America’s poor have become increasingly concentrated in the deteriorating neighborhoods of the inner city.’ Despite the emergence of a black middle class, racial segregation in American cities continues to increase. For the past several decades, both industry and white, more affluent residents have been deserting the older cities of the Northeast and Midwest for the suburbs and the Sun Belt. Federal and local governments bear much of the responsibility for economic and racial segregation in the United States: mortgage financing programs, construction of suburban infrastructure, public housing siting, urban renewal and relocation programs, and even Great Society programs have promoted segregated housing patterns, both by design and in effect.

In recent years a glimmer of hope has appeared for the older deteriorating cities. Housing in a small number of inner-city neighborhoods has been renovated by a new private market, created by young, middle-class consumers, bold lenders, and eager developers who have promoted the attractions of urban life. Federal and local officials have eagerly jumped on the bandwagon of this phenomenon, known as “gentrification,” because it has a visible effect on previously deteriorated areas, and because it reverses the decline of city property tax bases. Others have protested gentrification out of concern for the fate of poor and nonwhite residents who are displaced to make way for the new urban middle class. Serious questions can and should be raised about government programs that aid the affluent in renovating nice homes in quaint neighborhoods to the detriment of the largely minority urban poor. This Note will propose a more farsighted government policy towards gentrification: because of past complicity in creating residential segregation, the Department of Housing and Urban Development (HUD) has an affirmative obligation to resist the resegregation of urban neighborhoods. HUD and local officials should direct their efforts towards achieving a modest measure of residential integration, by race and income, through intervention designed to prevent the segregating effects of the private market. Existing law, in fact, requires such affirmative intervention. The first part of this Note will trace the origins of the federal housing mandate for “spatial deconcentration” of racial minorities and the poor. The second part will present some relevant social science evidence on gentrification. The third part will set forth the legal framework within which HUD and local agencies must act, and the final part will propose legal theories which may be used by victims of gentrification to enforce the federal commitment to desegregation.