit federal policy, state and local explicit policy on the racial basis it created segregation. Those private activities were not powerful enough to create the segregation that we have. And as I say, they were so powerful that they created the conditions that we still experience today. So, for example, the country in the post-World War, mid post-World War II era became a suburban country. We weren’t suburbanized before that. The working-class families, middle-class families, black and white, lived in the urban areas. Suburbanization was a new thing and it was driven by a Federal Housing Administration, a federal government policy. And it was explicitly designed on a racial basis, to move the white working-class and middle-class populations out of urban areas into single-family homes in exclusive white suburbs. This was an explicit racial policy. You and your fellow students and colleagues know these suburbs. They’re all over the country. Here in the Bay Area, places like West Lake, Daly City, San Leandro, San Lorenzo on the East Bay. All of these suburbs were created by the federal government on the explicitly racial basis for whites only and African Americans are prohibited from participating in this. The most famous, or well-known perhaps, example it’s Levittown, east of New York City. 17,000 homes in one place. It’s a crazy idea of the time. Nobody thought in anyone would want to move to the suburbs… 17,000 homes in a single place….the builder of Levittown, William Levitt, or Westlake in Daly City, or Henry Dolger, builders of large developments, like that … in East Bay. They could never have gotten the bank to lend them the money to buy the land to build these homes. The only way they could do it is Levitt and the Dolger and Hyman went to the federal government they submitted, in the post-war years it was the Federal Housing Administration. They submitted their plans for these developments, architectural design materials they were going to use, and a commitment they were not going to sell a home to an African American.  With those commitments, they were able to get federal guarantees for bank loans through proceed with those developments. The FHA, the Veterans Administration, even the required Levitt and Dolger to place a clause in the deed of every home prohibiting resale for African Americans. This was a condition of their getting these bank guarantees. Well, the white working class families who bought those homes were mostly returning war veterans, not all but mostly veterans of World War II, bought those homes relatively inexpensively. Levittown or at Westlake those homes sold for eight, nine thousand dollars. In today’s money that’s something less than a hundred thousand dollars. They were modest homes, 70 to 50 square feet, two bedrooms, one bath homes. But these white working-class families moved out of these suburbs Over the next couple of generations, those families gained wealth. Those families no longer sell for $100,000. May be you can find word in Westlake, but I don’t think so. They no longer sell for one hundred thousand dollars. Levittown is up to three hundred, four hundred, five hundred thousand dollars. Westlake sometimes more. Many places a million dollars, some of these homes. White families have bought those homes with this FHA racial requirement, gained wealth from the appreciating value of those homes. They use that wealth to send their children to college, they used it to take care of the emergency, perhaps temporary unemployment or medical emergencies. They used to finance their retirements and they used to create wealth for their own children and grandchildren, who then had down payments for their own homes. African Americans were prohibited, prohibited from participating in this wealth generating policy, no such wealth. The result is that today, African American incomes on average about 60% to white incomes, African American wealth is about 7% of white wealth. You would think that families with similar incomes would have similar savings. But that enormous difference, between a sixty percent income ratio, and a 7% percent wealth ratio, is entirely attributable to the unconstitutional housing policy they were practicing in the twentieth century. And that’s never been remedied. So, if you want to know what its relevance is today, that wealth gap is the single largest driver of racial inequality. It was created unconstitutionally and requires a constitutional remedy. 

Reading: So you mention that the topic of income suppression, right. Is what we’re talking and how FDR’s New Deal legislation excluded many occupations from traditionally held by African Americans because, in order to gather the votes needed to pass this legislation, his administration had to placate the needs of the white supremacist southern Democrats. I guess, the 1935 National Labor Relations Act is another example of a federally sanctioned unconstitutional behavior. Can you talk about what these dire consequences had? Talk about the dire consequences these policies had on African American wage opportunities and what the long lasting consequences are that’s still being felt. 

