The Fair Housing Act was passed on April 11, 1968, in the midst of a maelstrom. Major civil rights legislation had passed four years earlier, and schools and workplaces were moving slowly toward integration. But the neighborhood was the last stand for segregationists, and they had dug in their heels.

The tipping point was reached on April 4, 1968, the day Martin Luther King, Jr. was assassinated. With protests and riots breaking out in more than a hundred American cities, including the neighborhoods surrounding the U.S. Capitol building, the injustice of racial inequality and the danger of inaction could not have been more clear. Fair-housing advocates seized the moment of opportunity; within a week a reluctant Congress pushed through the legislation.

The Fair Housing Act made discrimination in the public and private housing markets illegal, and carried with it the hope that America’s neighborhoods would no longer be divided by race. In reality, though, the act was largely symbolic. A compromise that facilitated its passage gutted the original legislation’s enforcement mechanisms: whereas fair-housing agencies and the Department of Housing and Urban Development were given the ability to investigate claims of discrimination, they were not given the power to issue enforcement orders.

Considering the impotence of the law and fierce resistance to the very idea of residential integration, few could have expected that whites would suddenly accept black neighbors with open arms, or that black Americans would eagerly move into neighborhoods where they knew they would be treated with hostility. Not surprisingly, America’s neighborhoods did not desegregate overnight.

Yet one might argue that the true test of the civil rights era did not lie with the generation of adults who lived through the 1960s, but with the next generation, who entered adulthood during a time in which discrimination was forbidden by law, when social norms were gradually changing, and the memory of de jure segregation was fading. This generation should offer the best indication of whether the Fair Housing Act, combined with other civil rights legislation, succeeded in opening up pathways of upward mobility for black Americans. We now have the data to assess whether the children of the civil rights era have achieved the promises of the period.

Based on the optimism of the time, one might have predicted that American society would be moving steadily (if slowly) toward racial equality, even if equality has not yet been reached. Instead, the story of neighborhoods and race in America is one of continuing inequality. By looking back over the past four decades and studying families’ trajectories over generations, we come to a clearer understanding of why racial inequality has been so persistent. Equally important, a historical perspective also offers clues to how we might construct social policies with the potential to disrupt the cycle of disadvantage within urban ghettos and make progress toward equality.

* * *

Economists and sociologists typically study social mobility by comparing the income (or occupations) of one generation of family members with that of the previous generation, and asking how much influence social origins have on one’s destinations. The comparison provides a simple way of describing how “open” a society’s rewards are, or the extent to which parents transmit economic and social advantage (or disadvantage) to children. While this line of research has provided a wealth of information about the transmission of economic status across generations, virtually nothing is known about continuity and change in families’ residential environments over long periods of time. This is true despite the fact that many of the key factors influencing an individual’s life chances—the quality of the schools he attends, his political influence, even his exposure to healthy and unhealthy environments—depend directly on where that individual lives. Thus, to understand inequality in America it is essential to think beyond individual or family resources and to consider the ways in which inequality is organized or clustered in communities and neighborhoods.

A half-century of public policy has served to reinforce the walls of the ghetto while systematically disinvesting in black urban communities.

Only recently have data become available that allow one to do just that, by tracking the neighborhood environments of white and black families over successive generations. The Panel Study of Income Dynamics, a University of Michigan survey of about five thousand American families that has been running since 1968, has interviewed the same families on a yearly basis. It is unique in following the children of the original sample as they split off from their families and branched out, whether they moved across the country or down the street. The study thus allows for an empirical look at a question that has taken several decades to answer: Did the legislation of the civil rights era, most notably the Fair Housing Act, allow black children to advance out of America’s poorest, most segregated neighborhoods?

There is an unambiguous answer to this question, and it is very different from what fair-housing advocates imagined back in 1968. For the large majority of black families, the ghettos of the civil rights era have been passed on from parents to children, with little change. Specifically, if we define a ghetto neighborhood as majority black and among the poorest quarter of all American neighborhoods, then about 29 percent of all black families have resided in the ghetto for consecutive generations. If we limit our focus to include only black adults living in today’s ghettos, about 72 percent were raised by parents who also lived in the ghetto a generation earlier. In other words, almost three out of four black families living in today’s poorest, most segregated neighborhoods are the same families that lived in the ghettos of the 1970s.

