From Segregation to Gentrification
Lessons from Seattle and Detroit: How city policies and NIMBYism lead to unimpeded market forces displacing poor people of color
Seattle and Detroit are two cities with similar population sizes (684K and 677K respectively). Thirty-five is the median age of residents, with a home ownership rate of 46.6% in both cities. Both have a vibrant downtown district located adjacent to large bodies of water.
But that’s where the major similarities end.
Seattle is one of America’s top economically competitive tech-innovation ecosystems. It has more than 415,000 employees, 6% job growth and a poverty rate of only 12% (compared to a national rate of just over 14%). Median household income is more than $80K and growing at 13%. Median property values are $530K and growing at more than 12% annually. The most populous demographic groups are white (66%), Asian (14%) and black (7%).
Detroit sits on the other side of the economic spectrum, struggling to find new economic stability after the city declared an $18B bankruptcy in 2013. With a population size similar to Seattle, the Motor City employs only 220,000 with a 1.7% decline in job growth. The poverty rate is near 40% and median household income hovers around $26K. Median property values remain steady at just over $42K. The most populous demographic groups are black (80%), white (9.5%) and Hispanic (8%).
While these two cities appear polar opposite in the extreme, economic forces operating in each city disproportionately impact poor people of color in remarkably similar fashion. Studies of market forces and public policies in each city reveal surprisingly consistent systemic outcomes for communities of color. These outcomes are familiar refrains for many major metros across America.
The Hill published an article on Feb. 27, 2018 titled, “Why is there bipartisan support in the Senate to cover up discrimination in banking?” The following is an excerpt:
Last week, a report from the Center for Investigative Reporting found banks discriminated against minorities in 61 US cities. The report was based on mortgage data that banks are required to report to the government. Now, the Senate is poised to pass a law that would allow almost all of the nation’s banks to hide some of their mortgage lending data.
The bill, nicknamed by advocacy groups the Bank Lobbyist Act, would be a giant step backwards for the public and national groups who use this data to ensure banks treat all borrowers equally. That’s not just a nice idea. It’s the law — and government regulators use Home Mortgage Disclosure Act data, known as HMDA (“humdah”), to make sure banks lend fairly to all qualified borrowers.
The data suggests that many banks do not — so banks are trying to get rid of the data.
Discriminatory lending practices have a long history in the United States dating back to the Reconstruction era, when the 14th amendment in 1868 compelled local policymakers and industries to accept black people and other nonwhites as US citizens and treat them with equal protections under the law.
The response was instead an institution of Jim Crow with codified public policies and systemic private practices that established and sustained separate and unequal societies.
Despite the landmark 1954 Supreme Court decision, Brown v Board of Education, Dr. Martin Luther King was still battling segregationists when he was killed in 1968, 100 years after newly freed black people were given citizenship rights under the constitution.
PACIFIC NORTHWEST: WHITE UTOPIA
Contrary to popular belief, it wasn’t just the southern states that mistreated black Americans and disregarded the highest laws in the land. It was a problem everywhere, including the Pacific Northwest.
The so-called “Oregon territory” included all of the region from the Pacific Ocean to the Rocky Mountains. And in 1844, exclusion laws prohibited black people from residing in the region. Violators were given specified periods of time to leave or risk being beaten until they did.
Although the state of Oregon was established as a “slave free” state when it entered the union in 1859, it did so as a “whites only” state. Being black in Oregon was an actual crime. And it was enshrined in law in the state’s constitution.
Black America was born because White America wouldn’t accept her new citizens. And systemic segregation became ingrained in the bedrock of American society from coast to coast. Fifty years after we lost Dr. King in 1968, cities today are still dealing with issues of 20th century segregationist policies and practices that have never been adequately dealt with across public and private sectors.
SEATTLE AND DETROIT: CITY COMPARISONS
After hitting an economic rock bottom in 2013, Detroit’s Midtown and downtown landscape drew investors, led by Quicken Loans owner Dan Gilbert, who owns more than 90 buildings in the downtown area. The investors have begun a transformation of the city’s core, attracting well-educated entrepreneurial-minded young residents who can pay a premium to live in close proximity to a growing business district, complete with arts and entertainment clusters and a downtown waterfront.
By comparison, Seattle’s Central District is a diverse residential community with a commercial corridor located near Seattle University, midway between the city’s touristy waterfront at Pike Place Market to the west and Lake Washington to the east. The Central District’s commercial area is called Midtown, which is being redeveloped.
Ironically, much like areas of Detroit that are rapidly gentrifying, the Central District was once home to a concentrated population of 70% black residents living on prime real estate in the heart of the city. Today, that number has dwindled to less than 20% and is projected to plummet further as developers eye opportunities to make deals with the city.
So, how did the City of Seattle, which has an overall population of only 7% black residents, attract so many black residents into a single concentrated area? How did black residents in Seattle in the 60s and 70s comprise more than 70% of the Central District’s population and establish cultural roots and heritage dating back to pre-Civil Rights Movement into the early period of the Great Migration era?
Likewise, how did the City of Detroit, which was once 90% white, transform into a city that is less than 10% white today? The answers to these two questions stem from the same major migration pattern.
In the aftermath of the Civil War, in 1865, a divided nation that initially grappled with the question of what to do with black people during its original formation, once again had to address the same question.
In 1865, the liberal-minded “radicals” in control of congress decided to outlaw slavery (13th amendment in 1865) and proposed a Civil Rights bill in 1866 to extend citizenship to black people (resulting in 14th amendment in 1868) and the right to vote (15th amendment in 1870). Notably Oregon was opposed to both the 14th and 15th amendments.
