Bold Proposal for Minority Housing

This article is the third and final article in my series on housing history and results. The first article, entitled Spatial “Separation Resulting in Racial Segregation,” dealt with the history of systematic racial exclusion built into the mortgage and credit laws and regulations. The second article, entitled “Hyper-Segregation – a Public Created Entity,” addressed that most minorities were squeezed together in the cities far away from white people to create hyper-segregation. This article will deal with what I have concluded is the potential answer to addressing the problem.

I have a lot of experience in dealing with people on the lower end of the income scale. 

If you look at my resume, you will see that I have worked in low-income housing in Maryland and Pennsylvania, working in the drug-infested areas. For the most part, I have a good understanding of the drug trade, which is not a part of my resume. I devised programs to address homeownership issues in those areas and, in most cases, was highly successful and recognized.

As identified in the last couple of articles, laws and regulations were devised to keep black people out of the white areas due to whatever reasons. I am not trying to call anyone names, just trying to interpret accurately. For the most part, poor in America means being black in many people's estimation and interpretation. I worked on a flood control project in Boswell, PA once and found an all-white housing authority development, so that interpretation is not necessarily totally accurate. Poor white people exist, and they exist all over the United States.

That is why the solution I am going to recommend is race-based and not income-based. Reviewing the history, if the solution were income-based, it would be set so that people in all-white areas would say that they want poor white people and not poor black people. White power structures would get upset about it, and everything would end up in the courts. This effort will not involve lawsuits, and no one will be suing others as it would be a voluntary program. Still, the string would be no federal dollars used within the political subdivision if they wanted to go it alone.

First, there needs to be an understanding that there is systematic race segregation in America. 

Secondly, the scenarios concerning how it was accomplished need to be recognized. Thirdly, the federal government needs to recognize this and try not to develop a scenario that will trigger lawsuits over a voluntary program.

I propose that the program amalgamate all federal dollars for the poor and allot them to this program. This action means abolishing the housing authorities (and their vast inventory of vacant homes) and all other programs which become dependent on keeping people poor. The administrative dollars carry a disproportionate amount of costs and all it does is reinforce the current thinking and solutions. The program needs to go to the direct benefit of the people who have experienced discrimination. There would be no funding for someone who wants to guide these folks to be poor by reinforcing being poor. The culture of poverty administration must be eliminated. People being paid hundreds of thousands of dollars to steer lucrative contracts to consultants is prevalent across all government areas, not just dealing with the poor. As a taxpayer, you need to be aware that we spend millions and millions on study after study of the poor while we limit the direct benefit to the poor.

Most people know me as someone who understands the process. I use the process to help towns and people that are struggling. I have done it so much that I do not have to pay a consultant $50,000 to state the obvious. Many times, I help people and organizations for free. Why? Because it is what I want to do, although my wife has told me that she sees people getting capricious with my time when I work for free. I usually get fired from those jobs anyway because deep down inside, those who hire me for nothing do not want to do what they say they want to do. Many are looking for self-benefit.

Here is what I propose:

That there be a federal land bank program dealing with all tax sale properties. The program would not be federal in administration but federal as a funding mechanism and allowed structure. It would be paid for by eliminating the HOME and CDBG programs and other amalgamated programs related to this kind of funding. It would have to have state approval and be administered by the local political subdivisions. First, the state would pass a law that properties up for tax sale be turned over to the county landbank whereby the federal government will pay the back taxes, and a person of color would be integrated into that neighborhood. Free house goes to the occupant, instant equity, instant desegregation.  

Tax sale properties are the spoils of capitalism. It is someone who did not have enough money to pay their taxes. Outstanding liens on the property would be erased through a federal judicial order, so it comes up free and clear. Wipe the title. As I stated in an earlier 422 Business Advisor article “Recognizing Spatial Separation Resulting in Racial Segregation,” many of the cities' properties had no conventional mortgage. Those kinds of issues make it much harder to work through a clear title. You would need some statutory authority, which would be part of the entitlement to federal aid agreement with the state.

Politically what this does is offers the states to be part of a national desegregation program that will be voluntary for anyone who wants even the inkling of federal aid — FHA mortgages, Federally Insured Student Loans, all of that. Local municipalities could choose not to desegregate and cling to a program's ramifications with the teeth of exclusion rather than forced inclusion. The program has to work backward to achieve results. It is an incentive ban rather than a punishment for not participating. In a way, it resembles a little bit the Obama order to force communities to tell the truth when dealing with housing and community development grants. The Obama program was punitive. This program is a lot easier because they would have to opt-in.

HUD defines scattered-site housing as 12 or fewer units. I believe that is too many. Everything should be a single-family scattered site. This way, everyone is the same; there is a need to deinstitutionalize housing for minority families. It is second nature for these boroughs and townships to fight a concentration of poverty with multiple units. Everyone will fit in because the houses will be the same.

So, what would "opting-in" look like? First, a State or Commonwealth would have to opt-in on a federal level. If they want federal money, they would have to "opt-in" to Desegregating America. The County would have to provide an "opt-in" to run the landbank as a tool to Desegregate the County. Then the state's individual political subdivisions would have the opportunity to "opt-in" to Desegregate their Communities.

Tax sale properties are then assigned to the landbank, which wipes the title, is reimbursed the tax revenue, and gives the property free and clear to a person of color. The process will be absolutely random and stochastic in nature. You will have properties that have their taxes paid, and the neglect of the property tax will be placed on the mortgagor because they do not want his lien wiped. School Districts and governments will have a better chance to get their money through the capitalist system. There will be wealthy communities that will not opt-in, but that will be okay. They should be able to live their lives in a manner they are accustomed to… without any federal perks like federally insured mortgages and student loans or maybe the interstate in that political subdivision needs to be maintained by the municipality.  

The second phase is for the housing authorities and publicly run agencies to give those houses to the residents at no charge and provide whatever mortgage is necessary to deal with the costs related to rehab or improvement. Let the private owner deal with that, not the government. We need to eliminate the government from owning housing for poor minorities.  

The opposite could be true in the inner city. Areas that are predominately people of color, there could be a program for the poor whites. They could be awarded houses to integrate the areas that are already hyper-segregated.

I would suppose any variation of this would work as long as there is adequate disincentive to desegregate America. As my dad used to say… "There are a million ways from Sunday to…." What we need to do is eliminate the political culture of poverty and race discrimination in America.   

Barry Cassidy is a freelance grant and economic development consultant. He can be reached at