Kentucky report by Laurence W. Knowles, University of Louisville--- $1, 894. 00 North Carolina report by Richard E. Day, University of North Carolina Law School 1,725. 00 Tennessee report by Eugene G. Wyatt, Vanderbilt University Law 2, 371.95 Virginia report by Edward A. Mearns, Jr., University of Virginia Law 1, 770. 00 1 The Memphis portion of the Tennessee report was compiled by G. W. Foster, Jr., a consultant to the Civil Rights Commission. Mr. Foster was compensated for his work on a consultant's basis. CIVIL RIGHTS COMMISSION-HOUSING IN WASHINGTON, APRIL 12, 13, 1962 The Commission reaffirmed its 1961 recommendation that the President issue an Executive order on equal housing opportunity on a nationwide basis. The President has since issued such an order. The Commission recommended the following: "Recommendation 1.-That the Board of Commissioners of the District of Columbia issue and effectively implement an appropriate regulation prohibiting discrimination on the basis of race, color, religion, or national origin in the sale, rental, or financing of housing accommodations within the District of Columbia." The Commission pointed to the trend of increasing nonwhite population of the city and the white movement to the suburban areas. Testimony was adduced that discrimination is still apparent in numerous areas, the effect of which is to deny adequate housing to nonwhite individuals, especially better housing. The effect is to restrict Negro families to certain areas. In the suburbs, the discrimination has taken the form of restricting nonwhites to certain areas and, as often has been the case, forcing them out of established areas by abuse of zoning and eminent domain procedures. Some 40 witnesses testified during 2 days of hearings; and in addition 14 statements were submitted for the record. The witness list included individuals of all related areas of interest, such as persons charged with carrying out the Federal housing program, representatives of the real estate profession, attorneys and members of various professional and religious groups, representatives of civic organizations and unions and private citizens. Concurring statement by Rankin and Storey: There is general acceptance that racial restrictions have been established by builders, real estate brokers and lending institutions, and that such practices limit the freedom of choice of citizens. However, it is hoped that the Board of Commissioners will not make this recommendation applicable to sales and rentals by individual owners of the homes they occupy-to do so would be to trespass on individual property rights. The competency of an administrative agency to determine whether the motives of a homeowner are good or bad, selfish or unselfish, etc., is subject to considerable doubt. "Recommendation 2.-That the Board of Commissioners require the suspension or revocation of a broker's license or license to provide housing accommodations issued under the District of Columbia Code where the individual participates or engages in any act prohibited by such regulation as may be promulgated in accordance with recommendation 1." This arises from the findings that certain procedures are and have been used by real estate salesmen and brokers which tend to discriminate. Several witnesses related that the brokers will generally refuse to show a Negro a house in an all-white area, or will flatly refuse to sell to him. Witnesses also stated that certain banking institutions would refuse a loan to an individual Negro attempting to buy into an all-white neighborhood. In answer to these allegations, testimony was adduced at the hearings that the brokers are merely carrying out the instructions of the landowners who placed the land with them for sale, and that they were under an obligation to those clients. Additionally, it was pointed out that the code of ethics of the National Association of Real Estate Boards provides: "The realtor should not be instrumental in introducing into a neighborhood a character of property or use which will clearly be detrimental to property values in that neighborhood." Along this line it is generally considered to be an unethical act by a real estate broker to sell a house to an individual whose presence would destroy the value of land in that area. Additionally, to the charges that the Negro cannot get a mortgage loan to buy into a white area, representatives of banks, mortgage companies, etc., stated that it would result in an appreciable loss of business and would undermine the value of the mortgage by eroding the value of the property. The gist of the argument was that the brokers and institutional lenders must be concerned initially with the security of the property and what they feel will insure the resale value of the property. "Recommendation 3.