These three amendments to the constitution proved to be untenable for the conservative-minded white residents of many states. A war was waged against the four million new black American citizens, of which 90% were located in southern and southeastern regions. The hostile environment included onerous laws and policies that terrorized and threatened the existence of the newly minted black US citizens.
Laws were established to criminalize being black in America (Black Codes, Pig Laws, Convict Leasing, Sundown Towns). Black families experienced sustained economic deprivation and state-sanctioned terrorism (random lynchings, kidnappings, torture, public executions and wholesale destruction of entire black communities).
Those black families that had the capacity to leave the south fled to the north and west over a period from 1916 to 1970 known as the Great Migration.
Throughout the 1960’s, the black population of Seattle steadily increased due to the flow of black refugees fleeing southern states and migrating north and west. In like manner to Detroit and every other major city where black refugees landed, Seattle directed newly arriving black migrants to an economically quarantined area of town: the Central District. Seattle Times columnist, Jerry Large wrote about the city policy on May 6, 2015:
[Richard] Rothstein, a law professor at the University of California-Berkeley, quoted from the Kerner Commission report on the 1968 riots. The report said the country was moving toward two separate and unequal nations, one black and one white, and that poverty and segregation had created destructive ghettos.
And that’s 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.”
Rothstein blames federal and local government policies, especially housing policies, for producing and maintaining segregation and inequality.
Seattle, much like Detroit, has a long history of racial problems with the arrival of black Americans fleeing the south. This migration occurred in like manner to refugees fleeing war zones, hostile areas that encompassed all of the southern states following the coerced passage of the 14th amendment in 1868, which extended equal citizenship protections under the law to black people and usurped the rights of states to infringe upon those rights. Still, a change in the highest law of the land failed to ensure citizenship rights and protections on the ground in cities across America. And the new black “Americans” were treated as “exiles in their own land.”
Segregation became the national response to citizenship for black people. By the time Dr. Martin Luther King was assassinated in 1968, the nation had waged war (in every sense of the word) against the black American for more than 100 years. The United States federal government and all of its states had incorporated segregation as a codified national response to the 14th amendment, enshrined in law by the Supreme Court. This policy had the intended outcome of segregating black people by race, regardless of income, separated from whites, regardless of income.
Jim Crow laws weren’t merely to ensure the segregation of the races. They were established to subjugate, humiliate and degrade black Americans in every sector of society. The system was so much a part of the white American experience that artifacts from the Jim Crow era continue to sell at a premium today.
The Court had a change of heart in 1954, when it handed down a historic decision in Brown v Board of Education, which outlawed segregation in schools. Yet again, the establishment of law did not subsequently translate into policy and practice at the local levels. The effort to “maintain the status quo,” as Dr. King referred to those he regarded as segregationists, was not uniquely peculiar to the south. It was ingrained in the bedrock of the nation in every crook and cranny. Seattle was no exception.
SEGREGATION IN SEATTLE
As recently as 2007, white Seattle residents battled in court to remove requirements that included race as a factor in school desegregation efforts, invoking the 14th amendment as a mitigating factor. Lower courts ruled in favor of the school district’s policies. But the US Supreme Court overturned those rulings using the argument that Seattle Public Schools were never legally established as segregated and were not under a court order to desegregate.
In Parents Involved in Community Schools v. Seattle School District №1 (2007), the Court ruled that race could not be the determinative factor in determining to which public schools parents may transfer their children.
Ironically, Seattle was at least trying to desegregate public schools, despite its significantly large white population. But, it did not do so voluntarily.
In 1962, the NAACP sued the Seattle School District for its discriminatory practices. The district settled and established a new policy of busing that addressed the problems created by geographic and economic segregation of families. A first-person account of the policy was detailed by Sean Riley on April 16, 2016 in The Stranger, in a piece titled: “How Seattle Gave Up on Busing and Allowed its Public Schools to Become Alarmingly Resegregated.” Here’s an excerpt:
The work of integrating Seattle’s schools was rooted in the US Supreme Court’s historic Brown v. Board of Education decision in 1954, in which the high court ruled that segregated schools are inherently unequal and unconstitutional. In 1962, the NAACP, citing the Brown case, sued the Seattle School Board, claiming that the ship canal was a de facto racial dividing line creating segregated schools. The NAACP settled out of court when Seattle created a voluntary transfer program to lessen racial imbalance, and from then until 1977, Seattle tried to “dip its toe” in integration, enacting initially small policies like voluntary busing, then a small-scale middle-school desegregation plan, and then magnet programs. None of these programs significantly integrated schools.
In 1977, due to the threat of additional lawsuits from the NAACP, the American Civil Liberties Union, and others for perpetuating a segregated system — not to mention the looming threat of federal intervention — the Seattle School Board took a more drastic step. With a vote of 6–1, the board expanded its busing program to include all schools in the district as a means of racially integrating schools. The Seattle Plan, as it was called, first sent particular students to particular elementary schools in order to create racial balance. Middle and high schools followed suit.
Violence characterized mandatory busing across the country in the 1970s. In Boston, police had to escort black students to white schools as onlookers threw bottles and stones at them. The Ku Klux Klan blew up buses outside of Detroit. However, physical contentiousness was completely absent in Seattle. My own grandfather, Daniel Riley, the district’s director of student relations at the time, was quoted by the Seattle Times in 1978: “We haven’t had any screamers. We’ve had some seethers — a stew kind of boiling — but no significant tantrums.”