Rothstein: Yes, well you mentioned these income policies, like the National Labor Relations Act, the National Labor Relations Board continued to certify unions that excluded African Americans the membership until the 1960s. As you indicated, the Social Security Act excluded occupations in which African Americans predominated, that’s why every culture was excluded from these policies. Fair Labor Standards Act did the same thing. Those policies are partially explained the sixty percent income ratio I talked about before. But on top of that we have this wealth gap which is even more powerful and greater than the income gap. It’s true that in order to get some of these policies passed, Roosevelt had to negotiate with southern Democrats who insisted on excluding African American occupations in which they predominated from coverage of the National Relations Act, the Fair Labors Standards Act, Social Security. But the Social Security Act and the Fair Labor Standards Act and Nationals Relations Act, these are national economic policies. They have to be uniform across the country. Unions don’t exist just in some states. They are international organizations some places. So you can’t have a separate Social Security system that work in the south. We can’t have separate Fair Labor Standards protections that work in the south. So in order to get these passed, Roosevelt did have to make those compromises with the southern Democrats. But that doesn’t explain the housing policies that I described. Southern Democrats, for example, we know that their schools were segregated. They never objected to northern schools being integrated schools, even though they were, so long as they could preserve segregation in southern schools. And by the same token, even if, I’m not suggesting we should have done, even if the Federal Housing Administration required segregation and suburban subdivisions that were financed in the southern states there would have been no objection from southern Democrats. If they did not similarly require segregation, the exclusion of African Americans, from subdivisions that they financed and northern and western states. So you can’t explain these housing policies by the same kind of negotiation with certain benefits that effected these national labor standards policies.

Reading: Didn’t workers live in integrating housing projects, integrated housing projects before the federal government intervened? 

Rothstein: Not projects. But they certainly, we had a lot more neighborhood and integration. Neighborhood diversity in the early 20th century then we have today. I was really stunned, if we were somehow transported back to that period, and see the extent with the urban integration existed. It existed a for simple reason. We were a manufacturing the economy at that time. Factories had to be located near the ports, railroad terminals so they can get their parts and ship their final products. If you have a factory district that is employing both African American and white workers, they had to live in broadly the same neighborhoods so they could walk to work. They did have cars to drive from the suburbs. So we had a lot of downtown urban integration at that time. And the federal government began a policy of segregation in those neighborhoods that hadn’t previously existed. For example, when the Roosevelt Administration first took office, in 1933, one of the first New Deal programs that it implemented was the Public Works Administration that built the country’s first civilian public housing. The very first civilian project, public housing project, the Public Works Administration constructed was in Atlanta, Georgia. Atlanta had the segregated schools and segregated water fountains and segregated buses, but it had integrated neighborhoods. The neighborhood where that project was built, the first PWA project, was called The Flats near downtown Atlanta, was about half white, half black. Public Works Administration built a project there, demolished the integrated housing and built a project whites-only, forcing the African Americans that lived there to find less adequate housing. The great African American poet, novelist, playwright, Langston Hughes talks about him how he grew up in an integrated downtown Cleveland neighborhood. He said he went to an integrated high school, his best friend there was Polish, he dated a Jewish girl. What you expect to see happening in an integrated neighborhood, an integrated high school. Public Works Administration went into that neighborhood in Cleveland and demolished housing and built two separate projects, one for whites, one for African Americas, creating the pattern of segregation there that hadn’t previously existed. And it was reinforced with other similarly segregated projects elsewhere. In my book, The Color of Law, I like to talk where I care, not just about the Bay Area, but others self-satisfied, smug places they think they’re better than every place else. My favorite is Massachusetts, it’s a good example. Maybe you have heard of it.  The area between Harvard and MIT was a fully integrated neighborhood in the 1930s, half white, half black, roughly. Public Works Administration went into that neighborhood demolished housing and built two federally constructed public housing projects in that central square neighborhood between Harvard and MIT, one for blacks, one for whites, creating a pattern of segregation that hadn’t previously existed there. And this took place in many other parts of the country.

Reading: The 1930s was when the government policies separating white and black neighborhoods began in this county? 

Rothstein: Well, yes it began. I’m sorry go on. 

Reading: You say, modern times? Thinking, thinking you know of…

Rothstein: Well, it began because that was the first time the federal government was involved housing policy. It’s not that the previous policies of the different, the federal government was never involved in the housing market prior to the New Deal, prior to the Depression. 

Reading: So it seems to me that the discriminatory actions against African Americans, you were describing, would be unconstitutional. How was it addressed in the courts then?

