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Urban Renewal's Grandchildren: Remedying the Persistent Effects of Post-war Race Planning

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By David Dante Troutt

David Dante Troutt

Parent Category: Basic Needs

Category: Property, Housing and Land

15 June 2025

Abstract

Excerpted From: David Dante Troutt, Urban Renewal's Grandchildren: Remedying the Persistent Effects of Post-war Race Planning, 52 Fordham Urban Law Journal 91 (October, 2024) (391 Footnotes) (Full Document)

 

At the root of the nation's stubborn racial wealth gap is a federal-local program, launched at mid-century, that until now has not received a comprehensive reckoning of its impact. The urban renewal program was codified in the National Housing Act of 1949 and over its 25-year span cost at least $13 billion dollars in grants and loans to 1,200 participating cities. The staggering financial commitment alone made it one of “the largest public works project in history.” Cities signed on to its generous slum clearance and downtown redevelopment scheme, in part because it was a federal financial lifeline in their post-war competition with suburbs for white residents and tax bases. Forgotten in an already under-appreciated history, however, is the deliberate racial compromise at the foundation of the Act: subsidizing the forced displacement of African American interests in urban property in exchange for the maintenance of white property wealth and population growth in America's cities. Obscured in planning concepts and the politics of decentralized administration, urban renewal's racial compromise institutionalized cumulative racial harms that have stretched beyond the reach of legal remedies.

This Article argues that what galvanized a federal interest in declining U.S. cities was more than slum clearance, housing shortages, and capital flight, but the Great Migration of Black migrants from the Southern United States to cities in the North, Midwest, and West. Mass migration was a harrowing rejoinder to dehumanization, unemployment, and violence in the South as well as a wager of faith on hiring campaigns by industrialists and the Black press in the war-time economy of the North. In response to the swelling presence of Black migrants, the urban renewal program effected a grand racial bargain: the federal government would finance the redevelopment of cities through the expropriation of Black possessory interests in land. Although the program would extend another ten years, by 1964 scholars like Martin Anderson were documenting an estimated four million people were displaced from segregated neighborhoods across the country, about three-quarters of them Black. In many industrial cities, the racial targeting of Black migrants averaged about 10-15% of all Black residents. Forcibly evicted from their homes, businesses, and institutions by the enormous power of government at the federal and local levels, most displacees would go without relocation assistance or compensation into a “second ghetto.” The costly outcomes for Blacks were not unintended or unexpected. Rather, urban renewal was a federal-local program designed to promote the interests of white elites and residents in declining cities and to purge and segregate the growing numbers of Blacks. For the first time, this must be recognized as race-conscious government policymaking.

Race-based redevelopment policy was not an inevitable government choice in 1949. The Great Migration represented a turning point for Black wealth, U.S. cities, and democracy. It surfaced two historic challenges: whether the country beyond Jim Crow's boundaries could offer Blacks a more equitable citizenship, and whether the modern American city could be revitalized for all in the post-war era. Urban renewal responded to both challenges with a racial bargain that sacrificed Black interests. U.S. cities sought a revitalized urban economy based on a northern and midwestern reinvention of the South's racial caste system, this one anchored in geographic boundaries and the colorblind veneer of “redevelopment planning.” Racism, particularly in real estate markets, was treated as a public good -- something that, like a lighthouse, provided a free, inexhaustible resource to all while hurting no one -- except for the Black public, whose interests in law and policy were systematically disaligned with the larger American public.

This race-based diversion of the federal interest authorized local property takings, displacement, and exclusion with immediate and long-term consequences for Black wealth. Black displacees lost the value of their homes, businesses, leases, and communities, usually without compensation. They also paid higher replacement costs in equally substandard housing, a clear violation of the statute. Government takings included the intangible bases for wealth, such as the agency with which Blacks risked migration by summarily demolishing what they had built there. The government took away trust in government when it denied displacees due process without recourse. As one study of urban renewal in Detroit noted, many displacees blamed themselves and “couldn't believe what was happening to them and kept hoping that it would go away like a bad dream.” Instead for many it became ghettoization. In city after city, uprooted Blacks were displaced into even more unwanted segregated neighborhoods where they were denied credit, well-resourced institutions, homeownership, and opportunities for financial growth. Eventually, cities, like so many city neighborhoods, would be associated with Blackness and devalued relative to suburbs.

Suburban wealth creation was the other side of the race-based federal interest at mid-century. At the same time that the U.S. government was financing the purge and segregation of Black urban interests, it was subsidizing the single most important period of white household economic growth in the nation's history. Multiple federal programs made possible suburban homeownership, free college, and extended credit and other wealth-supportive products for millions of American households -- unless they were Black. Suburbs were stamped with an indelible whiteness. Their increased property values were similarly the product of nascent land-use policy, effectuated at the local level and supported by federal programs. The massive urban renewal program helped to condition these two distinctly racialized wealth trajectories. It powerfully codified a colorblind language of planning and redevelopment, local discretion, and public-private partnerships that masked race-conscious national segregation policy in distinctly anti-Black ways. Such power, unless it is affirmatively undone, is lasting; nothing in the aftermath undid it. What began as a city problem would become in the 1960s, 70s, and 80s the “urban crisis.” As a result, most wealth-producing transactions in segregated urban neighborhoods remain devalued today, a chronic economic condition I call racial bargaining.

