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THE label ``Rust Belt'' has taken on added, poignant meaning as racial segregation eats away at economic opportunity and social harmony in America's industrial heartland.

Eight cities across the lower half of the Great Lakes Basin have emerged as the most-segregated metropolitan areas in the United States. The cities are spread along the lakes in a tense belt of inequity between blacks and whites, a University of Michigan study shows.

While cities in the South and West progressed toward integration in the 1980s, the eight Great Lakes cities made little or no such gains, according to the study of 232 US cities recently published in the American Sociological Review.

Indeed, despite government and private efforts to remove obstacles to integration throughout the 1980s, the band of metropolitan areas from Buffalo, N.Y., to Milwaukee, have become what could be called America's ``apartheid belt.''

Residential segregation has long been the foundation for racial inequality, exacting a high cost in lost opportunity, racial strife, and human suffering, according to experts in race relations.

``Residential segregation is the bedrock for all forms of segregation, period,'' says Connie Mack-Ward, executive director of the Northwest Indiana Open Housing Center in Gary, Ind.

Barriers to integration hinder millions of black residents along the Great Lakes from rising out of poverty and enjoying a home, education, and lifestyle commensurate with their skill and toil, say experts in segregation.

Education thwarted

For instance, racist housing practices have thwarted efforts by Harold Fox to ensure a college education and prosperous future for his three children. (His name has been changed to protect his identity).

Mr. Fox, a federal employee and resident of the Gary suburb of Merrillville, Ind., offered a mortgage company in December 1992 a fat downpayment and a sterling credit record for the purchase of a small apartment building as an investment property for his youngest child.

The lender obtained a flagrantly unfair appraisal of the building, Mr. Fox says, and strung him along for about six months, effectively denying him the $28,000 loan.

Fox went to a second lender, which secured an appraisal $20,000 higher than the previous one and offered him a loan. Just before Fox completed the purchase, however, he was severely disabled in an auto accident.

Unable to work after the accident, Fox had to abort his planned purchase. Fox says that, had the first lender supported his purchase, he would have been able to count on rental income from the property during his disability.

The case illustrates how racism in housing harms black families over several generations by hindering their efforts to build equity in housing, the largest trove of wealth for middle-class Americans.

The eight Great Lakes cities remain divided by skin color because they hold to several ossified practices that reinforce racism, according to the study by two sociologists based on census data.

The densely packed, comparatively old cities depend for housing primarily on closed, long-established neighborhoods. They tend not to build dwellings in new areas open to all races.

Moreover, the cities have relied for decades on the manufacture of steel, autos, and other durable goods, an economic sector badly undermined by recession and foreign competition in the past several years. Many of the cities have been sharply segregated since attracting black laborers to their factories early this century.

Finally, comparatively old and autonomous local govenments in the eight metropolitan areas have successfully resisted county, state, and federal efforts to encourage integration.

The forces separating blacks and whites are especially glaring in Lake and Porter Counties of northwest Indiana, otherwise known as the Gary metropolitan area. The region is the most-segregated metropolitan area in America and the only region among the nation's 15 most-segregated areas where black-white divisions in housing grew during the 1980s, according to the study.

``Gary epitomizes all of the factors that exacerbate segregation and keep segregation at a very high level,'' says Reynolds Farley, a co-author of the study.

Gary Mayor Thomas Barnes denies that racial segregation is a problem for the city and its suburbs. The issue is ``really very irrelevant to the city of Gary,'' he says.

``It is not an area that has represented a problem in terms of our day-to-day activity,'' Mr. Barnes says. Like more than 85 percent of Gary's population, he is black.

But advocates for just housing practices disagree. ``Clearly this area has emerged again, and again, and again over the last three or four decades as the most intensely, residentially segregated area in the country,'' says Ms. Mack-Ward at the housing center.

Since 1989, the annual number of segregation cases brought to the federally and privately funded housing center has jumped tenfold, she says.

``We are just run off of our feet with complaints,'' according to Ms. Mack-Ward.

Northwest Indiana has been rife with racism since the Ku Klux Klan became a major force in state politics early this century. Although the Klan's political influence has greatly ebbed, there have been in recent years several cases of cross burnings, arson, and the spray-painting of racist epithets on the properties of blacks and Hispanics in northwest Indiana.

Bias in housing

Racists thwart black renters and home buyers with a myriad of subtle ploys, experts say. Many landlords go to great lengths to avoid even remote contact with would-be renters they suspect are black. Appraisers give lenders a handy excuse to deny a loan by filing negative reports on a property, Mack-Lord says. Moreover, lenders often string along black mortgage applicants for months on end until the prospective borrowers withdraw their applications, says Solomon Dye, president of the Gary branch of the National Association for the Advancement of Colored People (NAACP).

Finally, real-estate agents frequently engage in ``blockbusting,'' warning white residents that they should sell their homes after a black resident has moved into the neighborhood, says the Rev. Mr. Dye of the NAACP.