-That the Board of Commissioners issue a regulation declaring racial and religious restrictions contained in instruments affecting title to real property to be void and of no effect." In addition to the simple refusal to sell to members of a minority race, the witnesses pointed out that another mechanism for discrimination is the covenant not to sell to members of minority groups. Although such covenants are judicially unenforcible, witnesses stated that they are still in general use. The reason seems to be that many people do not know these covenants cannot be enforced, or perhaps that the individual executing such a covenant feels an obligation to keep his agreement. Some witnesses stated that elimination of the covenants would have no real effect on the situation. Others felt that a law should be enacted prohibiting such covenants from being recorded in light of the psychological effect they seem to have. "Recommendation 4.-That the National Capital Regional Planning Council establish a standing committee on minority housing problems to assure that the rights of the members of minority groups are protected in regional plans and to work for equal access to housing for all. "Recommendation 5.-That Congress authorize establishment of a central relocation service for the District to serve all persons forced out of their dwellings because of highway or school construction, urban renewal, or other Government action. This service should include aid in finding decent housing, and providing for financial aid to such families. "Recommendation 6.-That the President request the Justice Department to look into whether acts of the members of the housing and home finance industry in Washington area constitute a violation of the antitrust laws of the United States; and, if so, that the Department institute appropriate proceedings against such members." This recommendation is based upon testimony by several witnesses at the hearings that the practices by brokers, loan institutions, etc., might be violative of the existing antitrust legislation. It was pointed out that this would perhaps necessitate a revised view of antitrust legislation-in the past the necessary "conspiracy" to bring an action within the statute involved price fixing, but it was submitted that there could also be a "conspiracy" to keep certain individuals from buying land. Perhaps the real problem here would be to secure the necessary "conscious parallelism" to show a prima facies violation of the Sherman Act, but it was suggested as a method of combating this discrimination. Again, it was stated that "there is little doubt that the discriminatory behavior of the Washington real estate community effects a restraint of trade within the meaning of the Sherman Act." HOUSING CIVIL RIGHTS COMMISSION (1961) The Commission pointed to the Federal Government's intervention in the field of housing in the past 27 years. The Government has taken significant action toward the creation of low-cost housing in line with the goal articulated in the Housing Act of 1949-"a decent home and a suitable living environment for every American family." The Commission feels, however, that there has been relatively little effort by the Federal Government to insure equal housing opportunities, although many of the States have actively legislated in this field. Of the Federal agencies concerned with mortgage credit, none has attempted to secure equal access to the benefits it administers. The Commission feels the authority is clear-the Constitution prohibits discrimination by reason of race, color, religion, et cetera, and the Civil Rights Act of 1866 recognizes the equal right of all citizens regardless of color to purchase, rent, sell or use real property. This, the Commission feels, is sufficient authority to warrant equal housing. The Commission notes that the present policy with respect to FHA loans and VA loans is to refuse to do business with a builder who has violated a State or city law against discrimination. Thus, if there are no local laws regarding discrimination, the Federal Government in effect acts through these agencies to further discriminatory practices. Additionally, only one of the Federal agencies (Federal Home Loan Bank Board) has adopted a clear policy opposing discrimination. The Commission feels there is a great need for these Federal supervisory agencies to exert full authority to secure equal access to home mortgage credit. In light of its findings, the Commission recommended that the following changes be instituted: "Recommendation 1.-That the President issue an Executive order, stating the national objective of equal opportunity in housing and specifically directing all Federal agencies concerned with housing to shape their policies and practices to make the maximum contribution to the achievement of this goal; and that the President use his good offices to stimulate the participation of all elements of the housing and home finance industries in the achievement of the national objective of equal housing opportunity. "Recommendation 2.