There was contentiousness nonetheless, Seattle style, which in some ways was more insidious. That contentiousness was conveyed through voting, the specter of “white flight,” and white people working the system to their advantage. Six weeks after the school board’s vote to expand Seattle’s integrated busing program, the Citizens for Voluntary Integration Committee (CIVIC) launched a ballot initiative to prohibit students from going to schools that were across the city from their homes. Sixty percent of Seattleites voted “yes” for this initiative.
Though the initiative was deemed unconstitutional two years later by the US Supreme Court, its broad local support revealed deep fissures among Seattleites and, in general, insufficient dedication to integrating our city’s schools. The episode also suggests that when Seattle avoided federal intervention, many residents got the idea that school integration was “optional” and that there were ways to work around it. All of these problems eventually contributed to the slow, decades-long death of integrated busing in Seattle.
WHITE FLIGHT: TOOL OF ECONOMIC WARFARE
Seattle in the 21st century still had a lot in common with Detroit during the 1960s. Segregationist policies and practices were the norm in Detroit ever since black migrants began journeying to the Motor City before and during WWII in search of work in its bustling factories.
In 1943, during WWII, white residents of Detroit targeted black residents, who were redlined in cramped areas of town and working for lower wages in the factories. The riot was the worst in Detroit history at the time, and a precursor to the 1967 riot in Detroit, which was the worst of more than 150 race riots that took place across the country that year.
Those two riots in Detroit led to 67,000 whites fleeing the city in 1967. The following year, another 80,000 emptied out, taking their wealth with them. Detroit Mayor Mike Duggan recounted this history to a packed house of local and regional economic leaders in his public policy address last summer.
See the video of his presentation below and read more about the policies Mayor Duggan is redesigning here: Public Policy and the Degradation of Detroit.
(VIDEO: Detroit Mayor Mike Duggan shocked a packed room of economic development policy leaders in the summer of 2017 when he presented the history of Detroit, which has implications for every city in America.)
Riley equated the white flight that Seattle experienced in its public schools to the same activity that was occurring in Detroit citywide across the same time periods:
In 1965, there were roughly 80,000 white kids in Seattle Public Schools; in 1975, there were 50,000; by 1985, there were 25,000. Cities like Detroit were stark reminders of the direst scenarios of white flight, and that specter hung over all of the Seattle School Board’s decisions. Consciously or not, white families leveraged this fear.
MEASURING SYSTEMIC BIAS
Detroit and Seattle in the 1960s were microcosms of a systemic problem across the nation. Segregation was tearing America apart, city by city. Its impact was felt across education, housing, employment and economic development. Any cursory analysis of a city’s education and economic policies anywhere in the nation would reveal a uniform outcome of historic indicators targeting an intentional economic deprivation of black Americans and other people of color through the policy tool of segregation.
The impact of segregation is measurable across myriad indicators: funding of schools, quality of education, AP courses, high school and college graduation rates, home ownership, home loans (mortgages and home improvement), business ownership and growth, savings and investments, employment and unemployment, arrests and incarceration, institutional violence (police and prisons), household income, wealth-building and generational wealth.
There is no excuse for widespread ignorance about these data in any metro region, except that the upward mobility of black residents and other poor people of color have not been established as a priority.
Over the past 50 years since Dr. King died, addressing segregation has not become a policy priority by any city in America, including Seattle and Detroit. The absence of such an obvious need reveals a default strategy of willful ignorance. Instead of addressing the stain of segregation, new public policies have been introduced that proclaim to address the issues of inequality and inequity.
Although efforts to address these issues are laudable, they fail to target the actual cause of inequality and inequity: segregationist policies and practices.
The semantics notwithstanding, Dr. King was unequivocal in his focus on the issue of disrupting, dismantling and destroying segregation in all its forms. History reveals that extraordinary efforts have been employed across the country to protect segregationist policies and practices. Any effort to achieve equity, however it may be defined and measured, cannot succeed without disrupting segregation. King understood that and attacked the issue of segregation directly and repeatedly.
Today, America remembers the Civil Rights Movement through the work and words of Dr. King. But his work and words are selective in the minds of those who prefer to paint him into a corner as merely a preacher of nonviolence and a dreamer of social justice.
In Seattle, an embryonic organization has been born to give hope and revive the dream by addressing pragmatic realities impacting communities of color. The Association of Beloved Communities (ABC) is comprised of a core group of concerned seasoned citizens with experience in generative discourse, convening and coordinating coalitions of community organizations around issues of shared interests.
ABC is committed to non-violent responses in the face of violent public policies and market forces that have little concern for the future of families and the children whose lives are disrupted and displaced. ABC is working now in the Central District with a variety of groups with the resolve that Dr. King demonstrated across the country.
Dr. King dreamed of a better tomorrow but was a determined warrior to disrupt his reality. His life-long battle was against the destructive and evil force of segregation. In 1963, two months before he offered his iconic speech during the March on Washington, Dr. King gave this fiery one at Detroit’s Cobo Hall:
Almost one hundred and one years ago, on September the 22nd, 1862, to be exact, a great and noble American, Abraham Lincoln, signed an executive order, which was to take effect on January the first, 1863. This executive order was called the Emancipation Proclamation and it served to free the Negro from the bondage of physical slavery. But one hundred years later, the Negro in the United States of America still isn’t free. [Applause]
But now more than ever before, America is forced to grapple with this problem, for the shape of the world today does not afford us the luxury of an anemic democracy. The price that this nation must pay for the continued oppression and exploitation of the Negro or any other minority group is the price of its own destruction.
