- Fair housing for all, all human beings, is now a part of the American way of life.

- African Americans were left out in that.

- They subsidize home building in the suburbs.

Then they say it's racially exclusive.

- No Blacks allowed.

That is disgraceful.

- They're still racially segregated today.

- Americans love buying homes.

We dig real estate.

- Where'd those poor people go?

Their homes are gone.

- Homeownership to me, it means freedom.

Black lives don't matter if Black neighborhoods don't matter.

- You can create a social contract and make promises.

We now live in the day when those promises are coming due.

announcer: "Owned: A Tale of Two Americas," now, only on "Independent Lens."

[upbeat music] ♪ ♪ - Get ready to experience... - "Baltimore Flippers."

- Y'all gotta come see this bathroom upstairs.

- Let's do it right.

Take your shoes off.

Uncle Yank right there.

- Uncle Yank right there.

Yeah.

[air horn blares] - That's Uncle Yank.

One, two, three, four bedrooms.

The bathroom in here.

This is the one.

This is the one.

[hip-hop music] Come check the shower out.

Check the shower out.

♪ ♪ All granite.

Huge.

Sexy.

This is a sexy shower.

Me, a woman, her friend.

- [laughs] - Whatever you're into, you know.

- "Baltimore Flippers."

♪ ♪ - Then that's gonna create-- - A puddle.

- It's gonna create a puddle in the middle of the concrete.

- When it should just flow-- - No, no.

- Yeah, if you asking me, I prefer mine to just flow straight out.

- Flow straight out.

- There ain't nothing heavy coming back here, though.

- It ain't nothing heavy, but my whole thing is puddling.

- Homeownership to me, it means freedom, strictly.

As--the more and more I evaluate this world, the more and more I understand that when you don't own anything... you are nothing, you know?

If something happens in this world catastrophic, you gotta have a place that you can go to and say, "This is mine.

No matter what's going on, I own this."

And it means so much to me.

It means everything to me.

If I'm by myself, I tend to savor it.

So peaceful, getting out of the bed, walking around in my underwear, going into the refrigerator, getting out some apple juice or something, and going out on the porch and smoking a cigarette.

You always find a reason to snap out of it.

It's like, you can only daydream so long.

It's not fun when you leave and go home and you back to what they call the trenches.

[dramatic music] ♪ ♪ - From the '30s onward, every single president has spoken of homeownership almost as the basis of citizenship.

Your ability to own a home kind of makes you a citizen.

- The most tangible cornerstone that lies at the heart of the American dream, and that's the chance to own your own home.

- Those of us who have been given positions of responsibility must do everything we can to spotlight the dream and to make sure the dream shines in all neighborhoods.

- All across the country, I say to millions of young working couples, by the time your children are ready to start the first grade, we want you to be able to own your own home.

- Because in order to be secure in their human rights, people need access to property rights.

- We must make sure that every family in America lives in a home of dignity, a neighborhood of pride, and a community of opportunity and a city of promise and hope.

♪ ♪ [dramatic percussive music] [doorbell dings] - Hi, I'm Jim the Realtor.

Here's some tips for home buyers.

Number one, work with a great Realtor.

A good Realtor sells at least one house a month.

Check their sales history on Zillow.

Oh!

[grunts] Americans love buying homes.

In Southern California especially, we dig real estate.

And we forgot about the bubble and all the other trouble, the financing and everything else.

And here we are right back at it, frenzied up, 5, 10, 15 buyers for every house like none of that ever happened.

♪ ♪ Here we are on the 800th video.

I document the real estate market on YouTube.

I got almost 1,500 YouTubes now, and it gives people a real good sense of what's happening.

I'm in Chula Vista today.

That house sold for $1.6, $1.1.

I'm talking millions here.

$1.4.

$585.

I don't know what to say either.

[laughs] But let's go take a look.

What--I don't know what the heck that is.

A dollhouse.

Pool in the front yard.

Slightly unfinished fire pit.

Why are you stealing the trim piece out?

You got me.

All the other appliances, all stolen.

What could have been so nice about those pillars that they had to steal those?

I'm not sure about that.

There's 15 houses on this street.

I think it was at least eight of 'em had loans way over a million.

Well, if you're sitting on a $1.2 or $1.4 loan and you see houses listed for $585, how is that gonna make you feel about making that next payment?

[light music] I'm Jim the Realtor.

♪ ♪ - So what we saw in 2008 was the unwinding of the housing finance system.

What most people understand as a financial crisis or a problem of our housing stock actually is the unwinding of a social contract that was built in the 1940s.

And so understanding that and how the American home was the basis of how we organize the economy and how we organize social stability is an important part of understanding why we are where we are now.

♪ ♪ [funky music] ♪ ♪ - It's still a pretty nice neighborhood here.

How you doing?

Do you know if any of these places here used to be an old firehouse many years ago?

- Uh... - Is it still an active firehouse?

- Yeah.

- Oh, no, this was an old, old firehouse.

Years ago, it shut down.

- Hi.

- Hi, I'm sorry to bother you.

I want-- - Did you ring the bell?

- I did.

- Which one, the yoga or the attorney?

- Well, no.

I was born here many years ago.

And there used to be an old firehouse around here someplace.

Would you know where it would have been?

Might have been here that was converted.

Or there.

That used to be a tiny, tiny firehouse.

But let me just check up a little bit further.

♪ ♪ My mother punched a nun right in the face over there.

When I was six months old, we moved from Little Italy in Manhattan to this area right here.

It was a housing project.

One night, my Uncle Frank was over with his wife and a mob of guys came down this path, all Italian guys, with bats and belts and sticks.

They were on their way to fight a bunch of Black guys.

And they walked past us.

And my Uncle Frank said to my father, "Get this kid, get him out of this neighborhood, and move."

And it was not that long after that that we moved to Levittown.

- I still say you're making a big mistake, Tony.

How could you leave New York, huh?

- Triborough Bridge.

And look, Miss Rossini, you gotta admit, this neighborhood is falling apart.

- How you gonna support yourself, huh?

- Oh, yeah, Miss Rossini, I got a great job at a great place.

It's all green, with picket fences.

[upbeat music] ♪ ♪ - ♪ There's an open road and a road that's hidden ♪ ♪ A brand-new life around the bend ♪ ♪ There's a path you take and a path not taken ♪ ♪ The choice is up to you, my friend ♪ - Aww.

