Housing subsidies were especially instrumental in creating the white middle class after the Second World War. American soldiers returning from war were welcomed home with generous aid from the GI Bill of Rights, guaranteeing access to education and housing.
But these guarantees were meant almost exclusively for the benefit of whites. Preexisting federally sanctioned racist FHA and bank lending practices excluded almost all minorities from benefiting from these housing subsidies. By favoring whites, they created artificial and racially sterile white suburban communities. For an upwardly mobile minority homebuyer trying to integrate into these neighborhoods, it was a common experience to be greeted with racist housing practices including redlining and blockbusting or discrimination by neighborhood NIMBY organizations. Together these practices preserved or worsened residential segregation and impeded minority resident homeownership. As owning a home means the ability to accumulate equity and build a financially sound future for oneself, not having this ability to accumulate wealth hinders one’s socioeconomic wellbeing. It also detrimentally affects minority communities by concentrating poverty in segregated neighborhoods, resulting in a resounding cycle of urban decay, structural dilapidation and lack of interest in community wellbeing and development.
Even though today these racist lending practices have been outlawed by the Fair Housing Act of 1968, this law alone could not and has not corrected the legacy of decades of neglect and the segregated concentration of poverty. Direct corrective measures are needed, particularly subsidies for first-time minority homebuyers. If this seems unfair or the favoring of some over others, one needs to remember the dual history of the housing market: subsidizing whites and divesting minorities. One half of the story created the middle class and the other minority segregation and exclusion. Taking action today by subsidizing minority homebuyers is not an unfair handout; it is the reification of an equality of opportunity long withheld to some while being long enjoyed by most.