Reframing urban renewal more accurately is fundamental to an understanding of government power, cities and restorative racial remedies. First, urban renewal has been entombed in a colorblind literature. Scholars from urban planning to history note its racially inequitable impact, but focus on its failures to revitalize the sagging downtown economies of cities during the competition with federally subsidized suburbanization. That view discounts the central role-- and victimization -- of Blacks in its legislative scheme. It ignores the meaning of the partnership between federal funding and local administration that flourished behind the veneer of rational planning principles. The normative intent of colorblind planning policy, I argue, was a race-conscious strategy to keep cities viable for whites by dramatically subordinating the economic interests and physical presence of Blacks. Its failure was not for lack of trying; the Act was amended five times across five presidencies before its demise in 1974. Along the way, federal officials cynically denied -- and sometimes manipulated -- any consciousness of racial impact.

Second, the colorblind veil also masks how urban renewal represents a 25-year program in which local segregation norms were financed and codified by federal law. Urban renewal functioned as an umbrella for more local-based mechanisms of segregation, such as restrictive covenants and redlining, with which it interacted. It gave cover and power to localized discrimination while its rules on property dispossession were validated judicially by deference to local decision-making. The mechanics were justified by colorblind redevelopment language, as Berman v. Parker illustrates. Importantly, that Supreme Court decision also validated a fundamental disalignment between what was considered a public purpose and a Black purpose.

Third, state-sanctioned segregation produced systemic economic costs on people and places that have persisted without accountability. While it would be naive to superimpose contemporary notions of racial equality on the decisions of government actors 75 years ago, nothing justifies ignoring their lasting discriminatory impact. What was clearly wrongful was never mitigated or remedied, even with the civil rights revolution that directly overlapped and followed the urban renewal program. Most of the wealth-retarding harms I analyze here emphasize housing or real estate interests. These interests were precisely those covered in the Fair Housing Act near the end of the urban renewal period. Yet few if any of the injuries I describe are or were reachable by Title VIII. These cumulative racial harms became so ingrained in our norms around cities, race, and wealth that they could be virtually ignored when the civil rights statutes were enacted and remain beyond accountability in the hotly contested decades afterward. The fiscal challenges confronting U.S. cities in 1974 exceeded what cities faced in 1949. The once-bright economic prospects that powered the Great Migration to those cities gradually reversed and devolved into ghettoization. Remedies for anti-Black economic harms have been rare. The wealth-retarding effects of racial bargaining norms have never been formally recognized. Yet, as the Supreme Court recently indicated, remedying identifiable past discrimination in order “to equalize treatment against a concrete baseline of government-imposed inequality” should be of compelling national interest.

The Article proceeds in four parts. Part I sets out the historical thesis of the Great Migration's influence on the dilemma of mid-century cities. Cities faced deteriorating slums, competition with federally subsidized suburbanization, and a growing Black population that seemed to cause both. It explores how Blackness became associated with blight, the timely use of the urban “redevelopment” framework, and its validation by the Supreme Court's 1954 decision in Berman. Part II digs deeper into the structure of the 1949 Housing Act to show how its design facilitated its unprecedented scope. The oft-disregarded provisions on relocation assistance show the contradiction between non-racial goals and racial outcomes that were understood features of the racial compromise. The obstacles to Black wealth mounted. Legal theories on behalf of Black claimants under the Act consistently failed. Multiple co-existing programs of displacement, such as highway construction, restrictive covenants, redlining, and exclusion from suburban housing acted in concert, compounding the negative effects of urban renewal. Part III collects the foregoing threads to assess the empirical impact of urban renewal on African Americans and to critically reframe the program as a national race policy whose effects on wealth persist.

Finally, Part IV offers an architecture of accountability. The analysis recognizes not just what the government did to Black migrants (“affirmative targeting”), but also what it refused to do for them that it was doing on behalf of others (“categorical exclusion”). It begins with a typology of harm derived from a causal chain of losses and divides harms of all types into three buckets: contemporaneous, future, and cumulative. These correspond to the contract-like damages that were due at the time of displacement but never paid, the future benefits Blacks subsidized without compensation by their forced removal, and the cumulative effects of displacement over so much institutional time. Cumulative harm includes the ongoing devaluation of Black financial interests that is characteristic of the segregated neighborhoods to which most Black households were consigned. All three characterize the conditions of racial bargaining under which so many wealth-affecting transactions occur in racially segregated neighborhood markets. This Part theorizes how best to think about government wrongfulness at both the local and federal levels, concluding that while many harms were intentionally caused, there is a special negligence in failing to recognize how each step along the way reinforced the work of segregation to diminish Black wealth. Harms from these wrongs have a dollar value. Part IV also uses a toxic torts eligibility framework that narrows the likelihood of negative impact through three questions associated with the substantial certainty doctrine. It also proposes several remedial programs that would draw benefits from a federal “American Restoration Fund.” The goal is to illustrate how to put Black descendants of urban renewal in as close to the economic position they would be in had they not internalized so many cumulative racial harms. The proposals include direct payments for certain kinds of losses as well as Restoration Grants, Capital Grants, Loans, and other devices that mimic the very governmental benefits that built unprecedented wealth for white families at mid-century.

