Separate and Unequal: The Housing Act of 1968 and the Section 235 Program

Abstract

In recent years scholars have identified racial disparities in wealth and home ownership as crucial factors underlying patterns of racial inequality and residential segregation in American metropolitan housing markets. While numerous federal housing policies have been identified as responsible for reinforcing residential segregation and racial inequalities in home ownership, little research has focused on the segregative effects of the Section 235 program. As one component of the 1968 Housing Act, Section 235 was designed to shift the focus of federal housing policy away from dispensing aid to local housing authorities for building public housing to providing direct supply-side subsidies to the private sector to stimulate home ownership for nonwhites and the poor. Archival and census data, government reports and housing analyses, and oral histories and interviews are used to examine the segregative effects of the Section 235 program in Kansas City, Missouri from 1969 through the early 1970s. Findings indicate that while the housing subsidy program allowed a vast majority of participating white families to purchase “new” housing in suburban areas, most participating African American families purchased “existing” homes located in racially transitional neighborhoods in the inner city. These findings corroborate recent research showing how the market-centered focus of federal housing policy has impaired the ability of African Americans to accumulate wealth through home ownership and reinforced racially segregative housing patterns.