-That the President (a) direct FHA and VA, on a nationwide basis, to take appropriate steps to assure that builders and developers will not discriminate on the grounds of race, color, or creed in the sale or lease of housing built with the aid of FHA mortgage insurance or VA loan guarantees; (b) direct FHA, VA, and FNMA to take appropriate steps to assure nondiscrimination by lending institutions with which these agencies have dealings; (c) direct FHA and VA, in selling or leasing reacquired housing, to take appropriate steps to assure that such Government-owned housing will be available on a nondiscriminatory basis; (d) designate open occupancy housing for FNMA special assistance. "This recommendation also included that as to (a) such steps may include an agreement in writing containing a non-discrimination provision; as to (b), such steps may include such an agreement in writing or an “approval" of the lending institution based on nondiscriminatory criteria; and as to (c), such steps may include requirement that the broker acting as agent of FHA or VA must not discriminate." This recommendation is similar to the action taken recently by the President in his Executive order. "The gist of the change would be that no longer would these agencies be bound only by nondiscrimination clauses presently existing under the applicable State law, but also such nondiscrimination clauses would be placed upon their operations within their Federal framework through the 14th amendment. "According to the recommendation, the agencies must take appropriate steps to assure that the parties will not discriminate. As footnoted, the Commission states only that this action may include an agreement in writing containing a nondiscrimination clause, but make no further suggestions as to how such policy might be implemented. "The Commission bases Federal intervention into this area on the premise that 'Mortgage financing is *** the fountainhead of the housing industry,' and in the past the Federal Government has moved to a large degree of control over how privately owned and controlled mortgage credit institutions conduct themselves. The Commission found that often these institutions, as well as banks, were operating discriminatorily, citing as authority the hearings held at Detroit, California, Ohio Conference of 1961, and hearings on the Housing Act of 1957 before the Subcommittee on Housing of the House Banking and Currency Committee (85th Cong., 1st sess. 566 (1957).)” As to whether such policy change could be implemented, the Commission states that each of these agencies could adopt a nondiscrimination policy under their framework. E.g., the act creating the Federal Home Loan Bank System provides, (a) The Board * * * shall have power to adopt, amend, and require the observance of such rules, regulations, and orders as shall be necessary from time to time for carrying out the purposes of the provisions of this act. (Federal Home Loan Bank Act, sec. 17, 47 Stat. 737 (1932), 12 U.S.C. sec. 1437 (1958).) (b) No institution shall be eligible to become a member of, or a nonmember borrower of, a Federal home loan bank if, in the judgment of the board, *** the character of its management or its home-financing policy is inconsistent with sound and economical home financing, or with the purposes of this act." (Id., sec. 4(a), 47 Stat. 726 (1932), 12 U.S.C. sec. 1424 (a) 1958).) The Commission feels that these provisions would be sufficient for the adoption of a policy of nondiscrimination in the Federal Home Loan Bank System, as would similar provisions in the other Federal agencies. "Recommendation 3.-That the Federal Government, either by Executive or by congressional action, require all financial institutions engaged in a mortgage loan business that are supervised by a Federal agency to conduct such business on a nondiscriminatory basis, and to direct all appropriate Federal agencies to devise reasonable and effective implementing procedures." Concurring in part, dissenting in part, Commissioner Rankin cites the danger of "wholesale Federal intervention" in this area. Exacting thought must be devoted to developing limited measures to assure nondiscrimination without infringing the right of financial institutions to pursue their economic policies free from unwarranted Federal control. Yet, he feels some measures should be devised to free mortgage credit from possible discrimination. Dissent by Vice Chairman Storey: Storey is opposed to further intervention by the Federal Government into the affairs and policies of private financial institutions. He notes that a great number of factors motivate an institution in its decision to grant loans or not, and the first duty of such officials is to make a prudent investment. Private institutions will lend their money on a nondiscriminatory basis when it is in their best interest to do it. "Recommendations, such as this, for increasing Federal control assume a totally powerful National Government with unending authority to intervene in all private affairs among men, and to control and adjust property relationships in accordance with the judgment of Government personnel. It is at this level that a more serious and obvious weakness arises, because political employees are seldom absolutely objective. "Therefore, a great deal of caution is needed before succumbing to the politically tempting suggestion of resorting to Federal Government for increased control. "Successful regulation must be limited to issues that cannot be dealt with by voluntary association and, even then, only after imperative need for more extensive Federal intervention into private affairs has been established." The Commission pointed to the necessity for action by the President to implement this nondiscrimination provision because it would not be well coordinated among the necessary agencies unless by Executive order. For these reasons, the Commission reiterates its recommendation in its 1959 Report 538 that such action be taken by Executive order by the President. "Recommendation 4.