A few months back, I wrote about the gap in net worth between African American and White households. According to the most recent study by the Brookings Institution, in 2016, the average White American household has a net worth of $171,000 while the average Black family is worth $17,150 after assets are added and liabilities deducted. A major cause for this wealth disparity is the difference in homeownership rates between the races, with Black households having the lowest homeownership rate nationally at 41.7%, a full 30% behind White households.
Passing down the family home to the kids is the primary way that generational wealth is created and enhanced. The problem is that White Americans have had a major head start with the ability to take advantage of the fruits of the post-World War II housing boom at a time when redlining and race restrictions forbade the selling of homes in good neighborhoods to people of color. These homes appreciated exponentially over the years, allowing parents who purchased a home for $25,000 in 1964 to leave that home to their children in 2023 when it is valued at over $1,000,000 in many cases. Mid- to late 20th Century housing discrimination is a major cause of the wealth gap between the races. I recently learned of a practice during that period that has also been a contributing factor.
This week, I had a chance to see a new documentary filmed and produced in the Bay Area called The Apology. The Apology tells the story of Russell City, a now mostly forgotten, unincorporated settlement 10 miles south of Oakland in Hayward, California. After the second World War, Russell City was a community made up primarily of African American and Latino residents. It was populated by people who were prohibited by restrictive race covenants from purchasing homes in nearby “whites only” communities such as San Leandro and San Lorenzo, California. Russell City was a community that had affordable homes, businesses, churches, and a school. It also had a rich history of blues music, with legends such as Ray Charles and Muddy Waters performing at the town’s nightclubs.
In the late 1950s, Alameda County refused to annex Russell City and provide sanitation and fire services. This contributed to the town’s decline in living conditions and ultimately allowed the City of Hayward to declare it “blighted,” a term used to describe a community as being in a perpetual state of decrepitude. The City of Hayward began buying properties there for the purposes of selling the area to developers.
According to The Apology, few sold. Many of the 1400 residents had been there for years and some had even built their homes themselves. Then, a mysterious wave of arson fires hit homes in Russell City. With no fire department to provide services, the houses burned to the ground. Ultimately, the homes that were left were seized under eminent domain in 1964, which forced homeowners out whether they wanted to leave or not. Many of the displaced residents had no place to go as their homes were all they had. They were paid “fair market value” by the city, which, in most cases, amounted to pennies on the dollar compared to the home’s actual worth. Once the residents were kicked out, Russell City was sold to a developer for over $2,000,000 and warehouses were built on the site that still stand today.
The thing that struck me the most about The Apology was the surviving former residents, now in their 70s to 90s, lamenting the loss of their homes and the value that was taken from them. Had Alameda County or the City of Hayward provided essential services, the conditions in Russell City never would have deteriorated as they did, and those homes could have stayed in the families of their owners, leaving the residents properties worth hundreds of thousands of dollars today to pass down to their progeny. Instead, they were left with little or nothing.
The denial of essential services to areas populated by people of color and their designation as “blighted” so that homes and land could be seized by city and county governments and sold to developers was something that happened to places like Russell City across the country in the second half of the 20th Century. It destroyed generational wealth and contributed to the condition of disproportionate poverty we see among people of color today.
The title, The Apology, refers to the apology desired by the former residents of Russell City for the taking of their properties, their displacement, and their general mistreatment by both the City of Hayward and the County of Alameda. They got that apology from Hayward in 2021. Alameda County issued an apology earlier this year after screening the documentary.