Rothstein: Very little. First of all, it developed very gradually. The only believing civil rights litigation organization at that time is the NAACP, National Association for the Advancement of Colored People. It was a nickel and dime organization. Mostly nickels. Very, very poor. It got a grant, close to the beginning of the New Deal, to challenge school segregation. But that’s all it had the resources for. Housing segregation, I said didn’t really begin until then. So it crept up, upon the civil rights activists fairly gradually. They were focused on school desegregation, starting out with law schools. So that’s where, they first started. And then colleges and universities and Brown v. Board of Education. There were some suits in the housing area. Thurgood Marshall, who was the first director of the NAACP Legal Defense Fund, wrote protest letters about the FHA’s policy. Protest letters to the Truman Administration about the FHA’s housing policy of creating segregation, refusing to allow African Americans purchase homes in the new suburbs. They finally won a Supreme Court case prohibiting court enforcement of the deeds, that I described earlier, that the prohibited resale to African American, for rental to African Americans. That was in 1948, the Shelly v. Kraemer decision. But that didn’t stop the FHA or other federal agencies from continuing to create segregated subdivisions. It just meant that they couldn’t have these clauses and deed prohibiting the resale. In 1949, there was a vote in Congress to there was an effort to prohibit continued segregation in public housing. The vote loss. And so segregation continued. The federal government used that vote, in 1949, as its justification for continuing to segregate all federal housing programs to exclude African Americans from white subdivisions, even without these deed clauses for the next 15 years. It wasn’t until 1962, when President Kennedy signed an executive order prohibiting federal agencies from subsidizing segregation that the practices of these federal agencies ends. And it wasn’t until 1948, that the Fair Housing Act was passed prohibiting, not just public segregation but, private discrimination as well in housing. So that was the only real significant court decision that was won. 

Reading: So, the ’68 Fair Housing Act made many of those practices illegal, unconstitutional. Why doesn’t that solve the problem then? And can you expand upon what damage had already been done.

Rothstein: Well, of course the Fair Housing Act made it illegal, it didn’t make it unconstitutional. It was unconstitutional from the beginning.

Reading: Yeah. 

Rothstein: But it did make it illegal. But you know, the Fair Housing Act essentially prohibits ongoing discrimination. That’s its main focus. And so consider what I was describing earlier, these subdivisions they now sell for amounts of money, homes in these subdivisions from which African Americans were unconstitutionally excluded, and now sell for prices aren’t affordable. Not just for African Americans working-middle class families, but for whites as well. Nobody can afford these homes, unless they have substantial contributions from parents and grandparents. So it doesn’t do anything to anything to undo the segregation that was created. The Fair Housing Act in effect says to African Americans, okay you can now buy a house in Levittown, West Lake, or any of these other subdivisions. It’s not a completely empty promise but it’s locked in simply because these subdivisions are no unaffordable. Levittown, for example, is now about, I don’t know the most recent figures, but I think pretty close to about 2 percent African American in a subdivision, that I mean, in a broader area around that subdivision it’s about twelve, fifteen percent African American. So that gap between the two percent, which the Fair Housing Act was able to create, and the twelve or fifteen percent that you would expect in a region like that is the result of unconstitutional policies that haven’t been remedied. And they could be remedied. But we don’t have the political will to do it. 

Reading: No, I think we’ll give in to some remedies later on as well. Do you think that America is more ready for the discussion that your book raises? Or more resistant because we’re in a national public health and economic crisis now right now? 

Rothstein: You mean, like, right now? 

Reading: Yeah.

Rothstein: Well, I don’t know. I think the present fury, the future is completely unpredictable. I don’t know what the local health…Yeah, I’ve been doing a lot of, as you know, traveling and speaking about this and… obviously I’m doing some presentations like this. But I don’t know what the future is going to bring. I do know that up, up until the coronavirus shut down of the national economy, the reception to my book was stounding, stounding and unexpected. I have a great deal of difficulty getting this book published. When I tried to get it published initially, publishers and agents weren’t interested because they said well in a post-racial society and nobody’s interest of your stuff anymore. This was back before Ferguson. And then when Ferguson happened, suddenly we weren’t in the post-racial society anymore. That began to be again great interest in, not just the legacy of Jim Crow, but slavery and these legacies. We have, you know, since that time, we have white elected politicians in south going around taking down statues that commemorate the defenders of slavery. We have, not just my book, but the Michelle Alexander’s book the “New Jim Crow”,  Brian Stevenson’s book “Just Mercy.” Many, many other more scholarly books that that address these kinds of issues that were not being published prior to Ferguson. And, so we’re in the new era now. And we’re having a much more accurate and passionate discussion, I think, about racial inequality than we’ve ever had before in our history. So, whether it will resume after we return to normalcy, if we return to normalcy after the coronavirus, I don’t know. I hope, I hope so. We also of course, I’m not denying that, we the resurgence of, well it’s not resurgence, exposure of deep white supremacists pendency in this country. It’s been empowered, encouraged by the President of the United States. But we also have this much more accurate, passionate discussion about race and the two are contending. And I am hopeful that the more accurate and passionate discussion that will lead to remedial action will be more powerful than the white supremacists. 