- ♪ Nights are long ♪ ♪ But you might awaken to a brand-new life ♪ ♪ Brand-new life ♪ ♪ A brand-new life around the bend ♪ - Goodbye.

♪ ♪ - Holy-- Wow.

How much you want for that?

- 38.

- $3,800?

- Yeah, right.

- It's a deal.

- Okay.

- [laughs] Levittown is not a rich neighborhood, as you can see.

But what I love about this town is, it's a blue-collar town.

It is what I consider to be the backbone of America.

When America fights its wars, it's people like us who go.

[light music] Levittown was the first community of its kind that was built like this in the nation.

Everybody thought it was gonna fail because he built 10,000 houses like that.

- Coming out of the Second World War, the idea of mass production became something that was truly a reality.

- Hey, kids!

Look!

A whole new world to build.

- The idea that came to a man named Bill Levitt was this: why not mass-produce the elements that go to make up a house just as the auto industry does with the parts that go into a new car?

- When I was living there, it was at a very particular moment, and that was coming out of postwar trajectory that created the need for that type of housing.

[upbeat country rock music] - If you were a returning GI, you could buy a house for as little as $100 down and about $99 a month.

And that was partly because the federal government was insuring your mortgage.

- We had the GI Bill, encouraging construction of new homes, so the whole idea is, your government wants you to have a home.

- So this was an easy way to sort of jump-start the housing industry and make homeownership possible.

- Without those subsidies, lower middle-class families would never have been able to afford the massive movement into the suburbs that we saw in the late 1940s, 1950s, and early 1960s.

- I was a police officer here in Nassau County, and we were the SWAT team as well.

Here's the school I went to, and you know the story about sticking your tongue on a flagpole in the middle of the winter?

- Sure.

- I did that right there.

Right on that flagpole.

I swear to God, I did.

If you couldn't afford to put a down payment on these homes, Levitt would let you rent them with the option to buy.

So he was just terrific.

- Ladies and gentlemen, this is William Levitt, who heads the largest home-building firm in the world.

Bill, all this must have taken an awful lot of doing.

- We had to start from scratch with absolutely nothing.

Everything had to be done at once.

- If you go back to William Levitt, he said, "No man who owns his own home and lot can be a communist, because he has too much to do."

[light music] ♪ ♪ This was a fundamental part of how our political leadership and our country at large understood the bargain.

You get a home, right?

I mean, you have to work.

There are 30-year jobs that go along with it that match the 30-year mortgage.

And then you don't rebel, right?

That's the thing is, you don't revolt if you have a stake in the system.

[babies crying] ♪ ♪ - CBS News now presents a special report on one of the most unusual diplomatic events in recent history.

- So the kitchen debates are one of the most famous moments in the history of postwar housing.

It's basically Nixon saying to Khrushchev that the strength of the American economy is the post-war home and the ability of Americans to purchase consumer durables to fill it.

- So let's compete.

- [speaking Russian] - The system that will give the people more goods will be the better system.

- In this one particular moment, Nixon was right.

♪ ♪ This was the strength of the American economy.

- I can remember, even as a kid, looking at house magazines and seeing these incredible visions of the future.

The house represented in those pages was something that you could aspire to and that was starting to become a reality.

- What a dream.

Imagine how wonderful it would be to live in a house like this.

Just imagine.

- The future becomes the present in the house of the future.

- The house of 1999 will be virtually maintenance-free.

[machine buzzes] Yes, life will be richer, easier, healthier as space-age dreams come true.

[dramatic rock music] ♪ ♪ - And now with channel lock tuning, it tracks the color more automatically than ever.

- It's even a talking alarm clock.

[alarm clock chimes] [vacuum cleaners whirring] - You can enjoy the classic beauty of these rugs for a fraction of the cost.

- But I'll confess, I like the conveniences as well.

- Wouldn't you like to trade in your old kitchen... - For one like this?

♪ ♪ - MasterCard gives me what I want, and anything is possible.

♪ ♪ [cell phone ringing] - Hello.

- Hello.

- Hey, buddy, give me, like, 45 minutes.

- Okay.

- All right, buddy boy?

- [speaking indistinctly] - All right.

Bye.

The only thing that Levitt did that was wrong-- wow, look at that.

The only thing that Levitt did that was wrong, and I'll be the first one to admit this, no Blacks allowed.

No Blacks allowed.

And that is disgraceful.

[dramatic music] ♪ ♪ If I'm fighting alongside a Black man who's willing to die for his country... And he can't buy a house next to me in Levittown, I'm sorry, man, that don't make any sense to me.

♪ ♪ - Why did you select Levittown to live?

- We were looking for a place to buy a home.

We looked at Levittown, and we liked the homes here.

We liked the advantages that Levittown seemed to offer in comparison to other cities.

And we understood that it was going to be all white.

We were very happy to buy a home here.

♪ ♪ - When you come to this neighborhood, you know immediately it's different.

The lawns run together.

There's no real fences.

It gives you a feeling of a parklike setting.

♪ ♪ - I was struck by how familiar it felt.

It was a connection to Levittown, that they both developed as postwar suburbs.

- I believe Gregory Ain when he built these houses, he really built these houses for the veterans coming home from the war.

It was hard for him to get financing for these houses because they were so different.

The whole social part was part of his design and probably also-- I shouldn't even say that, so don't--I'm not even going to-- - Oh, no, I wanna hear you.

- He was a socialist, and I think a lot of the people that moved in here were-- I'm gonna get in trouble for this.

♪ ♪ - My father is Gregory Ain, a fairly well-known California architect from the '40s and '50s.

So these are the letters.

He'll say, "I just came into my hotel room "from an interesting and unexpected visit "through the basement drafting rooms at Yale.

"1 1/2 days at Philip Johnson's jewel at New Canaan.

He is a real fascist intellectual."

[laughs] I started rummaging through some old papers, and then I came across this, you know, 200-page or 100--yeah, 200-page file that the FBI kept on him, and they were watching everything he did from the mid-'40s to the mid-'50s.

Gregory believed that decent housing should be the right of everyone, not just the privilege of very wealthy people.

- Archie, 12% of the population is Black.

