tonight, locked out of the american dream. >> my bankers always have to go to the underwriters and fight for me. why do you have to fight for me when i'm meeting all the criteria that you told me i needed? >> an abc news investigation revealing gaping racial disparities in housing. >> we have never as a nation gone all-in on fair housing. >> inside the most segregated big city in america. >> you can't just fix this. generations of white families have been enriched by these maps. >> plus the community built against all odds. >> they are trying to steal what we have already established. they are trying to steal our community. >> now fighting to survive. this special edition of

"nightline," "housing divide," will be right back. this winter, comcast business is helping team usa and businesses across america stay ahead. keep yours ahead too with reliable connectivity and secure solutions on the network that can deliver gig speeds to the most businesses.

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his growing family. he spent years preparing for this moment. having a well-paid union job. purchasing a starter home. now he wants to trade up to the american dream and leave something behind for his son charles to inherit. >> generational wealth. being able to have a home as an asset and pass it down. >> reporter: exsy grew up in milwaukee. while he's seen the city change, he's also seen some things stubbornly stay the same. >> if you look at the north side of milwaukee, you're going to see african american. as soon as you cross to the south side, that's where the latino community begins. >> reporter: december spice its overall diversity, milwaukee is the most segregated big city in america. according to data analyzed by abc news. >> we're getting watoessa. >> reporter: today exsy in the pricier subbear of wauwatosa.

>> is this the neighborhood you dream of living in? >> definitely, definitely. everybody manicures their yards. i have a 2 1/2-year-old son i would love to ride his bike up and down the street without having to worry about something bad happening to him. >> reporter: exsy sees no future for his family in milwaukee's virtually all-white suburbs. he says generations of past legal segregation and present lending standards have conspired to lock out buyers like him. the numbers show it. over 90% of black people in the milwaukee area live in the city. whether you're white or not still appears to make a difference in your ability to get a traditional mortgage. even if you've done all the right things. >> i still feel like my bankers always have to go to the underwriters and fight for me. why do you have to fight for me when i'm meeting all the criteria that you told me i needed? >> reporter: here in milwaukee's majority white neighborhoods, our data show that white people have a loan approval rate 1.5

times higher than people of color with the same income range applying for similar loan amounts. and it's not just milwaukee. abc news partnered with our own stations to investigate mortgage lending data and found gaping racial disparities. >> how many times did you try to apply? >> at least three times. >> you were denied? >> denied each time. >> reporter: more than 50 years after the fair housing act, cities from new york to new orleans to chicago are still extremely segregated. the neighborhood you live in can impact everything from schooling to health care to future job opportunities. tonight we go inside the issue, from talking to those locked out of their dream homes to those feeling pushed out of the neighborhood they built against all odds. and tough questions for those tasked with overseeing the federal agency responsible for keeping housing fair. >> we have never as a nation

gone all-in on fair housing. >> growing up, did you know anyone who lived in the suburbs? >> growing up, i did not. if you don't know someone there, you don't go in that neighborhood because you're not supposed to be over there. >> that's just known? >> that's just known. >> reporter: not just known. it was actually codified. in these restrictive housing covenants that became popular starting in the 1920s. >> one that really stands out, read it. >> at no time shallot of any building thereon be purchased, owned, leased, occupied, or used by any person other than a citizen of the united states of the white race. >> reporter: historian and writer reggie jackson's work focuses on segregation in milwaukee. >> so this sign from wauwatosa was all over the city. people were living in coveted neighborhoods, knew this meant

all-white community. >> reporter: the racist practice of redlining was also pervasive, enforced by federal government standards largely based on neighborhood demographics. within redline neighborhoods, banks seldom approved loans or charged predatory rates when they did. >> d-5 on the map, 9,000 black people live inside that box. it said, this is the negro slum area. >> this is the work of the federal government? >> federal government. the homeowners loan corporation. and the greatest benefit of these maps was white people. ♪ over there over there ♪ >> reporter: during the post world war ii housing boom that gave rise to america's suburbs, million is of white veterans secured home loans with the help of the g.i. bill. but for black veterans, the discriminatory way the bill was implemented often prevented them from accessing those same loans, shutting them out from being able to build generational wealth. the fair housing act's passage