Reading: I mean, if you remember back to when we had democratic political debates, redlining housing segregation, was talked about on the stage by most candidates. Shouldn’t remedies be part of the DNC platform by now? You know particularly as the perhaps a presumptive nominee Biden relies so openly and heavily on African American votes. 

Rothstein: Well, I don’t think the political basis for action yet exists. So I’m not putting it in the platform to pander to people who understand its necessity. But there is no, even in the most optimistic projections and Democrats, there would not be enough of Democratic majority that would support this in the House and Senate to make any serious remedies feasible. So, I don’t think that the place to start is with the Democratic platform or with politicians. We need a new civil rights movements, a grassroots civil rights movement, that’s going to do, as the civil rights movement in 1960s did, force action on what is it was initially an unwilling country but then eventually became powerful enough to gain victories in areas, like public accommodations, interstate transportation, employment, and many other areas. But it did not address housing. And the even new civil rights movement that is going to address segregation in housing based on recognition of the fact that this is not an accident, not de facto, though it was created by a government. And it’s that that kind of civil rights movement has a resurgence and focus on these issues, then perhaps the Democratic platform or the Republican platform will have remedial policies that are realistic. But I don’t think what 2020 is the time when that will happen.

Reading: Okay let’s take a very quick break here. I want to check the tape and make sure we save the video for file. Okay so we will be right back. Thank you. 

Reading: Okay, thank you for that and welcome back. My guest is Richard Rothstein. His book, “The Color of Law: A Forgotten History of How Our Government Segregated America.” I want to move on to the current, and perhaps contentious, topic of opportunities zones. There are generous tax benefits available for construction in housing and business development and job creation through terminating areas designated opportunity zones by the states following their TCJA and through the final regulations that were delivered in December of 2019. Do you think these policies benefit low-income in traditionally African American neighborhoods? Or are they just modern tools continuing the policies of the past accelerating gentrification and African Americans displacement? 

Rothstein: Well, it have to be examined on the case-by-case basis. I’d say it in some places and not others. But there’s a quite a history of this type of approach, of hoping to create high aptitude neighborhoods out of low-income segregated neighborhoods by giving tax breaks to investors to do that. Back in the 1970s and ‘80s, Jack Kemp, the Secretary of Housing and Urban Development, was advocating these kinds of thing of, enterprise zones. They were implemented in the Clinton Administration. They never worked. They never succeeded in creating revitalize the neighborhoods out of segregated neighborhoods. There’s no reason to believe that, in this case with opportunity zones that, it would be different. In fact, there’s a more reason to think that it won’t because opportunity zones are harder to find under the new law, so much more broadly than enterprise zones were in previous efforts to do this kind of thing. That the mere fact of low-income families living in a part of a broadly defined opportunity zone it gives investors tax breaks you do all sorts of things that have nothing to do with improving the conditions of life of low income families. I’m sure you’ve read about their sports stadiums subsidized on the grounds that they’re located in a broadly defined geographic area where low income people live. So, no I’m not the, this is not the kind of solution I think we should use. Of course, we need to invest in low income neighborhoods to try to improve their resources to make them healthier places to live. And that needs to be done in addition to policies that open up middle-class communities, high opportunity places for diverse residency, both policies need to be pursued. But defining a broad geographic area as a place where investment should be subsidizing because of some low income people may live in part of it, is not, I think, the way we’re gonna solve this problem.

Reading: Yeah, I guess you don’t get low income housing unless you have a zoning rule that prohibits the construction of anything but lower-income housing in the neighborhood. As it goes to gentrification. 

Rothstein: Well, say that again.

Reading: Unless you have a zoning rule that prohibits the construction of anything but low-income housing in the neighborhood, you are going to have property developers that are driven by profit more than social good.

