Affordable Housing Institute : US

Forty years after Operation Breakthrough, the question remains: is exclusionary zoning (de jure or de facto in high land prices) racist, or merely elitist?

Racial discrimination, or economic?

Westchester County house values

Only one is illegal, and in the case of Westchester County, as reported in the New York Times, it took a curious private-citizen lawsuit to reach, if not a philosophical conclusion, at least a financial and real estate settlement:

Westchester County officials have entered into a landmark desegregation agreement that would compel the county to create affordable housing in overwhelmingly white communities and aggressively market it to non-whites in the county and in neighboring New York City.

The agreement, to be formally filed Monday [August 17 – Ed.] in Federal District Court in Manhattan, would end three years of litigation by the Anti-Discrimination Center over Westchester’s responsibility to enforce fair-housing goals.

Curious too is how the case was brought. It wasn’t brought by either the New York Attorney General or the US Department of Justice, either of whom have jurisdiction over discrimination. Instead it was brought by a private party.

“Residential segregation underlies virtually every racial disparity in America, from education to jobs to the delivery of health care,” said Craig Gurian, executive director of the Anti-Discrimination Center, which filed the suit under the federal False Claims Act.

Craig Gurian (at right) counseling other clients

False claims? What do false claims have to do with desegregation?

The False Claims Act (31 U.S.C. § 3729–3733, also called the “Lincoln Law”) is an American federal law which allows people who are not affiliated with the government to file actions against federal contractors claiming fraud against the government. The act of filing such actions is informally called “whistleblowing.” Persons filing under the Act stand to receive a portion (usually about 15%-25%) of any recovered damages.

By authorizing contingency payments to winning citizen plaintiffs, the False Claims Act turns ordinary citizens into tort bounty hunters.

Concerned citizens helping the government do its job

The False Claims Act, passed by Congress on March 2, 1863, was an effort by the USA to respond to entrenched fraud where the official Justice Department was reluctant to prosecute fraud cases.

Two months after the Emancipation Proclamation, and as part of Lincoln’s strategy for winning the Civil War, because an army that is corrupt is an army that cannot win.

The False Claims Act passed two months later

Importantly, a reward was offered in what is called the “qui tam” provision, which permits citizens to sue on behalf of the government and be paid a percentage of the recovery. Qui tam is short for the Latin phrase “qui tam pro domino rege quam pro se ipso in hac parte sequitur“, which means, “he who brings a case on behalf of our lord the King, as well as for himself.” In a qui tam action, the citizen filing suit is called a “relator”.

Like RICO, another statute whose financial potency has turned it into a lever of choice for ex parte citizen litigation, the False Claims Act sicks a financial terminator on the target, eventually forcing a confrontation.

You defrauded the government

To bring Westchester within its sights, the Anti-Discrimination Center had to connect the county’s alleged passivity to a frauduluent claim:

Westchester officials had originally dismissed as “garbage” the lawsuit’s premise that the county had fraudulently claimed that, as a condition of accepting federal funds, it fully complied with mandates to provide affordable housing without furthering racial segregation.

Just north of New York City, an original affluent suburban county

These Federal financial mandates date back to George Romney’s Operation Breakthrough, to which I’ve previously alluded and about which I intend to post one day. Breakthrough was envisioned as both a housing-affordability strategy (breakthrough technology) and a segregation-buster (breakthrough zoning barriers of prejudice), and that’s certainly how the Anti-Discrimination Center framed its case:

“Westchester, belatedly acknowledging its authority to do so, is obligated to take legal action against resistant municipalities where needed to fulfill the affirmatively furthering fair housing purposes of the settlement,” Mr. Gurian said.

Brokered by the Department of Housing and Urban Development, the agreement promises to spark challenges to suburban counties across the country that have resisted pressure to undo decades of residential segregation.

It’ll certainly trigger many more False Claims Act cases, now that the Anti-Discrimination Center has provided the road map, and hit the jackpot:

And 15-25% of it is yours

The false claims suit by the Anti-Discrimination Center, a nonprofit group, and the settlement, apply to towns and villages in Westchester.

The cities operate separately from the towns and villages – which turns out to matter

The federal government deals directly with the cities in the county, among them Yonkers, which nearly went bankrupt before capitulating two years ago in a housing segregation case that dragged on for 27 years.

Exempting the cities really changes the settlement and desegregation dynamics, as can be seen by the next chart:

The blacks live in the cities

With a few microscopic exceptions, Westchester’s blacks live in Peekskill, Mount Vernon, New Rochelle, and White Plains. Only Greenburgh/ Elmsford both is a non-city town/ village and has a large black population.

The agreement calls for the county to spend more than $50 million to build or acquire 750 homes or apartments –

It sounds good, but that’s only $67,500 per apartment. No way will that be sufficient.

It is subject to approval within 45 days by the county Board of Legislators, which is also required to approve a $32.9 million bond sale to help finance the housing.

That’s another forty grand an apartment. Still nowhere near enough.

Think that’ll cost under $100k apiece? New construction in Eastchester

– 630 of which must be provided in towns and villages where blacks constitute 3% or less of the population and Hispanic residents make up less than 7%.

To put that in context, Westchester County’s total population is about 950,000. If we presume three people per household (a high number, and therefore conservative in terms of households), Westchester County has 320,000 households; adding 750 affordable apartments represents one-quarter of one% (0.25%) of the total housing stock.

Among the towns and villages in which blacks constitute less than 3% of the population and would theoretically be eligible for affordable housing under the settlement are Bedford, Bronxville., Eastchester, Hastings-on-Hudson, Harrison, Larchmont, Mamaroneck, New Castle, Pelham Manor and Scarsdale.

We can also examine it by people, since Westchester has a cornucopia of statistical information, such as this Census 2000 report:

Hispanics constitute the largest minority group in the county. Also, Hispanics were the fastest growing group of immigrants, totaling 144,124 residents. Hispanics now account for 15.6% of the county’s total population compared to 9.9% in 1990.

The Asian population also grew by 27% between 1990 and 2000. There are now

41,367 Asian residents who make up 3.7% of the county’s total population.

African-Americans also increased from 114,652 in 1990 to 131,132 in 2000. They now account for 14.2% of the county’s total population compared to 13.1% in 1990.

Blacks moving to the cities: Westchester’s report, Page 37

By contrast, the number of residents identifying themselves as white dropped by 35,450 to 658,858. While they remain the largest group in Westchester, whites make up a smaller percentage of the total population than they did in 1990. They now account for 71% of the total compared to 79.4% in 1990.

If 750 new affordable apartments house 3,000 people (at four per household, poor families often having larger households especially when compared with elderly), they all go to non-Hispanic blacks, then roughly 2.5% of Westchester’s black population will move from more-concentrated to less-concentrated areas.

Yet that’s the problem with using affordable housing as a desegregation proxy – you can’t legally target it to a particular race, for that violates every fair-housing protocol imaginable.

Will the homes be filled by blacks and Hispanics? Does poor = black and black = poor?

These things are not equivalent

The county has seven years to complete the construction or acquisition of the affordable housing units.

My goodness, that’s a long interval for so few homes or apartments.

It was not immediately clear where the new houses and apartments would be placed, although the settlement says that priority should be given to sites near public transportation.

At this point, I realized that the judicial win may well prove no policy solution.

Did we win?

[Continued tomorrow in Part 2].

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