Senate Banking Hearing on the Legacy of Racial Discrimination in Housing

Today, the Senate Banking, Housing, and Urban Affairs Committee held a virtual hearing titled “Separate and Unequal: The Legacy of Racial Discrimination in Housing.” In their opening statements, Chairman Sherrod Brown (D-OH) and Ranking Member Pat Toomey (R-PA) both acknowledged the broad history of housing discrimination in the United States.

Chairman Brown explained the purpose of the hearing, stating, “On this Committee, we have an opportunity to address the legacy of housing discrimination. And we have an obligation, under the law that this body passed 53 years ago” (the Fair Housing Act of 1968).

Richard Rothstein, author of The Color of Law and Senior Fellow Emeritus of the NAACP Legal Defense and Education Fund, was the first witness to testify. He outlined the history of government-sponsored discrimination in housing and homeownership. For example, he mentioned the role of redlining, racially restrictive covenants, and segregation in federal public housing.

Ms. Lisa Rice, President and CEO of the National Alliance for Fair Housing, and Dr. Jason Reece, Assistance Professor of City and Regional Planning at The Ohio State University explained how America’s legacy of housing discrimination continues through current practices. Ms. Rice cited 2019 Home Mortgage Disclosure Act (HDMA) data showing that 19.01% of Black applicants were denied mortgage loans compared to only 10.15% of White applicants. Dr. Reece pointed out that the legacy of housing discrimination has produced neighborhoods with concentrated poverty and a lack of recourses, which are largely populated by people of color.

Two witnesses from the American Enterprise Institute (AEI) also joined the hearing. Mr. Howard Husock, AEI Adjunct Fellow and Contributing Editor for the Manhattan Institute’s City Journal, proposed changes to the Community Reinvestment Act (CRA) and the Affirmatively Furthering Fair Housing (AFFH) rule. Mr. Tobias Peter, Research Fellow and Director of Research at the AEI Housing Center, pointed to racial discrimination in residential zoning policies and foreclosure-prone affordable housing polices as two major causes of racial disparities in housing.

Following the testimonies, several Senators discussed these housing issues with the witnesses. Senator Tim Scott (R-SC) asked whether additions to credit reporting, including reports on utility payments, would help to qualify more Black households for homeownership. Ms. Rice said she believes that those changes would help and that the GSEs (Fannie Mae, Freddie Mac, etc.) could help to collect that information.

Senator Van Hollen (D-MD) asked Mr. Rothstein about the “race neutral” policies he mentions in his book. Mr. Rothstein described how policies that are superficially race neutral can still have a disparate impact due to the history of racial discrimination. An example of that phenomenon is exclusionary zoning laws that, at least on the surface, do not explicitly mention race.

Senator Warnock (D-GA) asked how to address ongoing discrimination in the appraisal market. Ms. Rice responded that Congress and the administration should enforce the Fair Housing Act, fund fair housing organizations, and re-staff the Office of Fair Housing and Equal Opportunity at the Dept. of Housing and Urban Development (HUD).

Several other Senators from both parties attended the hearing to question the witnesses. All witness testimonies and a recording of the hearing are available at www.banking.senate.gov/hearings