The events of Birmingham, Alabama, and the more than sixty communities that have started protest movements since Birmingham, are indicative of the fact that the Negro is now determined to be free. (Yeah) [Applause] For Birmingham tells us something in glaring terms. It says first that the Negro is no longer willing to accept racial segregation in any of its dimensions. [Applause] For we have come to see that segregation is not only sociologically untenable, it is not only politically unsound, it is morally wrong and sinful.
Segregation is a cancer in the body politic, which must be removed before our democratic health can be realized. [Applause] (Yeah) Segregation is wrong because it is nothing but a new form of slavery covered up with certain niceties of complexity. [Applause] Segregation is wrong because it is a system of adultery perpetuated by an illicit intercourse between injustice and immorality. [Applause]
In a real sense, we are through with segregation now, henceforth, and forevermore. [Sustained applause]
In a real sense, we are through with segregation now, henceforth, and forevermore.
(Dr. Martin Luther King | Cobo Hall in Detroit, 1963)
Seattle was sick with segregation in 1963, just a year following a lawsuit by the NAACP to force the Seattle Public Schools to begin a process to address the problem that compelled children of color to walk an educational path that would inevitably lead to an adulthood immersed in a pit of low opportunities, high unemployment and poverty. It was an intentional track established by policy and targeting the most innocent of Seattle’s residents, its children of color.
FEDERAL INDICTMENT: SYSTEMIC RACISM EXPOSED
In the spring of 1965, the Department of Labor’s Office of Policy Planning and Research issued the now-infamous report, “The Negro Family: The Case For National Action.” The controversial report was interpreted as a failure of the black family (which was near 80% intact at the time of research) by those who sought to absolve white America of any systemic wrongdoing.
But it is difficult to sustain such an interpretation when the report issued a de facto federal indictment of systemic policies that targeted black Americans and undermined their pursuits of success in a nation controlled by white Americans. For black Baby Boomers, in particular those born during the Civil Rights era, the report offered an ominous warning:
In this new period the expectations of the Negro Americans will go beyond civil rights. Being Americans, they will now expect that in the near future equal opportunities for them as a group will produce roughly equal results, as compared with other groups. This is not going to happen. Nor will it happen for generations to come unless a new and special effort is made.
There are two reasons. First, the racist virus in the American blood stream still afflicts us: Negroes will encounter serious personal prejudice for at least another generation.
Second, three centuries of sometimes unimaginable mistreatment have taken their toll on the Negro people. The harsh fact is that as a group, at the present time, in terms of ability to win out in the competitions of American life, they are not equal to most of those groups with which they will be competing.
Individually, Negro Americans reach the highest peaks of achievement. But collectively, in the spectrum of American ethnic and religious and regional groups, where some get plenty and some get none, where some send eighty percent of their children to college and others pull them out of school at the 8th grade, Negroes are among the weakest.
The most difficult fact for white Americans to understand is that in these terms the circumstances of the Negro American community in recent years has probably been getting worse, not better. Indices of dollars of income, standards of living, and years of education deceive. The gap between the Negro and most other groups in American society is widening.
The thesis of this paper is that these events, in combination, confront the nation with a new kind of problem. Measures that have worked in the past, or would work for most groups in the present, will not work here. A national effort is required that will give a unity of purpose to the many activities of the Federal government in this area, directed to a new kind of national goal: the establishment of a stable Negro family structure.
This would be a new departure for Federal policy. And a difficult one. But it almost certainly offers the only possibility of resolving in our time what is, after all, the nation’s oldest, and most intransigent, and now its most dangerous social problem. What Gunnar Myrdal said in An American Dilemma remains true today: “America is free to choose whether the Negro shall remain her liability or become her opportunity.”
In 1968, three full years after this damning report was published by the federal government, which called for a “national effort” directed toward a “new kind of national goal,” Dr. King was in Memphis, TN to support the black men who were protesting oppressive and dangerous working conditions maintained by the City of Memphis. King was killed during that visit. America’s black citizens responded in widespread riots, reminiscent of those the country had experienced the previous year.
SEGREGATION TODAY, TOMORROW AND FOREVER
White America also responded to the death of Dr. King. Alabama Governor George Wallace traveled to Detroit and appeared at the same venue that Dr. King had addressed 25,000 attendees five years prior. Wallace offered his standard speech to 11,000 in attendance: Segregation Today, Segregation Tomorrow, Segregation Forever.
In the name of the greatest people that have ever trod this earth, I draw the line in the dust and toss the gauntlet before the feet of tyranny . . . and I say . . . segregation today . . . segregation tomorrow . . . segregation forever.
The Washington, D.C. school riot report is disgusting and revealing. We will not sacrifice our children to any such type school system — and you can write that down.
The desegregation of schools is the first level approach to improving the economic conditions of black Americans. Economics and education combined is the battleground upon which segregation was established.
The prohibition of black Americans (who represented 92% of the entire landscape of minorities in 1960) from being educated in quality schools, owning quality homes, accessing capital, owning sustainable and growing businesses, and earning equal pay were all systemic practices that led to widening economic gaps.
Today, the average white family holds 70 times more wealth than the average black family and if the average white family didn’t make another nickel, it would take 228 years for the average black family to accrue the same amount of wealth as the average white family. Education and economics are inextricably tied, as these eight charts on segregation produced by Frontline reveal.
