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Another Great Awakening? The Case for the Fair Housing Movement’s Revival

Authored By 
Nichole Nelson
Publication date 
August 2, 2017

May 1, 2017, marked a small victory for fair housing activists: Although the Fair Housing Act is generally difficult to enforce, in Bank of America v. Miami, the Supreme Court ruled that cities could now use the Fair Housing Act to sue banks for discriminatory lending practices. This ruling has the power to reinvigorate the Fair Housing Movement.

In Bank of America v. Miami, the Supreme Court determined that Bank of America and Wells Fargo disproportionately targeted people of color with poor credit and little savings, offering them loans for which they were unqualified. Borrowers often tried to modify their loans, but Bank of America and Wells Fargo refused. Consequently, the borrowers defaulted on their loans. 

Massive foreclosures and vacancies in local communities of color ensued. These neighborhoods witnessed a loss of property values and tax revenues. Ultimately, Miami government officials had to spend additional funding on municipal services to aid afflicted residents, which caused the city to lose additional revenue.  

The banks’ questionable actions further proved a longstanding claim that racial discrimination is costly, not just for those affected, but for American society as a whole. Racial discrimination has decimated once vibrant cities like Detroit, with a long history of manufacturing innovation and union activism. Racial discrimination also prevents potential employees from obtaining the valuable skills and resources to compete in the national and global economies, solely due to their race.

Almost as important as the ruling’s potential to hinder discriminatory lending is its potential to revive a once-thriving, national movement to desegregate housing. Many observers have interpreted the ruling’s requirement that cities demonstrate, “some direct relationship between the injury asserted and the injurious conduct alleged” as a high burden of proof and very costly for cities to legally challenge predatory lending. Although this high burden of proof might seem daunting, cities can work together to challenge these practices. 

A potential model for cities like Miami to challenge predatory lending, lies in the Fair Housing Movement. In fact, for much of the twentieth century, a partnership of local, regional, and national organizations comprised the Fair Housing Movement. Its purpose was to open much of the private housing market, which racial residential segregation closed to people of color

These organizations employed legal methods, cutting edge social science research, and moral suasion to challenge the federal agencies, politicians, and realtors who perpetuated practices to prevent people of color, especially African-Americans, from achieving equal access to decent housing. Similar to other facets of the Civil Rights Movement, many of these organizations were guided by the belief that racism was immoral. They hoped to appeal to Americans’ moral sensibilities to achieve open housing.

Community-based fair housing organizations, which received support from civil rights organizations like the NAACP and the Congress of Racial Equality (CORE), and national fair housing organizations like the National Committee Against Discrimination in Housing, National Neighbors, and the American Friends’ Service Committee, helped achieve integration in urban and suburban communities with strong histories of civic-mindedness. Communities like Seattle, Shaker Heights, Ohio and Oak Park, Illinois had white residents who, in addition to believing that segregation was immoral, viewed panic selling and selling homes below market value as threats to their community’s identity and property values, not the prospect of having black neighbors. These communities were mindful of their images and hoped to avoid earning negative reputations as racist, volatile communities. They attracted black homebuyers to their communities with an array of methods, including locating willing white residents who were willing to sell their homes to black homebuyers and working to enact local fair housing ordinances.

Not only did local fair housing organizations try to achieve stable integration in their own communities, but they also participated in grassroots organizing to produce the momentum to compel Congress to enact a federal Fair Housing law. These local organizations partnered with their national counterparts to lobby legislators to enact city and state fair housing laws throughout the 1950s and 1960s, and eventually the federal Fair Housing Act of 1968. This level of local organizing was remarkable considering that, for much of these local and national organizations’ existences, they did not have access to a natural federal ally in the U.S. Department of Housing and Urban Development (HUD), which did not exist until 1965

These organizations’ commitment to creating equitable access to housing in spite of overwhelming obstacles is inspiring. This commitment should also serve as a lesson for cities that effective organizational strategies can help them challenge banks’ predatory lending policies. Grassroots organization is especially useful during the tenure of a HUD Secretary who believes that poverty is a state of mind.

Despite its successes, one of the Fair Housing Movement’s shortcomings was its emphasis on aiding middle-class African-American homebuyers to move into predominantly white communities. Although it was somewhat logical to focus on attracting middle-class African-American families because they could afford the cost of suburban homes, these organizations’ efforts were slightly misguided. These organizations were highly aware that middle-class African-Americans were more palatable to white homeowners than working-class African-Americans, due to their shared socioeconomic status.   

Bank of America v. Miami has the potential to redress the Fair Housing Movement’s failure by attempting to achieve both socioeconomic and racial integration of America’s cities. It has the capacity to prevent banks from stripping communities of color of valuable economic resources. While integration can serve as a tool for some middle-class African-Americans to become homeowners and access to better schools, employment, healthcare, and even healthier food, the Court’s ruling has the potential to create a coalition to invest resources into historically under-resourced communities. If cities like Miami can partner with other cities, like Oakland and Los Angeles that have found similar patterns of discriminatory lending, perhaps these cities can lead the way for a more inclusive Fair Housing Movement. This new Fair Housing Movement can encourage true compensation for past practices and create a blueprint for a more inclusive American society.

Nichole Nelson is a doctoral candidate in History and an ISPS Graduate Policy Fellow at Yale University who studies fair housing policies.

Blog contributor 
Policy Fellow
Area of study 
Urban & Housing Policy