When Sonoo Thadaney Israni bought a house in this
neighborhood in California’s Silicon Valley, she found something
disturbing in the fine print of her home deed.
-The language that I read basically said the only people allowed to live
in this community, in these homes, are white, unless you're a servant.
The subdivision is called Ladera, and the racist covenants were
attached to the deeds of all 500-some homes here.
The rules are no longer enforceable or even legal.
But they’ve been on the books since the neighborhood was
laid out 70 years ago.
And they help illustrate how so many of America’s
suburbs ended up segregated.
-It hurts, it hurts to be told you're not welcome.
Forget welcome, you're not allowed.
-It so offended me, I thought, well, this has to be offending everyone
who buys property here.
So some of Ladera’s residents set out to understand
how this happened.
And it turned out these relics of segregation grew out of a
historical moment more often remembered for progressivism
and inclusion.
-I pledge myself to a new deal for the American people.
The New Deal programs launched between 1933 and the end of the
Second World War transformed society.
But Black Americans reaped far fewer benefits from
these programs than white Americans.
-The New Deal expanded government capacities in a way that
provided economic rights for people – the right to capital, the right to a
job, the right to health care, the right to old-age pension.
What was problematic is that that right was
not inclusive.
One of the clearest examples of this came when New Deal agencies
began insuring affordable home loans.
Before backing the loans, agencies mapped communities
across the country, dividing them into zones judged to be higher or
lower risk for banks.
Records show a key factor federal mapmakers
used to determine this perceived risk was race.
This practice, called redlining, largely cut people of color
off from affordable borrowing.
-It's not a case that you just had these bigoted bankers and these
bigoted homeowners.
The federal government was culpable.
Black people, by design,
were excluded from this benefit.
It’s exactly what happened in Ladera.
In the late 1940s, a mixed-race group of about a
hundred families banded together to build cheap homes
near Stanford University.
Workers, teachers and professors, including the novelist
Wallace Stegner, formed a cooperative to buy and transform a
tract of hilly ranchland into an affordable suburb named Ladera.
But the project soon stalled.
-No bank would give them the loan to build these homes.
The banks wouldn’t do it because the Federal
Housing Administration wouldn’t insure their loans, because of these
hundred members of the cooperative,
three were African Americans.
At the time, the Federal Housing Administration explicitly
recommended that race restrictions be used
in new suburban developments.
Its lending manual even included instructions for
banning buyers who weren’t the race
for which new homes were “intended.”
-The segregation that this program alone created is responsible for
much of the racial inequality we have in this country today.
Unable to find financing, the Ladera cooperative disbanded, and sold
the land to a private developer who built Ladera as a
whites-only community.
By the 1950s, this mix of federal policy and private
discrimination left few options for Black Americans seeking homes in
this part of California.
-My dad got involved with the Palo Alto-Stanford branch of the
N.A.A.C.P.
They were proving that there was housing discrimination.
And it was notorious here, very subtle, um, but it was notorious.
My dad could easily pass for white.
My mom was brown-skinned, you knew who she was.
It was actually something that, that was very
painful for my mother, because my dad would go to rent an apartment
or to, uh, buy property.
Um, they'd say wonderful.
He'd say, let me bring my wife.
And as soon as she came back with him, they would
say, no, this is no longer available.
-When my parents came here from Alabama, they figured, O.K., this is
a nice area, we don’t have to worry about our kids getting lynched.
There’s not open racism.
But they didn’t factor in that there was a slew of hidden racism.
About nine miles from Ladera, Elwyn Rainer’s family opened up
this service station in one of the only areas open to Black American
property buyers, now known as East Palo Alto.
-The African Americans were guided to this area.
Any houses on the other side of the freeway were,
were considered to be out of their price range, or the interest rate
alone would kill that dream of them owning a house, because they
couldn’t afford it.
It’s like they say you’re on the wrong side of the tracks.
For us, it was the wrong side of the freeway.
For decades, East Palo Alto and neighboring Belle Haven were
unincorporated communities without a city government, where
housing shared space with heavy industry and residents enjoyed few
of the amenities available to the majority-white suburbs, like
Palo Alto, Menlo Park or Ladera.
-We had roads that were, that were, you know, badly paved.
We had many, many a neighborhood that
did not have sidewalks.
We had a school district that was grossly underfunded.
You know, we were walking in the middle of the street
instead of walking on sidewalks, we were – had bad lighting,
we had bad water.
Um, we didn’t even have a city – we didn’t have a place
where we could go and complain, even.
Today, East Palo Alto is 70 percent Black and Latino.
The median family income is $83,000.
Half the households rent and more than 10 percent
of families live in poverty.
Compare this to Ladera: 75 percent white.
The median family income stands just below $200,000.
The poverty rate is one percent, and nobody rents.
-And it doesn't take a rocket scientist to figure that one out,
you know, what that's really all about.
Well, it's about race.
-What is critical to note is that a white, asset-based middle class
didn't simply emerge.
It was structured, and it was structured
largely through home ownership.
It was structured largely through
policy that facilitated white people to acquire homes that appreciated
over their lifetime, that could be passed down to future generations
as well.
The considerable gap in education and income between America’s
Black families and white families has slowly narrowed
since the civil rights era.
But the gap in wealth – what families own –
has been a different story.
-Throughout American history, the racial wealth gap
has been dramatic.
For every dollar held by a typical white family, at the median,
the typical Black family has had about a dime.
So this asset-based, wealth-based, white middle class
that was generated from New Deal and postwar policies was never
extended to Black people.
And economists say one of the most significant factors creating the
wealth gap between white and Black Americans
is home ownership.
Much of a middle class family’s net worth is determined by
the value of their home, and whether you or your ancestors
could buy one in the first place.
-A home also facilitates your ability to generate wealth to do other things.
You can finance an expensive college degree.
With wealth, if you want to change jobs,
you can pursue your dreams.
A home provides access to neighborhood resources.
A home provides access to, in the American context,
with public schooling, good schools.
-My father's family was a group of seven that lived in one room.
So when I look at the opportunities my
children had by living in this neighborhood, function of purely
geography, that zip code, it's a huge amount of privilege to have grown
up in this neighborhood.
There’s no quick fix for the inequality that’s grown out of
residential segregation.
But researchers say it’s worth
considering what history can teach us.
-The problems that exist today, what is important to note,
they're not insurmountable.
The New Deal was about jobs. It was about income.
It was about pension. It was about health.
There are certain enabling goods and services
that people need in order to thrive.
That's a reality.
And just like government facilitated it in the past,
they can facilitate it today.
Only this time, they can do it in a way that is inclusive.
In the meantime, a group of volunteers in Ladera gathered
enough signatures to formally strike the whites-only language from all
534 deeds in the subdivision.
-We didn’t have a statue of Robert E. Lee in our neighborhood.
But we did have this.
And we had the power to get rid of it.
-And I would say that if the pendulum had to go from
you are not allowed
to taking them down,
we now need to say: You are welcome.