By arguing for restorative remedies arising from traceable wrongs by federal and local governments, this analysis is kindred to, but distinct from, recent calls for reparations for slavery. However, my hope is that arguments like these frame the nation's responsibility for identifiable racial harms that are too often re-cast in non-racial terms, contested, and disposed of. What is due now is an assessment of race-conscious government policy in the modern era, a conceptualization of its economic harms, and a framework for remediation.

 

[. . .]

 

This Article has attempted to mine what was forgotten to answer for what is. The urban renewal program that Congress enacted -- and that local governments implemented -- under the Housing Act of 1949 deliberately planned for the racial wealth inequality the United States struggles with today. I argued that what was couched in the race-neutral language of comprehensive planning in the national interest was motivated in large part by the race-conscious fears of a rapidly growing African American population in cities outside the South -- the Great Migration. The terms of the Act deliberately facilitated enduring racial segregation of economic outcomes in housing, credit, business ownership, and social mobility. As race planning, these “redevelopment” norms and principles cut both ways. Where forcible evictions and slum clearance produced persistent racial costs for Blacks, zoning and federal mortgage financing produced racial benefits for whites. Lawsuits brought on behalf of Black (and Latino) displacees failed to convince mid-century courts that urban renewal -- together with local restrictive covenants, federal highway construction and national redlining practices -- was siphoning wealth. Even the civil rights laws enacted toward the end of the period have failed to provide a remedy for cumulative wealth losses with an undeniable anti-Black character. Many of these cumulative wealth losses are maintained by basic economic conditions governing and discounting financial transactions in segregated Black communities -- what I call “racial bargaining.” After tracing these government wrongs in law and policy, I outlined an architecture of accountability for the racial wealth gap that continues to affect Black Americans more than any other group.

Urban renewal's scope helped determine its appeal and its impact. What began in the nation's largest cities outside the South was soon adopted in cities of all size, making the program template a national model of segregated redevelopment. Beyond this Article are stories of decimated Black main streets, lost homes, dislodged communities, and displaced families. Urban renewal's combined effects impacted many aspects of productive life in a democracy. I focused on wealth, however, because it is the literal and figurative embodiment of cumulative beneficial experience. Wealth determines life expectancy, inheritance, educational opportunity, business growth, and childhood well-being. Proof of its implications is found in statistics from climate insecurity to death rates from COVID-19 to college attendance. Pick a variable, and wealth explains its valence.

An analysis of the law and policy of urban renewal is, therefore, an analysis of how wealth is democratized in American society. I argued that it was severely retarded, because of a critical misalignment between the perceived interests of a non-Black public and a Black public at mid-century. What if it had been otherwise? What if truly race-neutral planning principles were not only codified in federal law but compelled in local administration? What if 1950s and 60s racial geographies had not also been reinforced with uncompensated displacements and mass takings? What if slum clearance had been the re-housing program it was called, with attendant equal access to federal mortgage financing and other agency-promoting features of wealth creation in the 1950s? Many fewer Black families would probably have been poor, their poverty would probably have been less and the basis for more middle-class wealth accumulation probably would have flourished in their communities, too. That is, even if segregated residential patterns had persisted, the absence of race-conscious abetting by two levels of government might have significantly impacted the racial wealth gap today. Blacks would have participated in the single greatest period of household wealth accumulation, acquiring appreciating assets for their grandchildren. Urban renewal imposed a different plan.

The remedial scheme with which the Article concludes is only a starting point on the way to constructing a more just society through racial wealth restoration. I offer a typology of harms, an analysis of legal wrongfulness, a basis for valuation and eligibility, and some nascent restorative programs. Beyond the econometrics of this framework, I leave for future research the logistics of justice. For instance, if the Constitution supports race-conscious remediation for race-conscious harms, what agency administers it? Who has the power to commit public funds? There is no lawsuit that will produce accountability for racial wealth suppression. If it cannot be compelled by law, then how can a legal basis find a political solution? In our racially polarized moment, national solutions seem unimaginable. What we know is that evidence of race-conscious state action with identifiable harms to a specific racial group is not only an offense to constitutional norms. It is a threat to the democratic beliefs that are the foundation of this country. Our system of laws promises to make people whole in order that they be free, which may be reason enough.

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Distinguished Professor of Law and Derrick A. Bell Scholar, Rutgers Law School; Executive Director, Rutgers Center on Law, Inequality, and Metropolitan Equity (CliME).