in 1968 outlawed racial covenants, redlining, and racist lending practices. but their legacy still lingers. >> they were intentionally creating a two-tier system of home ownership, a two-tier system of wealth-building. you can't just fix this. generations of white families have been enriched. most american wealth is in home ownership. >> reporter: the typical white family has eight times the wealth of the typical black family. this often puts black people at a disadvantage from the start when applying for a loan. an analysis done shows formerly redline zones are disproportionately neighborhoods are color. the vast majority of them still segregated. >> i don't think there is another suburb in the inner-city anywhere in america -- >> like halyard park, no, i

doubt it seriously. we are a real close-knit community. starting back in 1977. >> reporter: halyard park, a neighborhood that rises out of the inner-city like an oasis. planned, financed, constructed by black milwaukeens who decided that if they were going to be locked out of the suburban life, they would simply create one themselves. lady mosley first moved to the area with her husband in 1981. when it started to take shape, what was that like for you? >> it was beautiful. people were buying. they started putting in sod. the houses were going up. we were all excited. it felt good. to be here and be a part of something. >> you stayed? >> i stayed. >> for 40 years now. >> 40 years, and i'm not going anywhere. >> reporter: halyard park was born from mortgages mostly funded by a black-owned bank, columbia savings and loan. recently downtown development has made the neighborhood

attractive, sending property values and taxes soaring. nearby is the fiserv forum where hockey is played. >> black people built this neighborhood. are you concerned they could be priced out of it, pushed out of it soon? >> absolutely. it could happen. anything can happen, david. it would be gone in no time. it would be gone. >> it's going to be a disaster for everybody. >> reporter: clara smith has lived in halyard park for 38 years. she's feeling the pinch. >> i have seen my taxes go from $1,500 to over $4,000. i do not want to be taxed out of my home. >> the economists would say that all that development downtown, that increases the value of your property, which is good for you. do you buy that? >> no. because they're trying to steal what we have already established. they're trying to steal our

community. >> is there a number that someone could offer you for your home or your property that you would have to consider? >> don't do that to me, brother, brother scott. >> real talk? >> yeah, it's real talk. but -- wow. wow. >> it's hard, huh? >> it's hard. >> gentrification is like a slow-moving freight train. you see it coming, but you're not going to do anything to stop it from moving. >> reporter: meet lenny's next-door neighbors, chris and avery nielsen. >> look at this ray of sunshine right here. >> reporter: the nielsens have been living in halyard park for four years. they say they chose the neighborhood because they value diversity. >> halyard park may become whiter and whiter. do you think about that? >> hm. it's a fantastic question.

honestly, i don't know that i've given the future much thought. just being in the present is kind of what's filled our time. we just wanted to find a spot that fit in our budget, that we could raise a family in a diverse area. but to your point, looking to the future, i think it is a concern. and something that we need to be aware of and help keep a diverse atmosphere. >> there's a difference between integration and gentrification that pushes people out. does that ring true to you? >> yeah. i think that's very fair. if we know that there is a risk coming, how can we prevent it? >> i think we should restore the history that's here and keep it alive. it's good for strong communities and good, strong, diverse communities. >> reporter: just a few blocks from halyard park, exsy's home search continues. >> it looks like a gut rehab situation. definitely is. , and it - >> reporter: he knows the suburbs are not an option.

now imagines rebuilding this foreclosed inner-city property, walling it off with an eight-foot fence to create his own little sanctuary. >> i can make my own, customize it for my family, create a safe zone for my child. >> reporter: exsy currently owns this home in a predominantly black neighborhood that was once redlined. >> the plan was that this was a transitional home. >> because of where your home is, how did it go with appreciation? >> you know, i went from my house being worth about $110,000, to them telling me my house is worth $25,000, because of the location i lived in. >> reporter: it's another hurdle for exsy to overcome. he feels stuck. he applied and was approved for an adjustable rate mortgage, but he says it's not enough to cover the gut rehab. so he's going to reapply. >> i'm jumping through multiple hoops just to stay somewhere where i really don't want to