Rothstein: Well, I think gentrification could be a positive thing. It could help to create mixed income communities, which is the only way to make a community healthy. You can’t have, by definition, you can’t have a community that’s all low income that’s healthy. Once you concentrate all that disadvantaged in the single place it doesn’t attract the kinds of resources that you need. So, we should be creating mixed income opportunities in neighborhoods that we previously all low income. But we also need to preserve the right of the people who live in those neighborhoods to remain. Otherwise gentrification simply results in the conversion of the low-income segregated neighborhood into a high income segregated neighborhood. The former being mostly minority, the latter being mostly white. And we know what those policies are. And this is not what opportunity zones do. We need rent control we limits on condominium conversions. We need inclusionary zoning. We don’t want to prohibit all non-low-income housing. But we want inclusionary zoning that ensure that in any development has a mix of low-income, moderate-income, middle-income, and market-rate housing. And we need, we have it in California, but not many place else in the country, we need freezes on property for existing homeowners in order to prevent people from being driven from their homes. Because even though they may have paid them off in full, they can no longer afford to live in them because the surrounding area property values are going up so much that they can’t pay their property taxes anymore. So we know what the policies to control gentrification, not to prohibit it, but to control gentrification are. We’re not following those policies and the opportunity zones has no contribution to make to those kinds of polices. 

Reading: Yep, I do want to move on to some of the fixes and remedies that you and others have discussed. That was a nice segue to that. But first, let me ask you more generally, it seems to me that we have an impossible time coming to terms with the history of systemic racism and segregation in this country. You’ve been working on civil rights issues since at least 1964, as far as I can tell. So when will it be the right time for Americans to address the past in a collective national manner? Is that even possible.

Rothstein: As I said to you, before you put the break. I think we are now having a more accurate passionate discussion about race than we ever have before in our history. As you mentioned, it’s become something of a conventional wisdom in the Democratic debates. The term redlining is a well-known now. People are aware of it and what it meant and how the government created it. So I think there is a broader understanding of this than there ever has been before. Understanding is the first step. Of whether it leads to action, policies can redress segregation is the next step. I don’t know that will happen. But certainly we can’t do the second without the first. So I think we’re in the better position now than ever before. But whether it will lead to real reform, I don’t… I can’t predict. 

Reading: Now Ta-Nehisi Coates recommended reparations after describing some of the kinds of housing discrimination and segregation that you’ve been researching. You call that out as remedies to reparations. Can you explain, explain what you mean by that?

Rothstein: Well personally I think reparations is too narrow. Most people hear the term reparations and what they think of is a single monetary payment for the current generation. It would inevitably be token, it would not solve any of the problems we’re talking about, and this is not a single generation problem. It would take multiple generations to solve it. Further, there are many policies that we need to enact that have nothing to do with monetary payments, in fact many of them are cost free. For example, one of the first things we need to do is we need to prohibit zoning ordinances in high opportunity communities that prohibit the construction of moderate-income housing, of mixed-income housing, housing for low-income families. Many suburban communities maintain their all-white character by prohibiting the construction of townhouses and garden apartments, not just apartments but low level apartments. So for prohibiting those kinds of zoning would not cost anything. It would be a policy we need to enact. And so reparations, I guess you could say that prohibiting those kinds of zoning ordinances is a form of reparations. But that’s not how most people understand the term. By reparations you mean repairing the damages that was done through policies; some of which would be costly, others of which would not. Then sure, I think it’s a good term to use. But if you think of it as simply a monetary payment, I don’t think that’s going to be adequate.

Reading: Some of the other fixes you’re considering are increasing dramatically the value of section 8 rental vouchers, so it’s recipients could afford to live in a better more integrated neighborhood. You know, where do we effectively start? I guess, is what I’m trying to get down to here. How do these efforts become systematically coordinated? 