The persistence of the ghetto in the lives of black Americans reflects a broader pattern of continuity in neighborhood conditions across generations of family members. My research using the Panel Study of Income Dynamics compares the neighborhood environments of all sample members from one generation to the next and shows that neighborhood advantage and disadvantage are both typically passed on from parents to their children.

Consider, for instance, the first generation of a hypothetical family that lives in a very poor neighborhood. Imagine that in this first generation, the average income in the family’s neighborhood is half of the national average. Based on the evidence available on the relationship between the neighborhoods of parents and their children from the 1970s to the present, it is possible to simulate how this family’s neighborhood environment would be expected to change with each passing generation (assuming the current rate of intergenerational mobility remains the same in the future). What the exercise makes clear is that inequalities that exist in a given generation fade away over time, but they fade extremely slowly.

In the second generation, the children in our hypothetical family could expect to live, as adults, in a neighborhood where the average household income among all neighbors is about a third lower than the national average. In the third generation the grandchildren of our original family could expect to live in a neighborhood that is about twenty percent less affluent than the average American neighborhood. It is not until the fifth generation that the great-great grandchildren of our original family can expect to live in a neighborhood where the average income is within ten percent of the national average. If we think of a single generation as lasting roughly 25 years, this means that a full century will pass before the descendants of a family starting in a very poor neighborhood can expect to live in a neighborhood where the distribution of residents’ incomes is similar to that found in the average American neighborhood. This exercise, although hypothetical, provides perhaps the clearest illustration of how persistent neighborhood advantages and disadvantages are across generations of family members.

What does this mean for families and neighborhoods that aren’t hypothetical? It means that the stark racial inequality that existed a generation ago has been passed on, with very little change, to the current generation. The families in America’s worst neighborhoods, where violence is common, schools are failing, economic opportunities are limited, and public resources are sparse, have been exposed to the same disadvantaged neighborhoods continuously since the 1970s, over two generations.

To put it differently: the ghetto appears to be inherited.

This observation raises at least two important questions about race in America: first, four decades after the passage of the Fair Housing Act, where did America’s movement toward racial equality go astray? And second, what policies can end the cycle of intergenerational disadvantage?

* * *

Black Americans have not made substantial progress in residential America largely because of a multifaceted set of policies that have maintained residential segregation in urban neighborhoods and served to limit black upward mobility, even in the post–civil rights period.

This process has consisted of several overlapping elements, the first being the inability and/or unwillingness of the federal government to enforce fair-housing rights. The compromise that made passage of the Fair Housing Act possible also made it extremely difficult to prosecute claims of discrimination. Although the most blatant forms of institutional discrimination, such as the use of restrictive covenants that prohibited homeowners from selling to blacks, have been largely eliminated, the best evidence available demonstrates clearly that informal discrimination remains common in America’s cities. For example, in 2000 the Department of Housing and Urban Development sent pairs of individuals, one white and one black, to apply for rental units or to search for homes in various metropolitan areas. The pairs were assigned identical income, assets, and debt levels, and were assigned comparable “background” characteristics. More than twenty percent of tests showed that whites were offered more “favorable” treatment in the rental market, meaning they were provided more information or were able to inspect the unit. In the home-sales market, whites were given favorable treatment in seventeen percent of all tests. These results actually show improvement over the same tests conducted a decade earlier, but they make clear that racial discrimination is not an issue of the past.

Second, beginning in the post-war years and continuing to the present, massive federal programs have served to subsidize white suburbanization, while black urban populations have been increasingly consolidated within centralized public housing. Federally subsidized mortgage programs, run through the Federal Housing Administration and the Veterans Administration, made home ownership available on a broad basis for the first time in the post-war years. However, because the official guidelines of these programs used the racial composition of neighborhoods to determine the risk of a loan, neighborhoods in cities with large non-white populations were largely excluded from opportunity offered by government-backed mortgages. The home ownership boom never reached non-white populations in America’s cities. Zoning laws within cities and expanding suburbs also allowed local governments to exclude unwanted neighbors indirectly by limiting the types of housing that could be built—for instance, by requiring new housing to be single-family homes with minimum lot sizes.

While the federal government invested heavily in white, suburban neighborhoods, it acted to consolidate black populations within cities. In the 1950s and ’60s, under the auspices of urban redevelopment, a systematic effort was made to clear urban slums that were threatening to expand into white neighborhoods, and to re-house slum residents in high-density public-housing complexes typically located within black neighborhoods. This policy marked a shift from decentralized slums to centralized public housing and brought about an entirely new level of concentration in urban neighborhoods by race and class. As Doug Massey and Nancy Denton note in American Apartheid (1998), the segregation that arose from this period of urban redevelopment was the “the direct result of an unprecedented collaboration between local and national government.”

