Yesterday we delved into Westchester County’s recent settlement, as reported in the New York Times, of a desegregation lawsuit.  Via a clever legal end run, it was brought against the county by the Anti-Discrimination Center, using the False Claims Act:

The case was litigated by Mr. Gurian and the center’s lawyer, John Relman. Their argument that the county had largely ignored local impediments to affordable housing –

Ever since Lyndon Johnson, it has been the Federal government’s thesis that since overt racial discrimination is illegal (under Brown v. Board of Education as well as numerous Equal Opportunity statutes), communities seeking to exclude minorities adopt camouflage, usually in the form of exclusionary zoning.  The Federal government has therefore made embrace of affordable housing the talisman of anti-discrimination, and has bestowed or withheld Federal funding based on cities’ and towns’ affirmative declaration that they are taking housing-affordability steps.  As Charles M. Lamb put it in Housing Segregation in Suburban America since 1960:

[Under George Romney], housing desegregation became a primary concern in the allocation of all HUD financial assistance, regardless of the specific program. By virtue of HUD’s interest in housing desegregation, Breakthrough soon came to represent more than a large-scale attempt to build low-cost housing; it was used to help spearhead desegregation.  

In Romney’s mind, suburban housing integration would also partly solve the thorny problems of segregated schools and minority unemployment. 

In return, not only would local governments receive low-income housing, but they would be given highest priority when applying for other forms of HUD assistance. If this carrot proved inadequate to implement Breakthrough, Romney threatened to rely on the stick as well, cutting or even revoking HUD assistance to communities refusing to cooperate.   Pages 63-64.

Remaking America: George Romney

Ever since Romney, localities that fail to adopt and implement anti-discriminatory policies can be denied Federal assistance, a requirement that had until recently become largely a rote affidavit, merely another of a long list of affirmations and declarations to be signed without thinking, and filed without reviewing.

Until, that is, the energetic lawyers opened up a False Claims suit and sought to show that Westchester’s deeds failed to match its words:

– was based, in part, on testimony by Andrew A. Beveridge, a sociologist at Queens College of the City University of New York.  

Beveridge’s graphic: blacks in tiny pockets

Judging by his CV, Dr. Beveridge specializes in these judicial expert-witness situations, which by itself is no disqualification, although it suggests he brings a perspective as well as extensive experience. 

Separating racial discrimination from economic: Beveridge

[His complete report is here, in .pdf, downloadable but not extractable, which is annoying since I'll have to retype the relevant quotes.]

[Many pages of statistical correlations, leading to the following.] 

Racial segregation levels are higher than segregation by income.

Forty years after Operation Breakthrough, the question remains: is visible socioeconomic segregation racist, or merely elitist? 

Racial discrimination, or economic?

Westchester County house values

When the affluent households are mapped (see Exhibit H), one can plainly see that there is substantial overlap between areas that have a high concentration of blacks in general, and those that have a high concentration of affluent blacks in particular. 

I can’t electronically extract Exhibit H, which is on page 45, but you can compare it with this page, also from his report:

Affluent blacks live in neighborhoods more black than affuent

This means that many affluent blacks in Westchester County share their neighborhoods with those who are much less well off than they.  (Sections 36-37, page 11)

That’s strong correlative evidence, and it won over the judge:

But the county’s claims were largely repudiated in February when Judge Denise L. Cote ruled that between 2000 and 2006 the county had misrepresented its efforts to desegregate overwhelmingly white communities when it applied for federal housing funds.

Don’t mess with this judge

The judge’s finding of county misrepresentation was based on ironclad logic:

Judge Cote concluded that Westchester made little or no effort:

To find out where low-income housing was being placed, or

To finance homes and apartments in communities that opposed affordable housing.

In other words, Westchester County had claimed it was actively seeking to desegregate its communities.  Yet Westchester County had failed either to build affordable housing in places with few blacks, or to find out if the market was building such housing on its own.  That’s excellent evidence of bad faith, or at the very least, total indifference.

Andrew Spano, the Westchester County executive, attributed the settlement” to “a historic shift of philosophy” by federal housing officials.  