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this special edition of "nightline"," housing divide," continues. here again, david scott. >> we are asking for nothing more than what we deserve as citizens. and that is an opportunity to move freely in our society. to buy or to rent or to lease property that any other american can have. >> reporter: in milwaukee, the

most segregated big city in america according to an abc news investigation, the fight for fair housing runs deep. for generations, people have picketed, protested, and battled to break through the color line. >> you got the streets, we got the feet. we going to use them. >> we started in 1967 to have this massive group of marchers from the north side to the south side, for 200 consecutive days. they were met by an angry of crowd of thousands of whites throwing bricks, bottles, rocks, bags of human feces, bags of urine. really trying to scare these people. they persisted. >> reporter: it had national impact. >> fair housing for all is now a part of the american way of life. >> reporter: but 53 years later, the inequities in housing linger not just in milwaukee, but across the country. nationwide, only about 35% of black applicants are approved

for a mortgage. compared to nearly 56% of white applicants in the same income range, applying for similar loan amounts. the gap between black and white home ownership is still as wide as it was when the fair housing act passed in 1968. >> the federal fair housing act of 1968 said, we're going to fight housing discrimination on a national level using the department of justice. they've never done it. >> reporter: hud, the department of housing and urban development, was created to enforce federal laws like the fair housing act. enforcement can include the department of justice in some instances. has the federal fair housing act simply failed america? >> it's failed america because it's never been enforced. you don't find any other real attempt, regardless of who the president is, regardless of which administration you have in office that has literally said, we're going to really, really work on this. >> it's a commentary on our ourr

society that we simply haven't dealt with these problems. the legacy of jim crow, the legacy of redlining, not even close. >> reporter: senator sherrod brown is part of the committee that oversees hud. >> we need congress to be engaged in investment and helping those people who have been victimized by red lining. redlining is illegal. there are other ways banks figure out a way around it in some cases. banks still underinvest in communities of color, underinvest in low-income areas, even when they can show they are as deserving of this loan as other people might be. >> reporter: hud denied an on-camera interview request. a spokesperson for the department says president biden acknowledges the federal government's role in past housing discrimination and added, making progress on equity in the housing sector will take more than just federal government action. state and local actors and the structural barriers built into the system by private entities also need to be addressed. do you accept that mortgage

lenders have a ethical and legal responsibility to correct this historic injustice? >> oh, yes. i wish i could, you know -- magic wand, make it go away. we're doing all we can do to help. >> reporter: linda mccoy is president of the national association of mortgage brokers which represents nearly 1 million brokers. i see that you're holding your next legislative and regulatory conference soon. looking through the conference schedule, i didn't see any sessions specifically devoted to corrective action against racial inequities in mortgage lending. is this not a priority? >> oh, we have speaking at our event fhfa. we're trying our best to do everything we can. >> that agency does a lot of different things. >> we haven't done our agenda yet.

>> okay, my point is if you say it's important to you, why wouldn't it be reflected in the conference schedule? >> it can be. like i said, we aren't done with our agenda yet. >> i see, i see. >> you want it? okay, we've got it on our agenda, how about that? >> reporter: back in milwaukee, exsy tatum iii dreams of being able to own the right home for his family. >> you want a neighborhood that you can see your child ride up and down the street on their big wheel or their bike. >> reporter: the search continues in a place around the corner from his own home, but somewhere he never knew about. he's come to halyard park that suburb within the city built by black homeowners and bankers. >> hello, miss mosley. >> how are you? >> i'm good, how are you? >> nice to see you again. >> this is the gentleman i told you about. >> lmosley, glad to meet you. >> nice to meet you. after seeing this neighborhood, i think there's always hope right in the center of that roug wants to live here,

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hey, guys. it's exie here from milwaukee, wisconsin. we visited this nice house before it looked like this behind me here. it is deemed unsalvageable and they're going to demolish it. so back to square one, we'll say. you keep moving forward, you keep pressing.