There should be a lot of Black families living out here.

- Yeah, this is only a beginning, but I think it's wonderful.

- Well, let's see how wonderful it is when the watermelon rinds come flying out the window.

[light piano music playing] ♪ ♪ - All right.

- [laughs] - Too many notes.

The neighborhood was supposed to be twice as large.

The plans was for 100 homes, and only 52 were built.

- The FHA at the time didn't think that integrated neighborhoods would be attractive to the general public.

And they're providing mortgage insurance, and in their minds, that would bring down the value of the homes.

You know, most people in America, the value of those homes and parents passing that on to their children, that's made the biggest difference.

African Americans were left out of that.

That inability to participate in what created American middle class has a lot to do with the problems we have now.

♪ ♪ - It'd be really interesting to dial it back and think about the longer, deeper history of what housing's meant in the United States, not just that old question of the American dream but the bigger question of who the dream has been for.

♪ ♪ [alarm rings] [bright music] - ♪ It's a good feeling ♪ ♪ To live in Baltimore ♪ ♪ There's something magic in the air ♪ ♪ Just waiting here for you ♪ ♪ ♪ - ♪ It's a good feeling ♪ - ♪ Baltimore ♪ - ♪ It's a good feeling to know ♪ ♪ It's a good feeling ♪ - ♪ Baltimore ♪ - ♪ It's a good feeling to know ♪ ♪ It's a good, good feeling to know ♪ [siren wailing] - [humming] Baltimore is a beautiful little city with a lot of bad habits.

The houses here are beautiful, but what goes on outside the house...

It's tough, it's tough.

As a kid, I didn't really understand how segregated the city was 'cause I never left my areas.

One time, my dad sent me to my godfather's house for a week.

It was, like, literally right outside the city.

And he had a nice apartment complex.

We were in the pool every day.

We were grilling.

People had decent cars.

It wasn't loud at night.

It was fun, but when I got back to the city, we got evicted.

My dad sent us somewhere for the week just to get the house together.

I have moved too many times to count.

I've lived in so many neighborhoods.

It doesn't allow you to gauge what is normal.

This neighborhood still pretty much looks the same.

A lot of these houses are vacant.

We used to go all behind 'em and climb up in 'em, almost like a treasure hunt.

You go in there and find everything that the people had left before they got evicted.

You know, a jackpot, you'd find some pornos or something like that.

[laughs] - Ooh!

- The community didn't feel as empty as it does now when you see all these vacants.

When we was kids, it was just about having fun.

- Baltimore is a microcosm of many urban areas in America, and it is, like Dickens would say, the tale of two cities.

You have great investments in certain parts of town and other investments looking like a ghost town.

- Baltimore, in many ways, is the ground zero for racial apartheid in America.

It's where racial zoning was invented in 1910, and then racially restrictive covenants were also created here.

- We have a myth in this country that the reason neighborhoods are segregated is because people like to live with one another who are of the same race or because African Americans have too little income to move into white neighborhoods or because there's private prejudice that prevents African Americans from buying homes in white neighborhoods.

And that's all true.

But it's a tiny, tiny part of the truth.

♪ ♪ - There's intentionality with the capital decisions that were made around housing in the '40s and in the '50s.

And I think people are lulled to sleep thinking that certain things happen by default rather than by design.

- You have the FHA and the VA, the Federal Housing Administration, the Veterans Administration.

They subsidize home building in the suburbs.

And then they say it's racially exclusive.

It means white people can move out to these areas, but Black people can't.

- What is probably a surprise for a lot of people is that redlining is created by the federal government.

- Michael, what's redlining?

- That's when the white bankers draw red lines around Black areas and don't give up no green.

- The government has to determine, which zones is it going to insure and which zones is it not going to insure?

And it does that based on the racial makeup of neighborhoods.

- Neighborhoods that had a certain number of Black residents would have literally red lines drawn around them on the map.

And they wouldn't insure mortgages in those areas because they believed that the properties would not hold value.

- The bank turned down our loan.

They said I'm a bad risk.

- Why would they say that?

- Banks take up that same practice.

They decide they're not going to lend in those areas.

- That meant that all these benefits that were flowing to potential homeowners were flowing to whites and not flowing to minorities.

It baked this element of racism into our homeownership culture.

- It ain't their problem.

It's our problem.

These people are stepping up in life, and we're moving down.

How much you think our property's gonna be worth with them living two doors away?

- So we passed a law in 1968, the Fair Housing Act.

- It proclaims that fair housing for all, all human beings, is now a part of the American way of life.

♪ ♪ - The mandate that the government's given to not just prevent discrimination but to actually affirmatively go out and say, "How do we desegregate America?"

Except the government betrays that policy.

- I find as I travel across the country that whether we're talking about white Americans or people who may be not Negro but in other minority groups like Mexican Americans, the rest, just like the Black Americans, what everybody wants is an equal chance to have a piece of the action.

- But the federal government has never enforced the Fair Housing Act and to that state and local governments do not enforce the Fair Housing Act.

- And so again, you know, you could have federal policy, but it's the local administration of these policies that often meant that Black people received discriminatory treatment.

- Hello, my name is Tyrone Washington.

I'm calling about the apartment on Park Street.

- It's not available.

- Yes, hello.

My name is Graham Wellington.

I'm calling about the apartment for rent on Park Street.

Is that still available?

- Yes, it is.

- Oh, it is?

- Yes.

- Really?

- And so what does this mean?

It means that the places that were segregated in the '30s, '40s and '50s, they're still racially segregated today because we haven't done anything to undo the racial segregation.

- Yeah, Levittown today is over 95% white.

Very few minority families living there.

- We didn't fix the damage that was done.

We just allowed all those inequalities to continue but said, "From this day forward, we can't discriminate."

So it didn't fix it.

- All these policies and practices, these systems that federal government, state government, local government pass and enact, they converge to sort of create concentrated poverty by the time we reach the '50s and '60s.

So that creates a situation where in many urban areas, you had, like, what George Clinton would call, you know, chocolate cities and the vanilla suburbs.

- What's happening, CC?

They still call it the White House, but that's a temporary condition.

There's a lot of chocolate cities around.

We've got Newark.

We've got Gary.

Somebody told me we got LA.

And we're working on Atlanta.