It may be deeply offensive to longtime residents of the Central District to characterize it as a “ghetto.” But in economic terms, the shoe fits. On May 28, 2016 the Seattle Times published an article, “Central District’s Shrinking Black Community Wonders What’s Next?”
It offered this measurable insight into the economic vulnerability of the Central District:
The median annual household income for blacks in Seattle fell dramatically from $32,000 in 2000 to $25,700 in 2013.
[Note: The median household income in Detroit is $26,000 while the median in Seattle is just above $80,000]
The home-ownership rate among blacks in the city dropped by half between 2000 and 2013, with just one in five black households owning its home.
Meanwhile, recent studies of homelessness by King County researchers found that about 60 percent of families in shelters and up to 40 percent of individuals living on the streets on any given night are black.
Seattle’s Central District, where the average black household income is $25,000, could be considered Little Detroit, given its uncanny resemblance to the economics of the Motor City and the gentrification activities that are redesigning, redeveloping and reshaping places and people who live there today.
In his first-person essay for the Seattle Globalist on Dec. 8, 2017, Gavin Amos-Lopez offered insight into his own experience in the Central District:
I learned how Black people were forced into living in the Central District due to “redlining” by the banks — as late as the 1970s. Redlining was a way that banks ensured that neighborhoods stay segregated and kept the laborers close to downtown of the city. Banks would refuse loans to Black people and people of color who would try to buy homes that fell below a certain price.
Forms of redlining still exist. Seattle has raised the property taxes to force people to sell their homes and move away from the area. The city allowed big developers to build luxury apartments that people who grew up in the neighborhood can’t afford. Frequent police patrols can be seen in the neighborhood, where they are seen frequently pulling over vehicles in a community that relies on their cars for work. Mounting taxes, rent prices and traffic tickets are how people are now forced into certain locations in today’s society.
Seattle’s public policy of “redlining” was aligned with a national economic conspiracy and codified framework handed down from the federal government. It authorized local leaders to legally discriminate against black residents.
The policy was instituted and sustained by local policymakers and financial decision-makers (i.e. banks, mortgage lenders, real estate agents, developers, urban planners, economic development strategists, mayors, city councils and others within the conspiracy ecosystem).
In an effort to address the redlining issue, Seattle assembled a task force that issued a report after hearing from the public. In one televised public hearing by local station KCTS — Channel 9 on Jan. 20, 1976, more than 150 residents from across the city who had experienced difficulty in obtaining loans to purchase and/or rehabilitate homes, apartment buildings and businesses packed the room. The city recorded its account:
At that hearing, Paul Schell, then Director of the Department of Community Development, spoke about the need for a change in basics at the most basic level of processing loan applications. “[A] fundamental change needs to be induced, namely one of attitude toward continuing investment in the City. This change must start with the corporate officials of our major lending institutions and be infused down to the loan officers responsible for initial processing of individual applications.”
By February the task force had created an inventory of disinvestment problems, a complex set of issues that set the agenda for their work. The inventory included: problems with lenders, rejections occurring at the application stage of the lending process, the method of determining property values at the appraisal and underwriting stage, disclosure, rehabilitation loans and credit allocation. With respect to the City, issues included code enforcement, zoning, public services, and public works. Other problems at the county and federal level were identified.
The draft report was also reviewed by Superintendent of Buildings Alfred Petty. In his review, Petty stated that the practices of lending institutions as described in the report “include the presumption that neighborhoods are governed by an innate or inevitable pattern of rise and decline. This is an organic presumption that does not recognize the buildings can be maintained and can be repaired…” He believed the 20% vacancy rate formula in the report should be reconsidered because it “perpetuates past inequities.”
The focus of the draft report, Petty continued, “is overly limited to those people who wish to obtain financing in order to move into a house, and too little attention has been given to the financing needs of people who want to remain in their homes… As a result, the report needs much more work in the areas of rehabilitation financing at times other than the point of sale and the impact of existing and proposed reinvestment practices on the poor.”
At a national level, the Senate Committee on Banking, Housing and Urban Affairs issued a report of Fair Lending Enforcement by the four federal financial regulatory agencies — coincidentally, also on June 3, 1976.
The Committee found enforcement was “generally unsatisfactory” and recommended all lenders keep records on the minority status and sex of rejected and accepted loan applicants, noting that there is “ample evidence on the public record of discrimination in mortgage lending.”
During the Committee’s two days of hearings, Senator Biden commented, “You all know as well as I know that people out there, because of their color, don’t get the same treatment as other people do when they come in for a mortgage or a loan. It’s as simple as that.”
Unlike many areas being gentrified across the nation, with depressed property values increasing as surrounding adjacent communities were being developed at market rate prices, the Central District had one champion landlord: Tom Bangasser.
Tom’s family had owned two parcels in the Central District for more than 75 years. Tom managed the property passed down from his grandfather, J.T. Sheffield, to his children and grandchildren along with acquisition and maintenance of new properties over the past 30 years. During that time, he was an eye witness to the redlining practices, as well as a victim.
“Because of my business background, I managed family real estate in Denver, Portland and Seattle,” Tom said. “For Seattle, I had direct management knowledge and experience for comparing the Pioneer Square, Denny Regrade (Belltown) University District and West Seattle neighborhoods.
