Toting copies of a thick hardcover titled The Color of Law, students began trickling into the Yawkey Athletics Center early on a Monday evening to claim seats for a lecture by the book’s author, Richard Rothstein. They came to hear the Berkeley scholar tell what he describes as the forgotten story of how America’s metropolitan areas came to be segregated along racial lines—and stayed that way.

More than 150 lecture goers, mostly undergraduates with a sprinkling of faculty and others, wound up crowding the Murray Function Room for the November 6 talk sponsored by the Joseph E. Corcoran Center for Real Estate and Urban Action. In his introduction, Corcoran Executive Director Neil McCullagh braced the audience: “This is a tough topic to explore, and not flattering to all levels of government. And it’s certainly resulted in intergenerational harm.”

Rothstein holds research posts at a few institutions including the Haas Institute at the University of California—Berkeley. He began his lecture by speaking of how the U.S. Supreme Court gradually abolished segregation in many areas of American life, starting in the 1930s with a decision banning separate law schools for African Americans. And yet, to this day “the biggest segregation of all” continues, he added.

He was referring to “the fact that every metropolitan area in this country is residentially segregated by race.” This broad swath of segregation is not only permitted—“we accept it as perfectly normal,” Rothstein said.

The “we” includes citizens, politicians, courts, everyone. According to the author, we’ve developed a myth about residential segregation in metro centers—that it happened just by accident, perhaps because whites chose not to sell houses to African Americans, or because African Americans couldn’t afford suburban homes. This myth has a name, Rothstein said. It’s called “de facto segregation,” as distinct from de jure segregation (separation enforced by law).

The reality, as Rothstein presents it, is encapsulated in the subtitle of his book—“A Forgotten History of How Our Government Segregated America.”

To begin with, he notes that in the early 20th century, neighborhoods across much of urban America were fairly well integrated, partly because there were few cars and most people, black and white, needed to live near their jobs. For his Chestnut Hill audience, Rothstein offered an example close to home—the area around Central Square in Cambridge.

At one time, Central Square was roughly half black, half white. Then, in the mid-1930s, the federal Public Works Administration demolished tenements that had been integrated and replaced them with a housing project restricted to whites. A decade later, a separate project was built for African Americans on the outskirts of the district.

That was the pattern in urban centers from Boston to Detroit to San Francisco—“creating segregation in a neighborhood that hadn’t known segregation before,” said Rothstein, who is also a fellow at the Economic Policy Institute in Washington and the Thurgood Marshall Institute of the NAACP Legal Defense Fund.

Deeds and Misdeeds

The most disturbing aspect of this history comes later, with the post-World War II suburban housing boom.

Fueling much of that boom was the Federal Housing Administration, or FHA, which guaranteed loans for developers of giant subdivisions, most famously, Levittown in Long Island, New York. But there was a stipulation well known at the time: builders could not sell any homes to African Americans, only to whites. In addition, developers had to include a clause in the deed of each home prohibiting sale or rental to African Americans, as Rothstein relates. Yes, these were provisions set down in print, not a “gentleman's agreement.”

In suburban Louisville, Kentucky, a socially enlightened white family took the extraordinary step of buying a home on behalf of a middle-class African American family. After the black family moved in, a white mob surrounded the property. “Protected by the police, the house was firebombed, dynamited. The police did nothing to stop or interfere with the mob’s violence against the home,” Rothstein said. “And after the riot, the state of Kentucky arrested, tried, convicted, and jailed the white seller for sedition.”

Residential segregation by law ended gradually, notably with the 1968 Fair Housing Act (it took Congress another two decades to include enforcement mechanisms in the statute). But Rothstein says the damage was done—permanently.

In 1950, those modest single-family homes in Levittown went for around $7,000 each with no money down (doable for any working-class family with FHA backing). Today they often sell for a half-million dollars, which translates into substantial equity for generations of white homeowners. Rothstein points out that African Americans who had to remain in rented apartments gained no such equity.

He said the result is that today, while African Americans earn 60 percent that of whites, their overall family wealth is only 10 percent of white wealth, on average. “That enormous difference between the 60 percent income ratio and the 10 percent wealth ratio is entirely attributable to unconstitutional federal housing policy practiced in the mid-20th century,” Rothstein said near the end of his presentation. It was one of several moments when members of the audience shook their heads, stunned by the sobering details.

At that point, one might have expected Rothstein to tick off a list of policy proposals for undoing the effects of residential segregation. He offered none.

Any significant remedies would be politically unrealistic, Rothstein explained, and what’s needed first is a “national conversation about the history.” In his book, the author mentions a few possible steps. The most poetic would be his idea of having the government buy homes that come up for sale in white suburbs—and reselling them to African Americans for the going price in 1950, adjusted for inflation. That would be around $75,000 today for a typical home in Levittown.

During the Q&A, a young African American woman asked what could be done about the forces of gentrification, which often bring white professionals into revitalized city neighborhoods while forcing out others, including African Americans who can no longer afford the rising rents. Given the widespread anxieties over gentrification, Rothstein’s response was surprising.

“I think every neighborhood should be gentrified. Every neighborhood should have a mix of affluent, middle class, and moderate- and low-income families of both races,” he said. Some African Americans might be displaced, but the real problem, Rothstein added, is that they often have nowhere to go other than segregated neighborhoods elsewhere—a legacy of this “forgotten history.”

William Bole is senior writer and editor at the Carroll School of Management.