A Long History of Housing Redlining Has Shaped Today’s School Finance Inequity

In Schoolhouse Burning, a fascinating history of public education and racial injustice published in 2020, constitutional and civil rights scholar Derek Black describes school funding inequity based on studies by school finance expert, Bruce Baker: “(W)hen it comes to districts serving primarily middle income students, most states provide those districts with the resources they need to achieve average outcomes… But only a couple states provide districts serving predominantly poor students what they need. The average state provides districts serving predominantly poor students $6,239 less per pupil than they need.” (Schoolhouse Burning, p. 241)

In April of this year, 2022, the Albert Shanker Institute published a new study by Bruce Baker, Matthew Di Carlo and Preston C, Green III that digs deeper into the history of school finance inequity than earlier studies, which have documented inadequate school funding for students living in school districts with higher family poverty. The new study examines the long racist history of housing discrimination and its correlation with today’s school finance inequity across seven U.S. metropolitan areas—Baltimore, the Bay Area, Birmingham, Hartford, Kansas City, San Antonio, and the Twin Cities—during the past century:

“It is, perhaps, more palatable to view unequal educational opportunity as a side effect of income and wealth segregation than it is to see it as the end result of racism and discrimination. Yet the reality is that economic segregation, while interdependent with racial/ethnic segregation today, has its roots in generations of institutional policies and practices to keep people separate based solely on their race or ethnicity. Racism built the machine, even if economic inequality helps keep it running now.”

Baker, Di Carlo, and Green examine, “the association between modern school funding adequacy (and demographics) and ‘redlining’ maps drawn up during the late 1930s. These maps , which were commissioned by the Home Owners’ Loan Corporation (HOLC), assigned A-D grades to neighborhood across the United States. The grades ostensibly assessed home lending risk, but they were based in no small part on the race of neighborhoods’ residents. The distribution of grades, therefore, roughly reflects both the segregation situation at the time and general (racialized) risk assessments that directly or indirectly influenced not only HOLC aid but also other federal (e.g., Federal Housing Administration, Veterans Administration) loan insurance decisions going forward, a practice known today as redlining…. The vast majority of neighborhoods that received lower (C or D) HOLC grades between 1935-40 are today located in school districts serving larger shares of Black and Hispanic students… Schools located in previously C-/D- graded zones are also typically those serving lower-income neighborhoods today…. Virtually all (school) districts that contain a large area of C-/D- graded HOLC zones are today funded below estimated adequacy levels.”

Here is how housing redlining across metropolitan areas of our nation has affected school funding over the past century: The ‘first order’ effects of segregation on wealth and income inevitably play out in ‘second order’ effects on local property tax revenue for K-12 schools. Most notably within most of our metro areas, the typical Black or Hispanic student’s district receives less local property tax revenue than does the typical white student’s district. State general aid in most areas closes at least part of the gaps, but, in any case, these resource disparities must be evaluated with an eye on a ‘third order’ effect of segregation on funding: The concentration of poverty in racially isolated areas not only depresses revenue, but also increases educational costs. That is, districts serving larger shares of high-needs students must invest more to achieve the same outcomes. This creates (and sustains) unequal educational opportunity—i.e., large gaps in the adequacy of school funding between students of different races and ethnicities living in the same metro area.”

Baker, Di Carlo, and Green conclude: “We establish… that, both nationally and in all seven metro areas upon which we focus in this report, Black and Hispanic homeowners, relative to their white counterparts, own homes of lower value and pay higher effective property tax rates. We then show… how these discrepancies—due to interdependent economic and racial/ethnic segregation—translate into not only lower local revenue for the typical Black and Hispanic student compared with their white peers, but also higher costs. The end result is severely unequal educational opportunity, which at each juncture is created and perpetrated by racial discrimination.”


5 thoughts on “A Long History of Housing Redlining Has Shaped Today’s School Finance Inequity

  1. Jan, I’m grateful for your continued efforts to make it clear as possible that inequity in educational funding (and opportunity) is directly related to racism, in particular, housing redlining.
    Richard Rothstein opens his book, the Color of Law: A Forgotten History of How Our Government Segregated America, with an analysis of US Supreme Court Chief Justice John Roberts’ opinion regarding a case about using a students’ race as part of a school integration plan. The ‘Justice’ acknowledges racially separate neighborhoods might result from ‘societal discrimination’ but remedying such racial separation ‘not traceable to [government’s] own actions’ can never justify such a remedy!
    Rothstein is clear in response that his book is written to refute Chief Justice Roberts’ opinion. Indeed, Ta-Naheisi Coates asked Rothstein to pursue in more depth what he, Coates, had initiated in his article for the Atlantic in 2014, The Need for Reparations, as he reviewed redlining and wealth in Chicago. The US government made it essentially impossible by active decree and otherwise that Af-Americans would not be able to use federal funds to find homes in suburbs in the housing boom after WWII. This was active federal policy and, therefore, Rothstein argues that a federal remedy is required, whether you call it ‘reparations’ or something else. Thus, Chief Justice Roberts’ opinion refuted…….. Argument won!
    But consider another perspective on this: why does Chief Justice Roberts miss the issue and is so mistaken? I suggest that he lacks the ground of personal experience and consciousness of gross racial discrimination that US Supreme Justice Ketanji Brown Jackson has. There is this painful fact that the law is not color-blind, but rather the law is soaked in the blood and economics and society of racism and ‘whiteness.’
    The only option for Chief Justice Roberts then is that he might be ‘consistent’ in legal opinions, even if that means ‘consistently blind’. Consistency is the only option left if he is to have integrity. All of us all challenged by that standard. But what if Chief Justice Roberts (and his law clerks) pursued a radical rebirth of being re-educated about justice in america? Then, I might have a concrete occasion to have hope, and not just have Richard Rothstein’s convincing argument that the US Supreme Court must right the wrongs of their fundamental mis-understandings and failed judgements!

  2. I found that the school districts most heavily impacted by vouchers included the 16 districts that were mapped by HOLCOMB and have redlined areas. Those maps can be found on Kerwin institute website. So glad someone looked at this ongoing inequality and punishment. Susie

  3. Pingback: A Long History of Housing Redlining Has Shaped Today’s School Finance Inequity — janresseger | David R. Taylor

  4. Pingback: How Has Standardized Test-Based School Accountability Changed the Way We Understand Public Schooling? | janresseger

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