Rothstein: Well as I said, we have to start developing the political will. That’s the job the new civil rights movement. I think once we’ve done that we’ll need to pursue policies in two different directions. One is opening up high opportunity communities, middle class communities, mostly white places, that have adequate transportation options have grocery stores, that sell healthy foods, that have clean air, opening those up through diverse residences. And that can be done in a number of ways. Abolishing those zoning lines, we talked about before that prohibit even middle-income housing from being built is one thing. But we should be much more aggressive. We talked before, we talked earlier about the Federal Housing Administration’s policy and subsidizing the creation these suburbs that are now unaffordable. But that was a constitutional violation. When the Federal Housing Administration did that it violated the Fifth Amendment of the Constitution. What would be a narrowly targeted remedy? I’m not a lawyer, but all of you guys are. You tell me, if this isn’t the reasonable remedy for a constitutional violation the federal government should be doing. Is buying up houses and places, like Levittown, at market rates. Whether it’s three hundred, four hundred, five hundred thousand dollars and selling them to qualified African Americans for a hundred thousand dollars. That would be a narrow… That’s what they would have cost had those families been permitted to buy those homes a couple of generations ago when whites were permitted to do so. That would be a narrowly targeted remedy in the form of affirmative action in housing. Narrowly targeted remedy to a very specific constitutional violation. So that’s at one end of the spectrum. It would be expensive, more expensive than giving five or $10,000 to individual families. At the other end, there are the policies that you refer to. Actually more important than the section 8 voucher program, is a more powerful policy that the federal government has with subsidizing housing for the lowest income families. And that’s the low-income housing tax credit that’s administered by the Treasury Department. That actually provide much more housing than the section 8 program does. The low-income housing tax credit, the subsidy given to developers, who build housing that’s affordable for the lowest income families, for low-income families, it results in reinforcing segregation today. Because most, not all but most, low-income housing tax credit developments are being placed in already low-income segregated neighborhoods. On a fanciful notion, and it’s even written this fanciful notion into Treasury Department regulations. If you build more low-income housing in low-income neighborhoods, it’s going to revitalize those neighborhoods. And I think it’s nonsense, but that’s the policy that we follow. We should be placing those developments, much more of them and where… Well, we should be doing two things. One is we should be prohibiting the concentration of low income families in these developments. We should be building mixed-income developments that include affordable units and we should be doing it in high opportunity communities. Not just in low-income, segregated communities. But we don’t do it, we don’t do it. Not just because the Treasury Department regulation, we don’t do it because there’s no community opposition for placing low-income housing in low-income neighborhoods. Developers doesn’t have to hold 100 community meetings to explaining why he’s bringing black and brown people in your neighborhood if he wants to build the low-income housing there. The land is cheaper there. It’s easier to rent because potential renters, low-income families, can walk by and see a for rent sign in front. So developers prefer to build and low income neighborhoods. The Treasury Department encourage them to do so. That’s backwards, we should change that policy. Section 8 program is similar. Not all, but most, section 8 vouchers are used in already low-income segregated neighborhoods reinforcing their segregation. We should, first of all, one of the most outrageous inequalities it seems to me in federal policy, is the fact that the section 8 voucher program is not like middle class housing program subsidies, it’s not an entitlement. There’s an appropriation. Roughly a quarter of families who are eligible for section 8 vouchers get them because the waiting lists are closed. And that’s not the way we treat the subsidy for middle class housing. We have a mortgage interest deduction, that’s an entitlement. If you file for a mortgage interest deduction in a middle class community, the federal government doesn’t tell you ‘it’s sorry you can’t get one because the waiting list is now closed’ to get a mortgage interest deduction. But that’s how we handle subsidies for low income families. So that needs to be changed, it needs to become an entitlement. And we need to place a priority in placing those developments, those vouchers, giving people the opportunity to use those vouchers in better neighborhoods than they had the opportunity to. There are a number of ways you can do that. One is you say increasing the amount of the voucher in those neighborhoods. We do that in some places, but not very many.

Reading: Um so, thank you for that. Rumor has it, you’re working on a second book on this topic. What were you focused on this time?

Rothstein: Are you well placed to hear these rumors. 

Reading: I am well-placed to hear these rumors. Rich, I must say.

Rothstein: Well, as I’ve talked and written about this subject of how the federal government created segregation, everywhere I went and spoke about this, people had really two reactions and they were very common, almost every public event I spoke at. First, it was how come I didn’t know about this, I wasn’t taught this in high school. Why I thought, I knew how to this happened, about de facto segregation, how come I didn’t know about this? But we have been talking about it. But the second reaction, is what can I do about it. And so, I am now writing what I will hope will be a manual for a new civil rights movement. I’m not, sadly my importance, I’m not going to be designing it. But contribution to people who want to do something about it through remedies, the kinds of policy we’ve just been describing, as well as actions individuals can take in order to redress the segregation which we are all responsible because it was our government which created it. 

Reading: Yep, yep. Okay, so I’d like to finish up with this question, if I may. So as you talked a little earlier, many years, for many years you’ve written about the achievement gap in education between middle class and lower income students and that gap is greater for African-American and Hispanic families. You recently wrote an op-ed on this topic, in the time of COVID-19. Would you talk a little about that article? And connect us, connect us to how housing segregation and equal access to education are entwined.

