You’ve probably heard the term "de facto" segregation. It’s the idea that people just sort of end up living in different neighborhoods because of personal choices, income levels, or maybe some private prejudices that haven't quite gone away. It feels natural. It feels like a result of the "invisible hand" of the market. But The Color of Law by Richard Rothstein completely shreds that narrative.
Rothstein doesn't just argue that we’re wrong; he proves it with a mountain of evidence that points to a singular, uncomfortable truth: The racial landscape of every major American city was intentionally, systematically, and legally engineered by the government.
We aren't talking about ancient history from the 1800s. We’re talking about mid-20th-century policies—the kind your grandparents lived through—that used the full power of the law to ensure Black and white families could not live near each other. This is "de jure" segregation. Segregation by law. And honestly, once you see the receipts Rothstein pulls together, you can't unsee them.
The Myth of "Accidental" Segregation
Most of us were taught in school that the North was the "good" guy and the South was the "bad" guy. We learned about Jim Crow laws in the South, but when it came to cities like Chicago, Detroit, or San Francisco, we were told the segregation there was just a side effect of poverty or private "restrictive covenants."
Rothstein calls foul.
He argues that the residential patterns we see today are the direct result of unconstitutional government action. If you think the racial divide in your city is just a fluke, you’re missing the biggest part of the story. The federal government, through the Federal Housing Administration (FHA) and the Veterans Administration (VA), basically acted as a segregationist enforcement agency.
It wasn’t just a few rogue landlords. It was a top-down mandate.
How the Government Built the Suburbs (For White People Only)
After World War II, there was a massive housing shortage. The government stepped in to create the suburban middle class. You’ve heard of Levittown, right? It’s often cited as the archetype of the American dream. What people forget is that William Levitt couldn't get the financing to build it from private banks alone. He needed the FHA.
The FHA provided the guarantees, but they came with a catch. A big one.
To get the money, Levitt had to promise that no homes would be sold to Black families. The FHA even required that the deeds to these houses included a clause prohibiting the resale of the property to "non-Caucasians." This wasn't a suggestion. It was written into the FHA’s Underwriting Manual. They literally stated that "incompatible racial groups" should not live in the same communities.
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They even went so far as to suggest that highways or stone walls be built to separate Black neighborhoods from white ones to maintain "property values."
Think about that.
The government used your tax dollars to build a wealth-generating machine (suburban homeownership) and then legally barred an entire segment of the population from participating in it. This isn't just a "social" issue. It’s a massive transfer of wealth that Black families were excluded from. While white families were buying homes for $7,000 or $8,000 in the 1940s—homes that are now worth $400,000, $500,000, or more—Black families were often forced into rental markets or areas where they couldn't build equity.
That wealth gap isn't a mystery. It’s a policy outcome.
Public Housing Wasn't Always for the Poor
Here is something that usually surprises people who read The Color of Law by Richard Rothstein.
When public housing first started during the New Deal, it wasn't for "poor" people. It was for the lower-middle class and working-class families who were struggling during the Depression. And guess what? The government took integrated neighborhoods and used public housing to segregate them.
Take the Techwood Flats in Atlanta. It was an integrated neighborhood. The government tore it down to build public housing and made it "whites only." They did the same thing in cities across the country, building separate projects for Black families and white families, often pushing the Black developments into industrial areas or near toxic sites.
Eventually, as the white middle class was subsidized to move to the suburbs, these public housing units became the "projects" we think of today—concentrated areas of poverty that the government essentially created by design.
The Violence No One Remembers
Rothstein doesn't just talk about boring paperwork and bank loans. He talks about the "state-sanctioned violence" that kept the walls up.
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When a Black family did manage to buy a home in a white neighborhood—often through "blockbusting" or private sales—white mobs would frequently gather to protest, throw rocks, or even bomb the house. You might think, "Well, that's just a bunch of racist neighbors."
But where were the police?
In case after case documented in the book, the police stood by and watched. Sometimes they even encouraged it. In some instances, the police actually arrested the Black homeowners for "disturbing the peace" because their presence caused a riot. When the state refuses to protect your property rights because of the color of your skin, that is a violation of the 14th Amendment. It's state action. It's the law, even if it's the law looking the other way.
