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Racial residential segregation

In 1948, the Supreme Court outlawed the enforcement of racial covenants with Shelley v. Kraemer, and two decades later the Fair Housing Act of 1968 incorporated legislation that prohibited discrimination in private and publicly assisted housing. The 1975 Home Mortgage Disclosure Act and the 1977 Community Reinvestment Actlimited mortgage lenders’ ability to provide discretion in issuing loans and requiring that lenders provide full disclosure of where and to whom they were providing housing loans, in addition to requiring that they provide loans for all areas where they do business.[18] The passage of fair housing laws provided an opportunity for legal recourse against local and federal agencies that segregated residents and prohibited integrated communities.

Despite these laws, residential segregation still persists. More strict enforcement of these laws could prevent discriminatory lending practices and racial steering.[29]Moreover, educating property owners, real estate agents, and minorities about the Fair Housing Act and housing discrimination could help reduce segregation.

The class action lawsuit Hills v. Dorothy Gautreaux alleged that the development of Chicago Housing Authority’s (CHA) public housing units in areas of high concentration of poor minorities violated federal Department of Housing and Urban Development (HUD) policies and the Fair Housing Act. The 1976 court decision resulted in HUD and CHA agreeing to mediate segregation imposed on Chicago public housing residents by providing Section 8 voucher assistance to more than 7,000 black families. The Section 8 assistance provided blacks the opportunity to move out of racially segregated areas and into mixed neighborhoods. Policymakers theorized that housing mobility would provide residents with access to “social capital“, including ties to informal job networks. About seventy-five percent of the Gautreaux households were required to move to predominately white suburban neighborhoods while the remaining 25% were allowed to move to urban areas with 30% or more black residents.[30]

Social scientists researched the impacts of mobility on Gautreaux participants and found that children with access to better performing neighborhoods experienced improvements in educational performance, were less likely to drop out of school and more likely to take college preparation classes than their peers who had moved to more segregated areas of Chicago.[30]