The Color of Law: A Forgotten History of How Our Government Segregated America: Summary & Key Insights

For years, Americans have comforted themselves with the story that segregation simply happened—that people of similar race or class chose to live together, and the government merely stood by, neutral and passive. This is what I call the myth of de facto segregation. But the evidence shows something starkly different. From federal courts to local zoning boards, public agencies at every level actively crafted racially homogenous communities and prevented African Americans from owning or renting homes in white areas.

The term 'de jure segregation'—segregation by law—is often reserved for the South before the civil rights era. Yet in housing, such segregation was nationwide. Through documented government actions, black families were systematically denied access to the same housing and wealth-building opportunities granted to white families. Local governments enforced racial zoning ordinances. State legislatures upheld restrictive covenants. Federal agencies incorporated racial maps that codified discrimination. These were not private choices; they were mandates of public policy.

This distinction matters deeply because our Constitution forbids state action that discriminates on the basis of race. If we accept segregation as de jure, we must accept that our nation has ongoing constitutional and moral obligations to undo it. The myth of de facto segregation is not just historically inaccurate—it is a moral escape hatch that allows us to rationalize inequality as unfortunate but unfixable.

One of the clearest examples of government-engineered segregation lies in the Federal Housing Administration’s practices during the 20th century. The FHA, created during the New Deal, shaped modern homeownership by insuring mortgages. But in doing so, it institutionalized racial discrimination through explicit guidelines. The underwriting manuals issued to lenders openly warned against insuring mortgages in or near neighborhoods where African Americans lived. Neighborhoods were graded for financial risk, and those with black residents or even proximity to black neighborhoods were marked in red, giving birth to the term 'redlining.'

This was no marginal bureaucratic footnote—it was a nationwide system. FHA insurance enabled millions of working-class white families to buy homes in newly developed suburbs with low down payments, while black families were effectively frozen out. The federal government did not simply tolerate the private biases of lenders; it mandated them. Entire communities grew around these federal maps, which became self-fulfilling prophecies of value. Houses in redlined areas depreciated because investment was blocked, while those in white suburbs appreciated—launching the great American wealth divide that continues today.

The tragedy of redlining is that it shaped expectations for generations. Homeownership became the primary vehicle for accumulating wealth, and as white families passed assets to their children, black families were kept perpetually behind. The FHA's legacy was not contained in the 1930s or 40s; its distortions echo through the racial wealth gap of the 21st century.