Equally important has been the combination of structural changes to urban labor markets and the damaging federal response to widespread economic dislocation within America’s cities. William Julius Wilson was the first scholar of urban poverty to recognize the impact of deindustrialization on urban neighborhoods, especially in former industrial centers in the Northeast and Midwest. As Wilson observed in The Truly Disadvantaged (1990), the decline in manufacturing jobs within urban centers created widespread joblessness and combined with changing demographic patterns in America’s cities to create a new kind of concentrated poverty. The new ghetto neighborhood was characterized by economic dislocation, the loss of core community institutions, deteriorating family structures, and rising violence.

The movement of manufacturing jobs out of cities was not an inevitable result of technological change in an open market. It was facilitated by the federal government’s investment in roads and highways, which made it possible for workers to move to the suburbs and firms to vacate central cities. Political scientist Peter Dreier describes how the government worked directly with leading defense contractors to facilitate their exodus from central cities, which gave these firms the opportunity to avoid the reach of big-city unions and politicians.

Instead of investing in urban neighborhoods to mitigate the impact of deindustrialization, the government has exacerbated the problem. Federal aid to cities has been wildly erratic over the past several decades, especially in the realm of public housing. Fluctuations in aid made it difficult for local housing agencies to create sustained financial support for public housing, leading directly to the rapid deterioration of such projects in many central cities. Sudhir Venkatesh describes this process in detail in his remarkable account of Chicago’s Robert Taylor Homes housing project, American Project (2000). Robert Taylor, once a symbol of progress for blacks living in one of America’s most segregated cities, was gradually abandoned by local police and the Chicago Housing Authority and allowed to deteriorate into a notoriously violent and gang-ridden project. It became a symbol of the violence and poverty that characterized urban ghettos in the 1980s, but the process of federal and local abandonment behind the project’s demise is often overlooked.

Perhaps more than any other policy, demographic trend, or economic change in the post—civil rights era, the explosion in incarceration rates from the 1970s onward has devastated black communities. In the late 1960s our government began a decades-long effort to address widespread urban unrest and economic dislocation through a policy of mass imprisonment focused almost exclusively on black men. The scale of this effort is unprecedented. Sociologists Becky Petit and Bruce Western estimate that black men born in the late 1960s have about a twenty percent chance of spending time in state or federal prison by their early 30s. Imprisonment has become so common among this population, they argue, that there is now good reason to conceptualize prison as one of the major stages in black men’s life cycle, alongside traditional steps such as entering the workforce or parenthood.

The movement toward mass imprisonment has evolved in a series of legislative actions that have made it progressively easier to address economic dislocation and urban unrest by locking up young black men, and it has been disastrous for the African American community. When young men go to jail they are separated not only from their families, but from any opportunities to obtain education, experience, or skills that are useful in the labor force. When they return, their criminal record makes them virtually unemployable, and the pathologies of everyday life in America’s prisons make it difficult to re-engage in the social life of a community.

To be sure, some measures have been taken to reduce inequality or to mitigate the problems facing urban America. However, policies intended to stem racial inequality in our neighborhoods—for example, the Community Reinvestment Act, the creation of federal enterprise zones, and more stringent fair-housing enforcement—represent piecemeal efforts that do not compare in either scale or effectiveness with the policies that have preserved the racial order in residential America.

Within this policy context, it is not surprising that upward mobility out of the ghetto has been so rare among African Americans.

What have been the consequences of life in the ghetto, over multiple generations, for black America? A common theme in many of the classic sociological texts on urban poverty is that the reproduction of black poverty from one generation to the next is closely related to the lack of opportunities, and there is growing evidence confirming this connection. In my research I find that neighborhood inequalities during childhood are an important reason why the current generation of black adults has experienced so much less upward economic mobility than whites. Several recent studies also suggest that the full influence of children’s neighborhood environments is not necessarily felt immediately, but lingers on to help shape the developmental trajectories of youth as they move into adulthood.

* * *

These findings suggest that to understand American inequality—and particularly racial inequality—a shift of thinking is necessary. We must conceive of inequality as something that occurs over long periods of time and structures the opportunities available to families over multiple generations.

Thinking in terms of generations rather than snapshots is also essential to developing solutions to the problem of urban poverty. The walls of the urban ghetto have been solidified and reinforced over the past half-century, and it is a mistake to think that they can be dismantled in a single year or with a single policy approach or intervention.

