The turmoil of the early 20th century, namely WWI, the Great Depression, and, later WWII, culminated in the forging of a stronger federal government. Under Roosevelt in particular massive projects were pushed through. By the 1950s a burgeoning white middle class was enjoying a strong economy and more options than their parents could have dreamed of. Black folks, not so much.
In the 1930s a federal agency, the Home Owners’ Loan Corporation (HOLC), founded the practice of redlining. Employees of the HOLC went to more than 230 American cities giving majority-black neighborhoods the lowest rating of D, out of a scale of A to D, while homogeneous white neighborhoods were given A ratings. A rating of D marked a neighborhood as “hazardous” to lending institutions predicting that these neighborhoods would flounder and die. This meant that people who lived in, or wanted to buy into, D rated (i.e. Black) neighborhoods were barred from accessing credit. Credit to buy homes and credit to fix the ones they had.
Further, the Federal Housing Administration (FHA) insured mortgages primarily for white suburbia. It selectively granted loans only to white buyers or people building for white clients and insisted that any property it insured be covered by a restrictive covenant forbidding the sale of the property to anyone other than whites. This created and concentrated white spaces. Meanwhile, the FHA refused to invest in Black communities or underwrite mortgages for Black people who attempted to move into white communities. After WWII the Veterans Administration operated its mortgage insurance programs under the colorblind GI Bill with the same level of racial bigotry.
The decision of the FHA and HOLC to ostracize Black neighborhoods would turn their predictions of plunging property values into destiny. Not only could Black Americans not get loans to buy or invest in homes in Black neighborhoods, neither could anyone else. This starved whole communities of credit. A recent study examined redlined neighborhoods and found cities rated by the HOLC are more prone to hyper-segregation. 74% of neighborhoods given a D rating 80 years ago are poor today and nearly 65% are still minority. Comparison of maps the HOLC created and maps of those same neighborhoods now shows an enduring blueprint of both economic and racial segregation. Thus implying that exclusionary practices persist in many U.S. cities despite redlining having been made illegal by the Fair Housing Act of 1968.
Redlining accounts for a 40 percent gap in home values by 1980 just between D and C rated neighborhoods. The difference in valuation between D and A neighborhoods is incalculable. Decades of depressed home values leaves these neighborhoods at higher risk of gentrification. Though gentrification is associated higher levels of interaction between black and white residents, it is also linked to greater economic inequality in cities. In short, the actions of the FHA and HOLC increased Black segregation, quashed Black homeownership, and depressed Black property values.
It didn’t have to be this way. If the HOLC had embraced the separate but equal doctrine of Plessy v. Ferguson (163 U.S. 537 1896), they wouldn’t have withheld loans from African Americans living in or wanting to buy into Black neighborhoods. Instead they would have supported Black people buying into Black neighborhoods; Black builders building Black suburbs. But, they didn’t.
Instead they not only barred white people from selling to Black people, from the builders to individual property owners, they barred all credit, which translates as to just about all investment, into Black neighborhoods. This left Black people, unable to get conventional loans, prey to unscrupulous financiers and segregated Black people not only into poverty, but into isolated poverty. Black or white people living in isolated poverty have increased experience of all sorts of trauma and are more likely to lack access to healthy food, healthcare, and economic opportunity. In these cities, hyper-segregated by the HOLC, Black people living in isolated poverty can live as many as twenty years less than white people. By developing and enforcing these policies the federal government didn’t just dedicate itself to racial segregation but to the active destruction of Black people and our communities.
“The trigger for white rage, inevitably, is black advancement. It is not the mere presence of black people that is the problem; rather, it is blackness with ambition, with drive, with purpose, with aspirations, and with demands for full and equal citizenship.”
White Rage: the Unspoken Truth of Our Racial Divide, Anderson
It didn’t stop there. In 1949 the feds turned to “urban redevelopment”. The program’s aim was to eliminate ‘slums’ and ‘blight.’ The result was that from the 1950s through the early 1960s the federal government subsidized the local destruction of nearly 400,000 mostly black-occupied homes. Despite pledges of relocation assistance and replacement housing this prime downtown real estate was instead repurposed for commercial, industrial facilities, institutional uses, and, ironically enough, luxury housing. People witnessed the destruction of their neighborhoods and had their housing destroyed, with most ending up in segregated public housing conditions much worse than those that had been destroyed by our federal government. It’s no wonder writer James Baldwin referred to it as “Negro removal.”
At the same time, city planners across the country were working to help white citizens access postwar prosperity. The interstate highway program was the largest public works project in history at that time. Without the interstate the white suburbs would have been, at best, highly impractical. However, merely supporting the white flight it orchestrated was not enough for the powers that be.
