A recent article from The Hill (“Obama making bid to diversify wealthy neighborhoods“) is setting off waves of predictable outrage across social media and the right-wing blogosphere. The article concerns a Department of Housing and Urban Development (HUD) rule scheduled to be released soon that will use federal grant money as an incentive to get certain municipalities to allow affordable housing in their communities. The article quotes Rep. Paul Gosar (R-AZ) stating that the Obama administration “shouldn’t be holding hostage grant monies aimed at community improvement based on its unrealistic utopian ideas of what every community should resemble.” Anyone who has any knowledge of the federal government’s previous role in subsidizing predominantly white suburbs should find this line of reasoning to be particularly disingenuous. The fact is that if certain cities are really that resistant to changing their zoning regulations to allow for lower-income housing then why don’t they Go Galt and reject HUD grants altogether? I mean really, show us what that supposed economic self-sufficiency is all about.
Housing discrimination in the US has a long and sordid history, of course. The 1968 Fair Housing Act has been consistently sabotaged and under-enforced by both reactionaries like Nixon and liberals like Clinton. Upper-class whites still use intimidation, threats and violence to keep “undesirables” from living among them. One example of this can be found in the 95% white city of New Berlin, Wisconsin. Here’s how Courthouse News (27 June 2011) described it:
A Wisconsin city in the most segregated region in the nation buckled to racist pressure and shut down an affordable housing project, federal prosecutors say. New Berlin has no affordable housing for general occupancy or families – just for seniors – and truckled to fears that affordable housing would draw minorities to the city, which is 95 percent white, according to a Fair Housing complaint.
The city approved a 180-unit project, but “Immediately afterward, and over the next several weeks, city officials received numerous emails, calls, and other communications from residents of New Berlin, the large majority of whom voiced opposition to the … project. Some of the opposition was based in part on fear that the prospective tenants would be African American or minority. The Mayor, Aldermen, Plan Commissioners, and staff at DCD were aware that community opposition was based in part on race,” according to the complaint.
“The communications they received over several weeks contained express and implied racial terms that were derogatory and based on stereotypes of African American residents. These communications referenced ‘n****rs,’ ‘white flight,’ ‘crime,’ ‘drugs,’ ‘gangs,’ ‘families with 10 or 15 kids,’ of needing ‘to get a gun,’ of ‘slums,’ of not wanting New Berlin to turn into ‘Milwaukee,’ of moving to New Berlin ‘to get away from the poor people,’ of not wanting to provide housing to people ‘who work but do not live here.'”
New Berlin Mayor Jack Chiovatero initially supported the project, but was worn down by being called a “n****r lover,” having his property vandalized and a failed recall effort against him. The pressures upon Chiovatero were revealed in an email he sent to a friend, indicating that he condemned racism, but found himself surrounded by it.
According to the complaint, Chiovatero wrote: “I am a prisoner in my own home. I have spent several hours a day last week listening and replying to concerned citizens. … I was asked NOT to attend two functions this weekend for fear it would distract and cause havoc by my presence. Our City is filled with prejudice and bigoted people who with very few facts are making this project into something evil and degrading. … New Berlin is not ready, nor may never be, for a project like this. Unfortunately, I will be doing whatever is in my power to end this project, it will result in lawsuits and making New Berlin a community of bigots.”
It is worth noting that while lawsuits would be used in some of the most extreme cases, the tool of choice would still be a threat to deny cities HUD grants. One can’t help but wonder why so many of these reactionaries cheered on governors who turned down Medicaid funding but whine and moan about having local governments lose federal funds for their policy of keeping lower-income families and people of color out. Just kidding, it’s fairly obvious: Medicaid helps poor people while HUD subsidies to lily-white enclaves keep the American conservative dream alive.
Current Events Inquiry 
Perhaps you would be interested in the Strong Towns campaign, if you’re not already. This kind of dead-end suburbanization has been going on for years, as you say. It has the unintended (but not unwanted) consequence of trapping poor people in cities that have to spend a disproportionate amount of resources subsidizing them, as well as useless, failing ghetto suburbs that work for nobody, like Ferguson, MO. It’s not just HUD grants, either. They are dependent on highway subsidies for the interstate highway access they need to get to any kind of work, because they have no industry and it’s completely impossible to walk anywhere. The thing is, building affordable housing there is a mistake as well; there’s no transit and the “town has no business existing in the first place.