Why "Income" Doesn't Explain It
A common counter-argument is that segregation is about money. "Black people are poorer on average, so they live in cheaper neighborhoods."
Rothstein dismantles this pretty quickly.
He points to data showing that even when you control for income, Black families are still more segregated than white families at the same income level. A Black family earning $100,000 a year is more likely to live in a disadvantaged neighborhood than a white family earning $30,000.
Why? Because the "choice" of where to live was restricted for so long that the social and economic networks became entrenched. Plus, there's the issue of the "down payment." White families have had generations to build up "the bank of mom and dad" because of those FHA-subsidized suburban homes. Black families, stripped of that opportunity, don't have the same intergenerational wealth to tap into, even if they have a good salary today.
The Supreme Court's Role in the Mess
It’s easy to blame developers, but the courts were complicit too. For decades, the legal system upheld these practices. It wasn't until Shelley v. Kraemer in 1948 that the Supreme Court said courts couldn't enforce racial covenants.
But here’s the kicker: The ruling didn't make the covenants illegal. It just said the state couldn't step in to enforce them. The FHA continued to ignore this ruling for years, continuing to insure loans only in segregated developments well into the 1950s.
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The government basically operated above the law. Or rather, it made its own law.
Breaking the Cycle: What Do We Actually Do?
Rothstein isn't just interested in a history lesson. He wants us to realize that because this was a policy choice, it requires a policy remedy. We can't just say "well, we're not racist anymore" and expect the map of our cities to change. The damage is baked into the geography.
So, what are the actual next steps? How do we address the legacy of The Color of Law by Richard Rothstein?
Rethink Zoning Laws
Most of the land in American suburbs is zoned for "single-family residential" use. This sounds innocent, but it’s a direct descendant of segregationist tactics. It keeps housing expensive and prevents the kind of density (apartments, duplexes) that would allow lower-income families—who are disproportionately people of color—to move in. Ending exclusionary zoning is a massive first step.
Diversify High-Opportunity Neighborhoods
The government could provide housing vouchers that actually cover the cost of living in "high-opportunity" areas—places with better schools and more jobs. Right now, vouchers often trap people in the same segregated, low-income neighborhoods the government created decades ago.
Targeted Investment
Instead of just "gentrifying" neighborhoods (which often just pushes people out), there needs to be a conscious effort to invest in the infrastructure and schools of historically Black neighborhoods that were intentionally starved of resources. This isn't "charity"; it’s more like a long-overdue repair bill.
Education and Awareness
You can't fix a problem if half the country thinks it happened by accident. Integrating the history of the FHA and local redlining into school curriculums is essential. People need to understand that the "ghettos" weren't a choice; they were a creation.
Moving Forward
The reality is that we are still living in the world the FHA built. When you drive across a highway that cuts a neighborhood in half, or you see the sudden change in tree cover and road quality when you cross a certain street, you are looking at the "color of law" in real-time.
Understanding this history is uncomfortable. It challenges the idea of the American meritocracy. But it also gives us a roadmap. If we were smart enough to engineer such a complex system of segregation, we are certainly smart enough to engineer its dismantling. It starts with acknowledging that "accidental" is a myth.
Actionable Insights for Readers:
- Research your own home's history. Many older property deeds still contain racial covenants. While they are no longer enforceable, seeing the language on your own title can be a powerful wake-up call to the history of your specific plot of land.
- Support "Missing Middle" housing. Advocate for the construction of duplexes, townhomes, and ADUs (Accessory Dwelling Units) in your community. These housing types naturally lower the barrier to entry for diverse families.
- Audit your local school funding. Because school funding is so tied to property taxes—which are tied to the housing values created by the FHA—the system is rigged. Support state-level changes that decouple school quality from zip codes.
- Read the full text. This article is just a summary. To truly grasp the legal nuances, pick up a copy of the book and look at the footnotes. The sheer volume of evidence is what makes the argument undeniable.