“Access to capital in any area of the city was relatively easy for a ‘white man’ except in the Central District. Getting a loan in the CD was next to impossible. I dealt with all the major banks. Most recently, the loan from Wells Fargo Bank was short-term with a higher interest rate and no access to ‘reserve account’ funds. A 15% ‘loan-to-value’ ratio (as compared to a conservative 50% ratio in other neighborhoods) is attributed to a ’people of color’ neighborhood.”
Over five decades, Tom grew his family’s ownership of properties in the Central District to 106,000 square feet. This included leases of commercial property with a prioritized favor toward helping minority tenants succeed.
As a white man deeply entrenched in the real estate competition in Seattle, Tom understood the systemic challenges facing black residents of the Central District. And he befriended many in the community while working to keep his properties affordable and contribute to efforts to sustain the cultural heritage and roots of a community that felt it was under siege by market forces. His anchor “bankable” tenants included the United States Postal Service and the Washington State-owned liquor store.
Henry McGee is a professor of law at Seattle University, located adjacent to the Central District. Henry also lives in the Central District. He writes in a 2007 edition of the Urban Lawyer titled, “Gentrification, Integration or Displacement: A Seattle Story.”
There was also a dramatic shift in the racial landscape of the Central District, Seattle’s traditionally African American community. In 1990, there were nearly three times as many black as white residents in the area, but by 2000, the number of white residents surpassed the number of blacks for the first time in 30 years. The overall racial shift in the Central District is clearly in favor of white in-movers, with a concomitant number of blacks moving out.
Looking beyond the gross numbers the Census reported subtle but significant changes within the Central District community. The overall percentage of households reporting incomes of $50,000 or more has risen substantially. Most black families in the area report incomes of less than $15,000 and these low income families comprised a smaller percentage of the total households in 2000 than in 1990.
In 2000 most of the area’s residents between 22 and 39 were white or Asian. Most blacks, in comparison, were either under 22 or over 60. These percentages suggest that there are fewer blacks in the District in prime income earning years.
The white and Asian American residents of the community are also generally better educated. Their presence, and the presence of their children in Central District schools, has increased the “education gap” between black and white children and adults.
The Central District, for blacks at least, is increasingly becoming a community of the very young or the very old with many better educated, working class African Americans moving southeast into Seattle’s Rainier Valley or beyond into Renton and other inner suburbs.
Ironically the promulgation of anti-housing discrimination legislation has encouraged this movement. In 1977 Washington passed two anti-discrimination statutes, the “Mortgage Disclosure Act,” and the “Fairness in Lending Act.” These measures made the trickle of blacks into the suburbs in the 1960s a flood by the early 1980s.
At the same time younger European Americans, concerned about rising gasoline prices and attracted by the urban lifestyle their parents had fled a generation earlier, began to seek out the Central District which in the 1980s was made even more attractive by depressed housing prices, a consequence of decades of redlining that was finally on the decline.
Young European American childless couples, or those with young children, now purchased properties in Central District neighborhoods their parents, with few exceptions, would have regarded as racially contaminated.
SEATTLE’S LAST STAND
The Midtown property, owned by Tom and his siblings, was in the heart of the Central District and, at 106,000 square feet, represented the largest contiguous commercial property in the area. Situated a short bike ride from two waterfronts, a downtown tourist area and a major university, Midtown and the surrounding Central District, eventually became the last prime piece of mixed-use real estate in Seattle. It may actually be the most valuable real estate occupied by black residents anywhere in the country.
Midtown may be the most valuable piece of commercial real estate in any gentrifying community in America.
Unlike Detroit, where investors envision attracting more white tech-driven entrepreneurs and young white families into re-developed live-work-play areas of downtown Detroit, Tom Bangasser envisions the use of his family’s property to preserve the African American heritage of Midtown against the onslaught of gentrification sweeping over the Central District. The City of Seattle could play a significant role in partnering with Tom and community activists to protect the land from the market forces of gentrification.
But Tom’s efforts were derailed last year by his siblings’ sale of all of the property owned by his family. Despite his defensive arguments to retain ownership, his siblings outvoted him in the sale of their Midtown property to Lake Union Developers. In preparation for the sale, MidTown Limited Partnership sued and evicted an activist tenant, Omari Tahir-Garrett.
The resistance made news. An article in Curbed by Sarah Anne Lloyd on March 16, 2016 was titled, “Central District Eviction Sparks Anti-Gentrification Protests: The eviction of the Umojafest Peace Center is a blow to many in the historically black neighborhood.”
“If you believe black lives matter, we need to start tying it to real struggles,” said community organizer Rashad Barber.
The eviction comes less than a week after Midtown Properties [MidTown Limited Partnership], who owns both sites, attempted to clear black-owned business incubator Black Dot from Midtown Center. We’re told that Black Dot had been operating under another tenant’s lease, which ended last month.
K. Wyking Garrett [son of Tahir-Garrett], a community activist and co-founder of Black Dot, also created community organization Africatown, who, with nonprofit Forterra, put a bid on the property last month to create an “inclusive development” with affordable housing and black-owned businesses.
“The owners of this property have a choice,” said Council Member Sawant in a prepared statement. “They can go down in history as having aided the disintegration and displacement of this historical black neighborhood. Or they can earn the goodwill of this community and our movement by accepting the bid from Africatown and its partners.”
Hugh Bangasser of [MidTown LP] testified in court to “squalid conditions” on the property. His sibling Tom Bangasser testified on Tahir-Garrett’s behalf, stating that [MidTown LP] was responsible for the “chaos and clutter,” and that they’re “not sufficiently concerned with the rights of African Americans.”