[funky music] Hey, we didn't get our 40 acres and a mule, but we did get you, CC.

[music winds down] [dramatic music] ♪ ♪ [indistinct chatter] ♪ ♪ - I am trying to tell you that I know now there is no program or promise that a president can make that the federal government can then come in and wave a wand and do this.

[crowd booing] Yes, there is legislation in Congress-- - The condition of Black veterans and white veterans diverged, even though when they returned from the war, they were economically similar families.

Public housing then became a Black phenomenon.

- The people who fall into this category, they have to live where society has pushed them to live.

It's--it's depressing just not to have any kind of nature.

Just torn-down things and people constantly tell you, "You're the cause of this."

- Cities didn't adequately service neighborhoods that were heavily concentrated with African Americans.

Garbage collection wasn't picked up as frequently.

Streets weren't repaired as well.

Conditions deteriorated.

The urban areas became slums.

- Yeah, I would like to rub America's nose in this and say, "Take a look at it.

If you want to reject it, go ahead."

But I certainly would hate to think that anybody thought I said they were giving up hope.

What I'm really saying is that society has failed the hope of the people who live here and struggle here.

That's what I'm really saying.

They're gonna go on struggling anyway, whether we fail or succeed.

[dramatic music] - But at the same time you have concentration, you also have clearance.

You have highway construction which is destroying Black communities.

Highways oftentimes in urban areas are built dead in the middle of Black communities, so there's a sort of rising anger and frustration that takes place.

- Once they became slums, authorities looked at them and said, "Well, we need to do some slum clearance."

- We got a lot of people that need these homes.

These subsidized homes.

We can't afford no other homes.

[explosives booming] ♪ ♪ - Guys, look at that!

♪ ♪ - Where are all those Black people and all those little kids, where are they going?

When they're uprooting that neighborhood, they're messing with our unity.

It takes ten years to reroot yourself.

They know what they're doing.

This is systematic genocide.

Systematic.

- Well, those African American families who were displaced had to move somewhere.

So those families were given Section 8 housing vouchers.

- The idea behind Section 8 is fabulous.

It's exactly what one would hope is that people who are impoverished have an opportunity to move into neighborhoods that are not impoverished.

Unfortunately, for Black Americans, it doesn't work that way.

A large reason for that is, you can still legally discriminate against someone for using a Section 8 voucher.

- So landlords in most suburbs would not accept Section 8 housing vouchers.

- And that's perfectly legal.

- White homeowners deathly afraid of a Black person moving next to them because Blackness is associated with lower home values.

- We feel your presence in the neighborhood can undermine the value of our homes, and we're concerned.

We'd like you to move out before it becomes common knowledge that there's a Negro family in the area.

- It's nothing personal.

- Oh, it never is.

If it was personal, well, I'd feel real bad.

- We grew up in Philadelphia, actually, originally, and we were in an all-Black neighborhood, and my life changed when we moved to South Jersey, not far from some of the Levittown type of neighborhoods.

And when we came in, the police had to come in with us because people were throwing things at our house and terrorizing our house at night.

[siren wailing] We moved there because we wanted a place that was integrated and we just wanted to raise our standard of living, and it was the strength of my parents that said, "This is where we're going to be."

- Do you think a Negro family moving here will affect the community as a whole?

- Definitely.

- In what way?

- I think that, well, the property values will immediately go down if they are allowed to move in here in any number.

- Do you think the Meyers staying in Levittown will affect property values?

- I don't think that the Meyers have anything to do with the property decreasing or increasing.

I think it's purely a white problem, not a Negro problem.

- Well, as a result of all these policies, we created a segregated system.

And because we've forgotten now this entire history of how it happened, white families believe that they got where they are simply by their own hard work and determination to succeed in the middle-class life.

- What they don't understand is that their parents could have came as an immigrant from a white country and immediately had access to loans and the ability to move into white neighborhoods that Black Americans whose families had been citizens for generations could not.

And so it's not saying that their families didn't work hard, but it saying that their families benefited from a great deal of affirmative action to get where they are.

White Americans don't see what it's like to live in these communities.

And so because of that, they are unable to connect with what it is like to be in these areas that have been deprived of every type of opportunity.

Now, how do these communities get seen?

They go for decades in these festering situations.

There are segregated communities that have been completely abandoned.

And suddenly we see them only when they burn something up.

[tense music] ♪ ♪ - This is a world of [inaudible] people crushed by conditions that they don't understand and the rest of America doesn't even want to admit exists.

♪ ♪ - You need to stand down-- - Can you make it out what it is?

- I can't, Al.

- Smoke just billowing out of that entrance to the CVS.

- What can you say behind all this murdering and confusion?

♪ ♪ - He just cut the hose with a knife.

This is a city that is out of control.

♪ ♪ - It happened for reasons we had not been willing to recognize.

And it this riot we must understand that if we're to do something about the dangers that face us now.

- It shouldn't be that hard to understand why that becomes kind of the ultimate outcry, because it's the only way that these communities become visible to most Americans.

[light music] ♪ ♪ - I don't want anything big, big, big, big.

- Wanna get a meatball hero?

- I think so.

- Where is it?

- It's not on there, but he said you can get them.

- What are you gonna do, John?

- I'm gonna get a meatball platter, that's it, no bread.

- I'm gonna get a meatball platter.

- Yeah.

- Why?

- I love meatballs.

- So do I.

- Just a platter of meatballs.

And him.

And he wants a hero.

- Meatball hero.

- Put Parmesan on it too, okay?

- Okay.

One meatball, only meatball.

- Yeah, only meatball.

- Yeah, platter of meatballs.

Platter of meatballs.

♪ ♪ - In 1956 when I came out here, there were farms.

- I was five years old when I came here in 1949.

I came from the South Bronx.

My father foresaw the future in that area.

He says, "Let's get the hell outta here," and we did.

- He had a very... - Unique.

- Outstanding career with the police department.

They took him out of the South Bronx for the benefit of the community.

- No, when I first became a policeman, I was in the riot squad.

And any riot or any type of demonstration there was in the city, I went to it.

Mostly Irish cops on the job then.

And they were nasty.

They would tell you to move and you didn't move, you got the stick.

- I mean, there was law, and you didn't disobey it.

- Protest all you want.

People fought for your right to protest.

