In June, the Supreme Court issued several decisions with big policy implications. Its rejection of a challenge to Obamacare and its endorsement of the right to same-sex marriage have received the attention they were due. A third decision, confirming that the Fair Housing Act prohibits not only policies that intend to perpetuate racial discrimination and segregation, but those that have the effect of doing so, was equally momentous. Yet because the ruling concerned an obscure (to the public) and technical phrase (“disparate impact”), it has been more difficult to understand. To comprehend its significance, a review of its background is in order.

Roots of the Fair Housing Act

In over 100 cities during the summer of 1967 African Americans rioted, in rebellion against segregated and inadequate ghetto conditions. President Lyndon Johnson appointed a commission headed by Illinois Governor Otto Kerner to determine the causes of the riots; its report was issued in March, 1968. The Kerner Commission noted that because housing in suburbs surrounding black ghettos was closed to African Americans, creating an artificially reduced housing supply, “housing cost Negroes relatively more” than the cost to comparable white families. Despite its higher cost, ghetto housing was “three times as likely to be overcrowded and substandard.”  The Commission concluded that:

Our nation is moving toward two societies, one black, one white—separate and unequal… Segregation and poverty have created in the racial ghetto a destructive environment totally unknown to most white Americans. What white Americans have never fully understood—but what the Negro can never forget—is that white society is deeply implicated in the ghetto. White institutions created it, white institutions maintain it, and white society condones it.

Here, however, the Kerner Commission pulled its punches with, as we shall see, calamitous results that we confront today. As the Kerner Commission (and many well-informed Americans) understood at the time, it was not some vague “white institutions” that created the ghetto, but racially explicit government policy—especially federal public housing programs that unashamedly separated blacks from whites to create racial isolation in neighborhoods where segregation had been previously unknown, and federal home finance programs that underwrote the creation of all-white suburbs with the explicit requirement that blacks be excluded from them. It has been hard to figure out how to remedy the actions of undefined “white institutions;” identifiable federal programs would have been a lot easier to get our hands on.

Nonetheless, the Kerner Commission called for Congress to “mount programs on a scale equal to the dimension of the problems.” Residential integration, it said, “is the only course which explicitly seeks to achieve a single nation,” and “a national fair housing law is essential” to begin the “out-movement” of Negroes from ghettos. “In many suburban areas,” the Commission advised, “a program combining positive incentives with the building of new housing will be necessary” to carry out desegregation.  ...