Tom Bangasser was removed as a controlling partner in Midtown Partners [MidTown LP] right before the notices to vacate began. “I’m a believer that the neighborhood should own the property,” he told Capitol Hill Seattle at the time.
Last April, Tahir-Garrett sued the Bangasser family, the County, and some City Council members seeking payment for racial discrimination, defamation of character, and back pay for acting as a caretaker of the property.
Soon after the public struggle with Omari, Midtown Properties LP completed the sale of the Midtown Center property at 23rd and East Union to Lake Union Partners for $23.25M.
Earlier this year, Capitol Hill Seattle Blog reported on the release of the architectural design for the planned development of the property, which includes a deal with Africatown and its leader K. Wyking Garrett.
In 2017, CHS reported on market-rate developer Lake Union Partners stepping in with $23.25M to pull together a project on this key block for Central District redevelopment. Africatown will be part of inclusive development component in the plan.
A previous deal for the block got off to a rough start as the design review board rejected the first design plan for the Midtown Center block for a project from national developers Lennar Multifamily Communities and Regency Centers. The rejection was soon a moot point when the deal for the big developers to purchase the property fell off the table.
In the new deal with Lake Union Partners, Africatown, Forterra, and Capitol Hill Housing will develop a portion of the block with “120–135 affordable apartment homes, affordable to individuals with income as low as $26,880 — or 40% AMI” and about 3,000 square feet of retail. The developers say roughly 50% of the housing on the full-block will be affordable to people earning between 40–85% of area median income. “We’re working to maintain fertile ground where a Black community that has been here for over 130 years can grow and thrive in place, K. Wyking Garrett, president of the land trust, said in an announcement of the agreements.
Africatown Plaza will occupy the edge of the block south of the set of three Lake Union Partners buildings.
Developers, meanwhile, are collecting community ideas for the large “public square” courtyard that will center the development. Uses envisioned for the courtyard include farmers markets and cultural events.
The project is slated to begin construction in late 2019.
BEHIND THE FAÇADE OF AFFORDABLE HOUSING
Tom Bangasser isn’t impressed by the developer’s “compromise” through off-loading the affordable housing to Africatown.
“This is not a partnership or any kind of shared ownership. This is just another form of subtle segregation, lacking transparency,” said Tom.
Tom believes there are three inherent problems with the deal:
- The property was obtained by Lake Union Partners at a substantial discount from its true market rate value, what he calls, “Discount By Appraisal.” Comparisons to other “white” neighborhoods may have elevated the price of the property in the $45M range. But the property was discounted significantly based on “location” and “current zoning,” euphemistic language that resembles the manner in which FHA loans were determined through redlining of communities for decades.
- Africatown appears as a public prop masking the identity of the property’s true owner. Since Africatown lacks legal structure, assets and capacity to purchase the property, Capitol Hill Housing (CHH) will develop and manage the 20% portion set aside for affordable housing. The City of Seattle is responsible for establishing CHH as the property owner. Was that the best option?
- Forterra is a land conservancy that purchased the section of property set aside by Lake Union for affordable housing development. Neither Africatown nor other leading members and organizations that have a prioritized concern for the sustainability of the community negotiated the specific set-aside that would be controlled by CHH and Africatown. The 20% set-aside is the least desirable and least valuable portion of the property. The City of Seattle appointed CHH as owners and managers of the property in “partnership” with Africatown, with a contingency that Africatown might purchase or receive the property outright at some point in the future when it is capable. This arrangement places Africatown at a severe disadvantage in all negotiations, including determining which parcels of property will be set aside by Lake Union for ownership/development by Capitol Hill/Africatown. The future development of such property and final decisions in the management process appear to be in the hands of CHH, which makes Africatown merely a prop throughout the process.
“Seattle’s Central District is fast-changing and becoming “bleached white” in a wealth reallocation that has all the markings of a “whites only” or “white privilege” opportunity,” Tom said. “Without access to capital and a political attitude of shared economic opportunity and true wealth generation, this African American neighborhood is gone!
“For more than sixty years the peoples of this historically black neighborhood have been ignored and their property undervalued. The absence of transparency coupled with a ’lawyer for hire by the highest bidder’ legal environment only perpetuates this wealth inequality and economic segregation. Martin Luther King advocated the significance and strength of diverse integrated neighborhoods and communities, which he called the ‘beloved community.’ I’m with Dr. King. Hopefully it is not too late for Seattle’s Central District.”
CHAMPION OF COMMUNITY COHESION
Tom remains committed to recovering ownership of the Midtown Center. He and his siblings are currently embattled in court proceedings over the property.
Tom argues the City of Seattle failed to provide enough time for Africatown or another entity representing the interests of the community to engage fairly in the negotiations over the property. When the banks fail to provide access to capital, then the city must step in. If not, then residents are left to the mercy of market-driven forces.
As elected stewards of the best interest of all its residents, the city government has a fiduciary responsibility to protect vulnerable communities from discriminatory and predatory market behavior targeting poor people of color throughout Seattle.
If Africatown had been afforded adequate time to convene other institutional and community organizations that exist in the area who have a vested interest in what happens with the property, it may have come to the table with a coalition of partners alongside Tom’s legal and financial interest in the property. This would’ve provided a much different power dynamic than the one presented last year when developers approached the City with their plans.