But you see guys putting holes in hoses so they can't put out fires, not just to businesses but to people's homes.

Now, you have a right to protest, but you don't have a right to do that.

[doorbell dings] - Are you sick and tired of where you are?

Working hard for years for nothing?

Do you have the guts to step out of where you are to achieve your financial freedom?

- It's pretty easy to do if you just follow my system step by step.

- It's so easy to make money in real estate, and I'm planning to be a millionaire by age 25.

- Look, I just got my first deal, and I'm gonna do many more like this for millions of dollars.

- Made seven deals in 30 days.

Made $15,000 and checks to prove it.

One, two, three, four, five.

- You can do it too.

What are you waiting for?

- I own that one, that one, and this one right over here.

- Now's the time to buy a home.

- Now is the time to buy a home.

- [shrieking] ♪ ♪ - Eeh, Av.

[indistinct chatter] Oh.

Be good for Mom.

- I will.

- You be good for Mom?

- Okay.

I'll be good.

- Seriously, try to be a little less crazy.

- He has a master's in urban and regional planning from the University of Minnesota's Humphrey Institute.

Please give that--Chuck?

- Thank you.

- A well--a warm welcome.

- [laughs] Thank you.

[light applause] A little bit about our organization, Strong Towns.

Our organization has now evolved into a national movement of people trying to reconfigure their communities to be more financially sound.

Post-World War II America, the financing mechanisms of it act very much like a Ponzi scheme.

You have this immediate sugar high with this long-term liability kind of hanging out there in the future.

And the last generation standing is the one that's gonna have to pick up the bill.

We preyed on our fellow Americans just so we could keep the growth going.

And nobody stopped to consider the impact that this was gonna have on real people and real families.

♪ ♪ - I was bird-dogging-- finding foreclosures for other investors.

♪ ♪ I just saw that the majority of wealth created in the United States was through real estate.

So I was determined to follow that track.

It was so much fun.

At the height of-- when we were making money, the company had season tickets to the Lakers right behind the Lakers bench.

So Kobe Bryant's wife, Leonardo DiCaprio literally right in front of us.

And when he used to date Giselle, my son--I'll never forget-- he's 15 years old, Giselle's sitting right in front of him.

Giselle's hair is hanging over the back of her seat.

And Jeff goes, "Dad."

And I go, "What?"

And he goes--and he starts playing with Giselle's hair.

So, I go, "Oh, my God."

[laughs] Anyway, I digress just a bit.

But back in '96, '97, there was a new product that started to flood the market called the 125% loan to value, and when I first started seeing that, I said, "This is a recipe for disaster."

- Are you a homeowner with too many bills?

Too many high-interest monthly payments?

Why not pay them off with a second mortgage?

- They'll lend you up to 125% of the value of your home, less your first mortgage balance.

- They went after the payment buyer.

That's what they did.

Hey, get a $50,000 second for 500 bucks a month.

Go buy that boat.

Go buy that second car.

It wasn't a home improvement loan.

It was a signature loan that you could do whatever you want with.

I just thought it was an exceedingly irresponsible loan product.

But I took advantage of it.

[dog barking] Tiki, come here.

Tiki, come on.

Come on, good girl.

Mikey, Mikey, come here, Mikey.

Hey, hey, Cinnabons, no, no.

The lenders got greedy and they figured, "Okay, we exhausted the 125 potential pool.

Let's go make it super easy to get purchase money now."

- If you were to ask me what the perfect credentials are to qualify for a home loan, I honestly couldn't tell you.

- May I help you, sir?

- Need a quick answer on a new home loan?

- Oh, yeah.

- Stated income, stated employment-- stated, stated, stated-- which means whatever the borrower says is factual.

As recently as 1997, you had to put 20% down, and you had to struggle to save that kind of money.

You fast-forward five years, and a busboy from a local coffee shop can buy the same house for nothing.

- We'll have to verify your credit, so how about a list of creditors?

- We don't have any.

If we can't pay cash, we do without.

- Shh, shh, shh.

What are you saying?

That could ruin the entire American economy.

I mean, where would this country be if we didn't all owe more than we could pay back?

- In order for the house of cards to stay standing, it has to get bigger.

So the guy that's in the three-bedroom, 1 1/2 bath house, he's gotta move up to the four-bedroom, two-bath house.

The house of cards just kept getting bigger and bigger and bigger and bigger and bigger and bigger and bigger.

And it's just all on fake valuations.

Yeah, at that point, the home did absolutely become a vehicle for excess.

- Home prices rising, it's from the Case-Shiller Index.

I look at the number and I say, "Yes, this looks good.

It's much better than expected."

You look at the number and say... - Nobody knows what home prices are going to do.

[shimmering tone] People are increasingly speculative.

When they buy a house, a major concern is, "How much can I sell this to someone else at the other end?"

It can be called the greater fool theory.

Maybe I'm a fool to buy such a big house, but I'm gonna sell it to an even greater fool.

[percussive music] ♪ ♪ There were people who thought 50 or 100 years ago that home prices should decline with time.

And the reason is-- they wear out.

[thunder booming] ♪ ♪ Don't expect it to gain value, but expect it to lose value.

That was a common view in the past.

- For so long, we have come as a society to place a tremendous amount of value on the home itself.

And the bigger the home, the better.

- It's interesting because Levittown and the houses were meant to evolve and change as families evolved and changed over time.

- The idea was that this home would be livable all your life.

You could have one bedroom or three bedrooms depending on what your needs were at the time.

And this area was--could be an extension of the living room or it could be closed off and become a bedroom.

And so you close it here.

- You wanna go outside so you can talk?

- Yeah, yeah.

You'd close it here, and then you would enter from the hallway.

- So I'm coming out from the bedroom hallway now where all the entrances are to the bedrooms.

So it could either be one bedroom or three bedroom.

Right now, we create the one bedroom here, and in the rear, there's one bedroom that could be partitioned with a rolling wall so it would become two bedrooms.

- That was an extension of the dynamic coming out of postwar idea of what the house provided.

It wasn't really about the upscaling or the supersizing of the house.

And so that relationship between the growth of the physical house was still somehow in balance.

Subsequently, people began to make the scale shift where the houses became just large.

- I'm in love with this indoor tree.

- Hope it ain't a ficus.

I don't think it is.