Reducing discrimination in the housing and lending markets, for instance, is important from the perspective of racial justice, but the evidence available suggests that doing so probably will not have much effect on racial inequality by itself. A second popular approach is to deconcentrate poverty by scattering public-housing units throughout cities or offering their current residents vouchers to be used in the private market, rather than warehousing the poor in projects. Again, providing opportunities for residential mobility is clearly an important piece of any legislative agenda designed to promote racial equality, but it has limits.

We know from the recent Moving to Opportunity experiment, where residents of public housing in five cities were given vouchers that could be used in low-poverty neighborhoods, that voucher recipients typically move to areas that are in close proximity and similar in demographic composition to their original neighborhoods. They often return to increasingly poor neighborhoods as time goes by, not because families prefer to live in disadvantaged neighborhoods, but because of constraints in urban housing markets, social ties to their origin communities, and the perception that they would be treated with hostility if they were to move to predominantly white neighborhoods. Further, the long and continuing history of racial tension in urban neighborhoods suggests that if residential mobility programs were instituted on a broad basis they would almost certainly lead to intense community opposition in the receiving neighborhoods.

In short, one of the lessons provided by programs such as Moving to Opportunity is that the legacy of racial conflict in urban America cannot be wiped away with a housing voucher. The limits of this approach should prompt a shift in how urban-policy makers confront the problem of concentrated poverty. Instead of asking, “How can we dismantle the ghetto?” they might also ask, “How can we make the ghetto less pernicious?” In other words, rather than exclusively pursuing a strategy designed to engineer economically diverse, racially integrated neighborhoods, policymakers might focus their efforts on mitigating the consequences of living in areas of concentrated poverty and extreme segregation.

Underlying this alternative approach is the idea that living with poor, black neighbors is harmful not because of unique character deficiencies among poor blacks, but because areas consisting of poor blacks have been the object of severe disinvestment and abandonment for the past half- century. If segregated neighborhoods with concentrated poverty had equal political influence, quality public services and schools, a vibrant economic base, and effective policing, segregation and the concentration of poverty would not be a major public-policy concern.

There is also good reason to believe that if the pattern of disinvestment in urban neighborhoods were mitigated or reversed, economic and racial integration would follow. In Sharing America’s Neighborhoods (2001), Ingrid Gould Ellen makes a convincing case that the primary reason whites avoid neighborhoods with a substantial black presence is the fear that the racial makeup of the neighborhood will bring about a process of deterioration, rising crime, failing schools, and declining property values. What is crucial to note is that it is not solely the race of potential neighbors that is most important, but the implications of race in today’s urban residential markets. This is not to say that racial prejudice has disappeared or that race itself is unimportant, but that race becomes meaningful in explaining residential patterns in part because of everything else that is associated with a neighborhood’s racial composition.

The link between race and neighborhood deterioration is not inevitable. It is the result of a half-century of public policy that has served to strengthen and reinforce the walls of the ghetto while systematically disinvesting in black urban communities. The impact of this disinvestment cannot be reversed with anything less than a similar commitment, in scale and duration, to America’s urban neighborhoods.

This would require not only sustained federal investment in cities, but a shift in the political and economic character of metropolitan areas. The fragmented structure of metropolitan governments pits cities against suburbs for tax dollars and industry, leading to regional bidding wars and tax breaks that make it difficult for local governments to provide basic amenities and social services or to invest in the human capital of city residents. In Place Matters (2001), Peter Dreier, John Mollenkopf, and Todd Swanstrom make the latest and perhaps strongest case for structural changes that would either establish regional governance or provide federal incentives to encourage or require regional cooperation in the delivery of services such as public housing. This approach has gathered steam among urban analysts because it recognizes that potential solutions to the problems facing urban communities cannot be found simply in specific policies or program interventions, but require structural transformations in metropolitan areas that would make it possible for urban governments to invest in local communities and their residents without sacrificing competitive economic advantage.

The most appealing aspect of this approach is that it could lead to sustained resurgence of urban neighborhoods, one that is less dependent on the political mood in Washington or the strength of the economy. Enormous patience will be required for such a resurgence to gain traction. But just as four decades of unsound public policies continue to shape the lives of today’s ghetto residents, a sustained investment in urban neighborhoods has the potential to improve the prospects of city residents and ameliorate racial inequality for generations to come.