“The Feds moved on us”: Andrew Spano

Mr. Spano said that the settlement would have “a sweeping effect on communities nationwide” and that he signed the agreement to avoid further litigation and possible penalties.

The county … said that since it had previously invested in affordable housing, “what is different is the locations where the housing must be built.”

The overarching goal, though, is to locate them in the least racially integrated neighborhoods.

It was at about this point in the Times article that I realized New York must lack an essential tool that Massachusetts has:

Not another failure?

New York needs a powerful inclusionary-zoning law like Massachusetts’ Chapter 40B. 

As I’ve posted before, Chapter 40B enables states to compel injection of affordable housing into recalcitrant localities, because it uses the override power of a higher unit of government (the state) to nullify the exclusionary restrictions promulgated by a lower unit (the town or village).

It has only just dawned on me that Chapter 40B works for the same reason the False Claims Act does – it privatizes enforcement by giving private actors a financial motivation to enforce.  Chapter 40B does for affordable housing development what the False Claims Act does for desegregation.  As shown by this map, 40B works – it builds properties in suburban cities and towns:

Notice now many suburbs have 40B properties

Meanwhile, in thirty-plus years of affordable housing here in Massachusetts, I’ve never heard of False-Claims litigation anything like Westchester’s.  Maybe 40B is acting like a vaccination, because any state with 40B or a similar inclusionary zoning statute will never be allowed to zone out of its domains.

Back in New York, will the judicial lever work?  Or will the plaintiffs’ victory be as hollow as that of the massive tobacco-litigation settlement, where the government gave the tobacco companies a quarter-century free run, in exchange for a share of the proceeds? 

Westchester’s got seven years to create a handful of affordable apartments.  We know the money’s totally inadequate to do this, which means either micro-sized apartments or more money must be found. 

Federal housing officials would appoint a monitor to ensure compliance.

It’s still a seven-year window, and by the time it’s over, we’ll have a new Administration.

Even if the agreement is enthusiastically fulfilled in every particular, Westchester will be moving only a tiny number of poorer people into whiter neighborhoods.  Will that make those neighborhoods blacker?

See any anti-black policies here?

Or will Westchester’s domestic workers just being moving out of outlaw in-law apartments?

Given that 120,000 acres of land in the county meet the criteria, Mr. Gurian said, the federal monitor “should have no difficulty making sure that Westchester ends its policy of allowing affordable housing to be off-limits in the most highly white neighborhoods in the county.”

What makes this a conundrum is that, after four decades of using affordable housing to segregate racially, we still don’t know if people are anti-black or anti-green.

How can we line up the incomes with the house prices?

“Affordable” housing is defined by a complex formula, but generally it is meant for working families. In some cases, a family of four could make up to $90,000 and still qualify.

That’s workforce housing, and there’s neither a guarantee nor even a legitimate mandate to ensure those ‘poor’ families are black.  

Or the unaffordable rents?

There is no minimum income level, “but it’s not going to be no-income,” Mr. Gurian said. “This agreement is not focused on facilitating housing for the poorest of the poor.”

Is Westchester County anti-black?  Or just anti-green?

The only minority we don’t like is the no-green group

Mr. Gurian said that while black and Hispanic residents have a disproportionate need for affordable housing, “this is an opportunity-creating agreement, not a guarantee” that the homes would go to members of minority groups.

Thus even if Westchester had done everything the False Claims litigation asserted Westchester did not, the county might still be just as segregated:

The county admitted no wrongdoing, blamed the judge’s ruling on a technicality, [and] said it had always given made affordable housing a priority.

Anti-black policies?  Or just anti-no-green?

We welcome anyone … with money!

Most of the homes would be new construction, although some existing houses and apartments could qualify if the county made them permanently affordable.

(Watch the county start discovering and granting quiet amnesty to in-law apartments being used for domestic workers, then counting them as affordable under the settlement formula.)

What does the Anti-Discrimination League’s expert say?

Dr. Beveridge found that “racial isolation is increasing for blacks, falling slightly for whites” and that “income level has very little impact on the degree of residential racial segregation experienced by African-Americans.”

If that’s so, then how will affordable housing solve it?

How will we encounter it?

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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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