♪ ♪ - So this is where your dining room would be.

That's a lot of alcohol.

♪ ♪ - This is a maze.

5,000 square feet.

Only one staircase?

It kind of feels like the back staircase or something.

- I feel like it's very tract home-ish.

♪ ♪ - So the attached office, casita, set up.

It's really more suited for Grandma.

She doesn't really wanna have a detached unit.

I don't think Grandma needs 12-foot ceilings, though.

McMansions.

They're going the way of the dodo bird.

People wanna buy what they need and they don't want any extra.

And this has so much square footage and wasted space, they might get away with one more sale, but in the years to come, it's gonna be tougher and tougher.

- Connor, was that fun?

- Yeah.

- There's this tremendous economic dependence on this idea that we can keep building new single-family homes on their own lots and that they have to keep marching across the U.S. landscape because it's a huge part of what the economy depends on for its health and well-being.

- Dolce, come here.

Yeah, so our property line is just basically the white picket fence all the way around.

All the way back up to there.

So we're gonna have our garden over here and a chicken coop over there.

Gigi's a grand champion.

Not so much Dolce.

So this whole industry of easy, quick money for property did not end at the retail borrower.

You know, developers were exposed to these funds.

So these companies were going in and buying up swaths of land from these farmers at ridiculous prices.

Just giving them enough money for their great-grandchildren to retire on.

And it was just so hard to say no.

[dramatic music] And that's where you see all of these citrus farms in the Inland Empire gone.

♪ ♪ And of course, the cities were loving it because the tax basis on real property with a house on it is far higher than farmland.

These cities were seeing their tax base quintuple literally overnight.

And, you know, then the developments stopped.

[upbeat music] ♪ ♪ - The United States economy has never been in better shape.

- We have created the highest standard of living for a country of our size.

- ♪ I never knew ♪ ♪ How to say no to you ♪ - It's a terrific time to buy.

- We've never had a decline in house prices on a nationwide basis.

- Homes may see an ebb and flow in the price, but you're not going to see the collapse that you see when people talk about a bubble.

- If there is a bubble burst, as they call it, I sort of hope that happens because then people like me would go in and buy.

- A new warning that the housing bubble is about to burst.

- ♪ How to say no ♪ - It's popping!

♪ ♪ - Our entire economy is in danger.

- And that means life as most Americans know it is about to change.

- 14 million people took a mortgage in the last three years.

They will lose their homes.

This is crazy.

- That rate is actually higher among people of color.

- San Bernardino recently became the third California city to file for bankruptcy.

- And unlike a homeowner, who can walk away from a mortgage that's more than the house is worth, a municipality cannot.

♪ ♪ - ♪ Never knew how to say no ♪ - If you come back to this property, it's considered trespassing.

- Did you ever think that this word could become 50% of your business?

- No, never would have imagined it.

- ♪ How to say no ♪ ♪ Say yes ♪ - Yes, I found a flaw in the model that defines how the world works.

- Your ideology was not right.

- Precisely.

- ♪ How to say no ♪ ♪ Say yes, yes ♪ ♪ ♪ - Jar opener.

Everyone needs one of those.

Yeah, it's not in here.

That's 10x17 for the living room.

That was 18 counting the counter.

If you count this 2 feet here.

- I've only been doing real estate with him since Natalie was two, so that's 16 years.

After the "LA Times" article and the "Nightline" piece, all that, I remember us being just completely crazy busy.

I mean, as great as it was, it was such a blur.

- It was a blur?

- Yeah, a complete blur.

You think when I said blur, you think that I don't know all those details?

I'm just saying blur meaning it was a blur time of my life.

- Well, let me add some color, then, because I remember every detail.

- I'm sure you do.

- The blog was running.

- I don't wanna talk about those details.

- Because of our connection to Countrywide, they started--at least-- they had us apply to be one of the agents.

That's what happened.

- You should watch yourself do this.

- December 2006, this house sold for $1 million.

1,900 square feet.

Right across the street from the freeway, $1 million.

That's what we call a retro water heater.

A vintage.

Oh, lovely.

If you are watching this video and you're a Realtor and you're jumping off the couch saying, "Wait a minute.

I represented the buyer when they paid a million," I want you to put your mai tai down and go grab your shingle and send it into the DRE right now.

You don't deserve to be licensed.

December 2006, this sold for a million dollars.

Everyone who was on that deal deserves to get fired.

I'm Jim the Realtor.

There's a lot of trust in the marketplace on value.

Could this be just a value bubble where people just keep paying these crazy prices a lot more than they used to just literally a year ago just because they wanna get a house?

There really isn't the evidence to help support them that I can say, "Oh, for sure it's worth it."

There's really, I think, some valid concern about valuations when the proof is so thin.

It's always been a problem in this industry.

There is really just that one way to determine what something is worth is look what other people have paid.

What if the other people were crazy?

♪ ♪ They were hoping to get $2 million for these up here.

And you can see they built, I think, a handful of them and gave up And those are 5,000- and 6,000-square-foot houses.

♪ ♪ Everyone was going by the mantra, "Get in or you might get priced out forever."

Because up to that point, no one had seen any previous downturn.

It just wasn't in the vocabulary, and nobody, including Realtors, ever really thought, "Hey, the party's never gonna end."

♪ ♪ - I mean, the thing about this is, this is the kind of crap I used to build.

I was the engineer who would design and lay out and build this stuff.

I would work on these big development projects.

Cities would come to us: "We want this done."

We'd go out and build it, and I sincerely believed that the work I was doing was building a great America.

But then I started to ask some questions about what comes next.

After we build something, how do we take care of it?

What's the cash flow that makes this all work?

I started to look at developments that I had worked on and run some larger math problems.

For example, a developer would come in and build the road.

The developer paid all the costs to build it.

People have been paying their taxes, and the idea was, they pay their taxes and then the government would fix this road.

The cost was $354,000 to fix that road.

We asked the question, okay, based on the taxes the city's collecting from these people, how long is it gonna take them to recoup the money they just spent?

The answer is 79 years.

As an engineer, I knew that road wasn't gonna last 20, 25 years.

This doesn't make any sense.

The growth creates what we call the illusion of wealth.

If you lose money on every transaction, you don't make it up in volume.

Where are we at today?

We're, like, way out here.