Ostensibly, Africatown, buoyed by a coalition of community organizations and institutions, could have leveraged an ownership stake Tom already has in the property alongside an investment by the City of Seattle, perhaps federal funding from the EDA, Local Initiatives Support Coalition (LISC) and potentially shares purchased in the property by equity investors, to hire its own economic strategists, developers and architects to produce a mixed-use outcome that was owned by the community at the outset and in perpetuity.
Africatown would have not only ownership of the last piece of prime mixed-use property in the nation’s top metro economic ecosystem, but as a community organization, it could reap market-rate revenues to sustain its own operations and grow.
Meanwhile, Africatown could’ve managed the property with a priority toward ensuring a hedge against complete gentrification of a community that, without sustained disruption, is destined to fall below a 10% threshold of black residents into the realm of single-digit percentages over the next decade.
SOLUTIONS TO CONSIDER
Tom Bangasser’s fight to save Seattle’s Central District may look like a family quarrel to the court. But to the nation, it represents perhaps the last battle against unimpeded forces nationwide that threaten to completely displace communities of color. The outcome of this battle will be determined by the forces aligned on each side.
“The owners of this property have a choice,” said Third District Councilor Kshama Sawant.
So does the City of Seattle. The property was purchased at a significant discount by Lake Union Developers. That discount has not benefited the historic community. And there are options for the City to consider:
The City could reimburse the developers, which would end the feud among the Bangasser family.
The City could place a hold on any development of the property until The Seattle Foundation in cooperation with ABC Association of Beloved Communities establish a strategic plan for the short- and long-term sustainable economic development of the property.
The City could expand its partnership with the Central Area Collaborative to partner with The Seattle Foundation and Association of Beloved Communities serving as high performance resources that assist the community’s Collaborative in develop a strategic plan for economic competitiveness that aligns with its own equity plan and regional competitiveness benchmarks that consider long-term measures and outcomes.
The City of Seattle, in partnership with the Central Area Collaborative and supported by the Association of Beloved Communities, could convene thought leaders and best practices from around the nation, including innovative community land trust developments like Dudley Street Neighborhood Initiative in Boston, New Economy Initiative in Detroit, and the Equity New Orleans initiative, to learn how other communities, cities and foundations are working together to uplift rather than overrun communities of color.
DISRUPTING SEGREGATION AND GENTRIFICATION TRENDS
The history is clear. Segregation and gentrification are public policies and private sector practices that harm communities of color. In Seattle, like Detroit, and other diverse cities like New Orleans and Philadelphia, long-term ingrained policies have severely damaged poor people of color, in particular black Americans.
Cities do not have the luxury of starting from scratch and wiping away the past, as though the story they tell starting today is the whole story. Cities owe a massive debt to the descendants of families they have wronged. They can start to address that incredible responsibility through public policies and economic strategies that stand against the tide of market-driven forces to protect the vestiges of what’s left of communities like the Central District.
Moreover, the City of Seattle can become an active partner in developing a city of the future, comprised of multicultural, multiracial residents who all enjoy equitable pathways to opportunity and prosperity. Within that responsibility resides ownership of courageously leading the resistance against the inevitable rise and clamor of the NIMBY-ites.
The lesson Seattle can learn from the horrors of Detroit’s past is that the infrastructure of the city will remain investment-worthy assets that can be used to benefit all residents, not just a select group. People who decide to leave cannot take the city infrastructure with them. Corporate leaders, whose thriving businesses employ workers and contribute to taxes that feed the city budget, must be leading partners with the City and community foundations, and buy into the strategy of investing in the development and maintenance of equitable pathways to prosperity for all.
Such equitable economic pathways were never built in any city during the 20th century. Quite the opposite. Systemic biases persist until rooted out and replaced. And cities today are still grappling with the systemic impact of generations of harm to people of color.
The one thing of which all city leaders are assured, is segregationist policies and practices will not dissipate or disappear on their own. Without an intentional and sustained effort, led by city, business, education and foundation leaders alongside community activists, the gale force winds of market-driven economies will prevail over the welfare and lives of people.
From the February 18, 2018 issue of Reveal, an initiative from the Center for Investigative Reporting. 3 Investigations Opened After REVEAL Uncovers Redlining in Philly.
Pennsylvania’s state treasurer and attorney general announced separate investigations into pervasive redlining in mortgage lending in Philadelphia this week.
At the same time, the Philadelphia City Council passed a resolution calling for hearings into the practice, amid continued fallout from an investigation by Reveal from The Center for Investigative Reporting.
Reveal analyzed millions of mortgage records and found 61 metros across the country where people of color were significantly more likely to be denied a conventional home purchase loan, even after taking into account how much money an applicant made, the size of the loan they were trying to get and the neighborhood where they wanted to buy.
We focused our story on Philadelphia, one of the largest cities in the country with this disparity. The analysis found African Americans were 2.7 times as likely to be denied a conventional mortgage there. Although black and white residents make up similar proportions of the area’s population, white applicants received 10 times as many conventional mortgage loans in 2015 and 2016.
Philadelphia is a case in point. It isn’t just reeling today from leftover redlining that hasn’t gone away. It is, as Dr. King so eloquently stated in his Letter from a Birmingham Jail in 1963, “maintaining the status quo.”
This article offers insight into the “shameful condition” Dr. King spoke of in his iconic 1963 speech. We are still re-living the past today, and mortgaging the future for our children in the process.
Seattle could be the catalyst that disrupts the gentrification trend in the Central District and offers the nation a pilot demonstration of how to break segregationist chains across the nation that bind us to the past. Whether it will remains to be seen. In the meantime, this is our national nightmare.