Rothstein: I’m sorry, which article are you talking about. 

Reading: The, your op-ed on education and in the times of COVID-19. 

Rothstein: Oh well, you really are hearing a lot of rumors. That hasn’t even been published yet. 

Reading: I’m just, yes. 

Rothstein: Yes, I have a written an article which I hope will be published. Maybe by the time your colleagues have seen this it will be published and you can give them the URL at that time. 

Reading: We’ll respect the embargo terms, don’t worry. 

Rothstein: Well, the argument is that coronavirus shut down is going to blow up the achievement gap, or vastly exacerbate it for a number of reasons. One is there’s already a… the achievement gap, is as you know, is the difference in achievement between disadvantage and advantage children. Children, for example, of more highly educated parents achieve at much higher levels, both cognitively and behaviorally, than children with parents who are less educated. That’s already in the distance. So what happens now, when we segregate. I’m sorry, when we close down schools during the coronavirus and children are required to learn what they’re going to learn at home? Well, parents who are highly educated or running fantastic home schools, teaching children things that their own professional backgrounds have given them insight and access to, giving the benefit of their own educational experience. I have a friend who’s a biologist, she takes her children walking through the woods and they learn about the plants, and the mating rituals of birds. That’s not the sort of thing that parents who are less educated, who live in less healthy neighborhoods can do. So you have some children now getting a much higher quality of education than they were getting in school. Not because the school was inadequate but because most of the teachers are not orienting their classrooms, and shouldn’t be, to the children of highly educated professionals who are learning the stuff at home anyway. And other children who are at home, many of them without computers, without even the ability to access home schooling or curricula online are not getting that. You know that the achievement gap between black and white children is so large that it’s now the equivalent of about two years of schooling. White children on average a achieve at a level of two grade levels above that of black children. Well, if schools are closed down for half the year, which is happening in places like California for example, and some children, more children with more educated parents are getting advanced schooling in that period at home and other children are getting very inadequate schooling at home, if at all. Is that going to blow up the achievement gap by another half year, where we wind up going from the two-year achievement gap to a two-and-a-half year achievement gap? We have lots of evidence that this is going to happen. We know that the homework, for example even in a regular school, school year when schools were in session, homework exacerbates the achievement gap because some children’s parents have much more ability to help with homework than other children’s parents. Not only because of their education levels but, schedules that they are able to have. We know that there’s a big jump in the achievement gap at the end of summer, when children return to school because middle-class children like affluent children have experiences in the summer which advances their education, not just their ability to do basic skills, but their experiences in clubs, advancement in music and  arts. The opportunities that the low-income children, don’t have. So when they return to school in September, the achievement gap is greater than it was when they left in May or June. Well, the shutdowns from the coronavirus are going to just exacerbate those differences.  

Reading: Yep, yep. Okay I think, I think that brings us to our time today Rich. The book, The Color of the Law, “The Color of Law: A Forgotten History of How Our Government Segregated America.” Richard Rothstein, thank you very much. 

Rothstein: Thank you. 

Reading: And to those who tuned in, thank you for your time, your interest, and your support of the Golden Gate University Tax and Estate Planning Review. And if you’d like to dig deeper into these topics that were covered today, please take a look at the bibliography we provided below the video. And if you’re viewing this on YouTube, feel free to head over to GGU Tax Review.org for more. Thank you again, Rich.

Rothstein: Thank you. 

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Bacilio Mendez II is a fourth year Honors JD/MBA student at the GGU School of Law/Edward S. Ageno School of Business and is proud to be the founding editor of the GGU Tax Review. The former Director of Information and Compliance for Benjamin Madison Wealth Advisors, in 2013, Bacilio was named the National Lawyers Guild (NLG) Legal Worker of the Year and was an NLG 2012 W. Haywood Burns Memorial Fellow for Social & Economic Justice (focusing on data visualization of public information). Prior to law school, Bacilio earned a Master of Library and Information Science from Pratt Institute where he served the Kings County Supreme Court, of the New York State Unified Court System, as the 2010 Nathan R. Sobel Law Library Fellow and was inducted into Beta Phi Mu (the International Library & Information Studies Honor Society). Bacilio also holds a Bachelor of Arts in Modern Dance from Oberlin College and is a member of both the Screen Actors Guild‐American Federation of Television and Radio Artists and the Actors’ Equity Association.