You can look at the runup to the housing crash as a prime example.

Everybody felt like, "Well, we're doing okay "because, you know, yeah, "I made $12,000 in housing payments, "but my house went up by $40,000.

I cashed out the difference.

I'm doing fine."

You're essentially skirting around the core problem, which is that the underlying economy does not work.

In 2000, we had 1,100 census tracts in this country that you can classify as persistent poverty.

In 2010, it went from 1,100 census tracts to 3,300 census tracts.

Three times the American geography is now in persistent poverty.

Our places don't work.

They're just designed to decline.

If you don't know what was lost, you don't look at the place and see, like, this is decline.

Well, I'm 43.

If you're 10 years, 20 years, 30 older than me, all you see is wounds.

And so it's really hard for you to get your mind out of that and actually see how this could be a better place.

Now we have an Olive Garden, so we've made it, right?

- I don't know, man, the Midwest is heartbreaking.

- The Midwest is heartbreaking.

Like, of all the places, this is, like, one of the last ones I'd live in.

But it's home and I--you know, there's a part of me that loves it too.

Like, I look at it and I'm like, "I wanna help this place.

I wanna make it better."

- Yeah, sure.

I'm moving the little Google street view guy... - Yeah, yeah.

- Down South 6th Street.

- Yeah, that was our-- - Holy [...], man.

- That's our Champs-Elysées, man.

That's our--that's our Main Street.

- It's one muffler shop after another.

- Yeah, I know.

I'm educated enough to know that I shouldn't talk about some race things because I'm--I realize how ignorant I am.

I mean, I grew up in a city that is 99% white and prob--still is very close to that.

But when you start to get a mixing of people in the community, like, the others start to move in, whether the other is someone of a different race or someone of a different social class.

I think psychologists would say there's a natural human tendency to, like, circle the wagons.

And what zoning did is, it gave, like, this really wonderful tool to be able to write in a more camouflaged kind of racist way, "We don't want those people here."

I think the irony today is that it's also now trapped poor white people.

- The mechanic says you owe $250 for new brake lines.

[bell chimes] Doug.

- What is you better go to that dude in my neighborhood who will fix anything for $40?

- What--you know Cecil?

- Yeah.

But my Cecil's name is Jimmy.

And he fixed my refrigerator, my air conditioner, and my cat.

- Yeah.

Yeah, everybody's got a guy.

Ooh, you all right, Doug.

[laughter] - You know, Kareem Abdul Jabbar said the hyper problem we have today is less race than it is poverty.

And I think he was exactly right.

I mean, there's a racial element to it, but middle-class whites will sacrifice poor whites too.

There's no racial loyalty there.

They're gonna kick 'em to the curb.

I've been able to travel around the country and experience different communities.

It's the same-- it's the same thing.

So you see across the rust belt and you see across rural America people struggling, and those struggles are kind of shared struggles with people in urban areas that have long been left behind.

When you find that you can no longer get the mortgage, when you can no longer cash out the equity, When you can no longer get the car loan for the new car, your world changes, and your experience changes, and America becomes, like, a really cruel place.

We're starting to see more and more that is a mainstream experience.

- How are you going to get your message to anybody when even the commissions aren't here and nobody else from the council comes to meetings?

How do you--how are you gonna get to people?

- You can create a social contract and make tons of promises.

We now live in the day when those promises are coming due.

And it's not a left or a right thing.

It kind of transcends left and right 'cause neither side understands that.

They both want to go back to what they thought worked.

It didn't work.

- Baltimore is very similar to many cities in terms of the way that it's been wrecked by post-industrialization.

Between 1950 and 2000, Baltimore lost 100,000 manufacturing jobs.

So that's had a negative effect on people feeling like they have control over the necessities of their lives.

[applause] - When we elected them, they can running around in Mercedes Benz, they can run around in gangs and everything else.

We're paying for it!

And what the hell is the guys on the streets doing?

Nothing!

They're sitting on the corners.

They can't work.

They got no work.

It doesn't mean anything at all.

And we're not gonna be foolin' against each other anymore.

We're gonna fight with each other no matter Hispanic or colored, white, anything.

We're gonna be a rainbow.

Not only in this community.

We're gonna get 'em all together and fight!

[buzzing] - We will build it.

- Together.

- Port Covington.

- And when we build it... - It will be ours.

- Port Covington, a bold vision for Baltimore.

At the heart of it, a new world headquarters for Under Armour.

An opportunity for all of Baltimore.

This will be big.

Baltimore big.

- Tonight, the Baltimore City Council put the stamp of approval on the $660 million for the Port Covington project.

The developer guaranteed the city affordable housing, jobs in exchange for the investment.

- Our intent is to have a mixed income diverse community.

- Their definition of affordable housing is affordable to families who are making about $70,000 per year.

So we're saying is you just can't build a community with people who are wealthy.

- This sort of, you know, snarkiness is not helpful to the discussion.

- Boo!

- It doesn't follow logic, - But if only a select few individuals get to move into those neighborhoods, is it still inequality?

- No.

- All in favor?

all: Aye.

- Any opposed?

[silence] - Remember, we are creating structural disadvantage in our African American communities, but we're creating structural advantage in our white communities.

And that's where we are today.

- It wasn't until I got older and started understanding politics a little bit more and at the same time I started getting real big into Black history and about the things that America had done to us.

- A gunshot and stab that makes the evening news, that's spectacular violence.

We readily recognize that as violence, right?

But we don't recognize redlining as slow violence.

We don't recognize putting people in environments where they don't have opportunity as slow violence.

But that's what's going on in Baltimore city.

I was sitting here at my desk watching the police and the children interact on the day of April 27, 2015.

And the children were throwing rocks.

The police throwing rocks back at the children.

And eventually the police, you know, they're shooting rubber bullets and they deployed tear gas.

And at the moment that they deployed that tear gas, I'm sitting here and I'm like-- I feel, like, this weight come right on my chest.

And I'm like, "I can't breathe."

I couldn't watch them anymore because I knew it was causing some sort of physiological reaction in my body.

It really was a powerful, pivotal turning point because everybody went into overdrive after that.

Everybody went into throwing themselves into activism and nonprofit work and volunteerism.

So this is what you're gonna talk about here.

So you're gonna talk about what is home and your neighborhood mean to you.