The interstates themselves were used to block in and isolate Black communities. Cities had long isolated and confined their Black and minority populations. Bereft of opportunity and mobility these neighborhoods became areas of concentrated poverty. With federally funded highway dollars city after city made the choice to plow elevated highways through these already marginalized communities, effectively destroying them. When Black and minority residences were displaced to other parts of the city whites, taught to fear Black people, abandoned those areas. The suburbs grew, breaking off from cities and denying those cities tax revenue while still partaking of their services. Which is how we ended up with sprawling, expensive to maintain suburbs and rotting city centers.
Unofficial redlining and mortgage discrimination against our minority, mostly African American and Latino, citizens continues into the modern era. A Pulitzer Prize-winning series of articles by investigative reporter Bill Dedman in Atlanta in the 1980s, showed that banks would rather lend to lower-income whites than to middle-income or upper-income African Americans and other Black people. The housing crisis of 2008 revealed that predatory lenders targeted Black neighborhoods for their most usurious subprime mortgages, according to this Princeton study. Among the many Wells Fargo scandals, the bank is accused of discriminating against Black and Latino home buyers, pushing them into more expensive mortgages than white borrowers. The resulting foreclosures reduced the Black home ownership rate to the level it was in 1968, at the dawn of the Fair Housing Act and after decades of government choreographed discrimination.
Through restrictive zoning based in class and anti-Black prejudice wealthy, mostly white, people still segregate themselves aided by complicit local governments. In America’s fourth largest city, Houston, Texas, a city venerated for its diversity, the city leaders as of 2015 have chosen to concentrate more than 71 percent of government-subsidized housing in only five of its 88 neighborhoods. None of these five neighborhoods is majority white. Other scandals just from 2015 include: Evans Bank settling with the NY Attorney General for $825,000 after it was discovered that the bank literally erased Black neighborhoods from maps used for mortgage lending. Hudson City Savings denial of mortgages to African Americans and Latinos between 2009 and 2013 leading to a settlement with the U.S. Justice Department for almost to $33 million. And redlining in Chicago and Milwaukee by Associated Bank which led to the announcement of a $200 million settlement with the U.S. Department of Housing and Urban Development.
Throughout the US these communities of concentrated poverty rate low on social mobility, are at increased risk of exposure to trauma, lead poisoning, and allergens. We continue to justify the way things are in the guise of giving the (white) people what they want. We put our heads in the sand and insist the segregation of our cities is a natural occurrence. We isolate communities in slum conditions and then denigrate the inhabitants for ruining their own neighborhoods. These actions mask opportunity-hoarding among affluent whites and segregate minority populations.
Home ownership is the single most powerful way in which Americans pass on generational wealth. Undervaluing and depressing the value of property also directly influences local tax bases, which in turn, is the way the education of our children is funded in most of the country. Countries with high-performing education systems focus on lifting up their most disadvantaged schools, channeling extra resources and sending their most experienced and talented teachers. The vast majority of American states, invested in the maintenance of white supremacy and racial segregation, do the exact opposite. Hyper-segregated cities as a whole are more likely to suffer economically and environmentally with lower quality public systems from air and water regulation to school systems. All of this is the direct result of a continuing history of intentional segregation.
Sources
https://www.npr.org/2017/05/03/526655831/a-forgotten-history-of-how-the-u-s-government-segregated-america
https://www.theatlantic.com/business/archive/2014/05/the-racist-housing-policy-that-made-your-neighborhood/371439/
https://www.latimes.com/archives/la-xpm-1991-02-17-fi-1797-story.html
https://www.citylab.com/equity/2015/09/redlining-is-alive-and-welland-evolving/407497/
https://www.theatlantic.com/magazine/archive/2014/06/the-case-for-reparations/361631/
https://www.theguardian.com/world/2019/jun/19/reparations-ta-nehisi-coates-cory-booker-congress-debate
https://www.pbs.org/newshour/show/struggle-for-black-and-latino-mortgage-applicants-suggests-modern-day-redlining
https://www.revealnews.org/blog/we-exposed-modern-day-redlining-in-61-cities-find-out-whats-happened-since/
http://www.ncpolicywatch.com/2018/08/22/new-report-details-racial-inequality-poverty-and-gentrification-in-durham/
https://psmag.com/economics/redlining-in-cleveland-is-still-happening
https://www.revealnews.org/blog/we-exposed-modern-day-redlining-in-61-cities-find-out-whats-happened-since/
https://www.pbs.org/newshour/show/struggle-for-black-and-latino-mortgage-applicants-suggests-modern-day-redlining
https://www.sciencedirect.com/topics/computer-science/slum-clearance
https://www.theatlantic.com/business/archive/2016/03/role-of-highways-in-american-poverty/474282/
https://www.fhwa.dot.gov/publications/publicroads/00septoct/urban.cfm
https://kinder.rice.edu/2018/04/19/within-houstons-diversity-complicated-story-still-being-told