-That the Federal Government, either by Executive order or congressional action, take appropriate measures to require communities as a prerequisite to receiving Federal urban renewal assistance: "(a) to assure that there is a supply of decent, safe, and sanitary housing for displacees in fact adequate to the needs of the families displaced; and "(b) to provide sufficient relocation facilities to assure the relocation of such displacees into decent, safe, and sanitary dwellings. "Recommendation 5.-That the President direct the Urban Renewal Administration to require that each contract entered into between local public authorities and redevelopers contain a provision assuring access to reuse housing to all applicants regardless of race, creed, or color." These recommendations were suggested to cover those cases where the Commission felt that the procedures of condemnation and eminent domain were used to further discrimination by forcing minority groups to move because of urban renewal but later barred them from reoccupying the new developments. The Commission received testimony that this was simply moving slums from one place to another, if the old occupants are not afforded the oportunity to relocate in the new developments. The Commission found that often the reason for refusal to rent to the old tenants is based on discrimination. The Commission states the Federal Government should retain a larger control over funds. Indeed, "It is the HHFA, however, that possesses and should wield the ultimate power to assure adequate relocation results-the power to withhold certification or recertification. There is evidence that in the past HHFA has not been vigorous in holding local communities to proper relocation practices." (Hearings 1961, p. 92.) "Recommendation 6.-That Congress amend the Highway Act of 1956 to require that in the administration of the interstate highway program, States assure decent, safe, and sanitary housing to persons displaced by highway clearance; that in those localities where there are agencies administering relocation programs, such agencies be made responsible for the relocation of persons displaced by highway construction; and that Congress provide also for financial aid to displaced families in order to facilitate their movement to new homes. "Recommendation 7.-That the President direct all Federal agencies concerned with housing and with home mortgage credit to develop procedures for obtaining information on the availability of home mortgage credit to nonwhites and other minority groups, and the extent to which they participate in the benefits of the housing programs administered by these agencies." COMPARISON OF FUNCTION OF THE CIVIL RIGHTS COMMISSION WITH RELEVANT FUNCTION OF CIVIL RIGHTS DIVISION I. FUNCTIONS OF COMMISSION (1) Investigate allegations that citizens are being deprived of their right to vote and have that vote counted by reason of their color, race, religion, or national origin. (2) Study and collect information concerning legal developments which constitute a denial of equal protection of the laws under the Constitution. (3) Appraise the laws and policies of the Federal Government with respect to equal protection of the laws under the Constitution. (4) Conduct such public and executive session hearings throughout the United States as may be necessary to perform the duties and accomplish the objectives of the Civil Rights Act of 1957. (5) Prepare and submit interim reports to the President and the Congress, and a final, comprehensive report of its activities, findings, and recommendations by September 9, 1959. II. CIVIL RIGHTS DIVISION The following statements appeared in the appropriation request justification for the Civil Rights Division: For fiscal 1959: "In addition to the enforcement of the civil rights statutes it will take on a program of liaison and consultation with law-enforcement agencies and other officials of the States in order to promote understanding of the problems and to place the State and Federal responsibilities in their proper perspective." Commenting on this Mr. W. W. White stated: "We have in mind the great importance of the collection of far greater information-both factually and legally, in the whole civil rights area * * *. We think that without such activity we just cannot do the job." In January 1962, testifying for appropriations for 1963, Attorney General Kennedy stated: "In the field of civil rights the Department's basic policy is to seek effective guarantees and action from local officials and civic leaders, voluntarily and without court action where investigation has disclosed evidence of civil rights violations." Comparison of budgets of Civil Rights Division, Department of Justice, with Commission on Civil Rights |