Exercise is set up for you to be with the person that you would least likely be with in the room.

Partner up and really sit with your partner, folks.

Don't sit side by side like this.

Sit in front of your partner.

- How you doing, Miss Gail?

- Hi, Greg.

- I'm originally from Greenmount, the Greenmount area.

To me, that small section of the neighborhood is everything because there's a certain level of pain you gotta go through to be really from Baltimore.

And when you're really from a neighborhood that has a reputation, you get what's known as a stat.

I have my literal stat, you know.

Zone 18 stands for the last two digits of your area code.

So it's really big, you know, to be connected to a neighborhood.

What people outside the street don't understand, all of this stuff is about legacy.

We don't really know where we come from.

We don't know our families.

So when you decide that you're a street dude and you put your all into being a street dude, it's really the only industry that we run or we think we run.

You get what I'm saying?

So from there, your kids grow up under-- up under your name.

What is your name?

What kinda name you wanna leave for your children?

You get what I'm saying?

That's the name my father left for me.

I could go anywhere I want to in East Baltimore and not have a problem because of who my father was.

But because I'm not a street dude but I still carry those morals, I gotta leave my son something.

I'ma buy a block in the city.

and it's gonna be a-- it's gonna be a new block.

I'm trying to tell you.

I'm gonna help a lotta people just by giving them places to stay and doing what I know how to do, use these hands.

I know too much about real estate to not get them into these homes.

That's gonna be my legacy.

That's gonna be my legacy.

- It wasn't until the early '70s when they started putting money into the harbor and said it will filter back into the neighborhoods, which it did not.

I have seen so much of Baltimore and it hasn't changed from when I was younger to now.

Telling us our neighborhoods are bad and it's dangerous and if we as African Americans feed into it and then we move out and then other people move in.

Then all of a sudden the neighborhood's good again.

- People who've been here and have been mentally beaten up their entire life, there's so much you got to be mad at.

That feeling of hopelessness in me kinda manifested itself into hate.

So when you get the opportunity to display your anger and it's been pent up forever, it just--it goes way beyond anybody could think.

♪ ♪ [crowd shouting] [glass shattering] [people screaming] ♪ ♪ - Hey, guys, they just set the CVS on fire.

They just set the CVS on fire.

♪ ♪ - What you're getting an example of is what's really inside of everybody.

Atrocities that build up and build up.

- How far is this gonna go?

- As far as they take us.

As far as they take us.

- What does that mean?

- Did you saw that--see that?

Oh, my God.

If just saw that, they just-- while we were talking there, just cut the hose.

- Yeah, I just saw that guy cut the hose.

- Trying to thwart the efforts of the authorities to actually turn out this fire.

- So I'm gonna stop it right here.

I just wanted you to see this piece first, but I wanna do something else in here too.

You saw that young man was poking the water hose with the pocketknife?

Well, I want you to know that's him right there.

Right there.

- At 21, with no priors, I spent two years fighting 25, and people was trying to get me more time than I had been on Earth.

It was scary, but it was eerily familiar because it felt like no matter what I accomplished in my life, being the first person to go to college, graduating high school, I felt like I was supposed to be there.

It's kinda hard for you to... take this stuff that we see here and translate it into the humanity of it as a person.

A million.

I got a million dollars in restitution.

A hundred dollars a month.

That's 10,000 months.

Anybody know anybody here that lived 10,000 months?

Can't leave the city until my restitution paid.

- Whoa, I didn't know that.

- Yeah.

Can't--you're not allowed to leave the city until the--until the restitution's paid.

These are the struggles that don't make the news.

These are the differences that make people like myself turn off from everybody, hate yourself, you know what I mean?

Because everybody else hates you.

♪ ♪ - When people make the claim of, you know, why would people burn down their own neighborhood?

I think it's sort of a glib statement to sort of gloss over the fact that many of these neighborhoods don't have an investment to begin with.

I mean, why would they burn down their own community?

I mean, it really isn't a community that they've been able to have ownership in.

"Don't push me because I'm close to the edge."

The Black community's been pushed to the edge and I think that is sort of why we see some of the uprising we see now.

[crowd chanting] Black Lives Matter!

Black Lives Matter!

- People may begin to understand that Black lives matter, but Black lives don't matter if Black neighborhoods don't matter.

♪ ♪ - I came back here subsequently when I was a police officer and it was all bricked up, all the windows, the doors.

It's choice property now.

The area is gentrified.

You know, gentrification, I suppose, on one hand is a good thing 'cause it cleans up the neighborhood.

It makes it nice.

But my heart goes out to the people who once lived here who got moved out because where'd those poor people go?

You know, they were forced out of their neighborhood.

Their homes are gone.

- If we as a country don't pay attention to the places where people live, the homes that people have, then we'll continue to go in circles and not really get to the root of the problem.

♪ ♪ - When you look at a rain forest, you're seeing a very complex ecosystem.

Not only do you have these massive trees, but you have all the understory, all the animals, every leaf has its own individual ecosystem.

And when you add up all that, you have this massive, massive complexity.

You compare that to, say, a cornfield.

You have one species of plant.

A complete monoculture.

And what you see is a very efficient undertaking, I mean, you can produce a lot of corn in a very small space.

But you certainly don't have the complexity and the ability to thrive that a rain forest does.

So what we did is we switched cities from being complex systems to cornfields.

♪ ♪ You look back in history, though and the way humans evolved along with the city, and what you see is that messiness, that friction, that rubbing up against other people is an essential component of it.

And there was a certain discomfort that went along with that.

But there was also a social dimension to it that we've just completely lost.

This pattern of development has allowed us to be intentionally ignorant of the pain and the hurt and the needs that go along in all our places.

♪ ♪ ♪ ♪ - ♪ My house was shoved on the corner ♪ ♪ On a gravel road on Edmund Street ♪ ♪ For years, you messed in your garden ♪ ♪ Never wanted help from me ♪ ♪ You never say I'm the one ♪ ♪ Way-oh, ey-oh ♪ ♪ ♪ ♪ You never say I'm the one ♪ ♪ Way-oh, ey-oh ♪ ♪ ♪ ♪ You never say I'm the one ♪ ♪ Way-oh, ey-oh ♪ ♪ ♪ ♪♪