THE OTHER AMERICA

SEGREGATION

During the last century, the residential segregation and isolation of most African Americans has been an almost permanent feature of housing patterns in the United States. No other ethnic group in America’s history has been isolated to a similar extent. Our nation’s highly segregated housing patterns did not occur by accident; they are a product of a complex web of decisions made since the beginning of the 20th century. Prior to the New Deal, direct governmental support for segregation "consisted primarily of the judicial enforcement of privately drawn restrictive covenants." Frequently included in property deeds, racially restrictive covenants controlled how property could be developed or used, or who could live on the property. By the 1920s, deeds in nearly every new housing development in the North prevented the use or ownership of homes by anyone other than "the Caucasian race." As a result, people of color were excluded from many communities, limiting where they could settle, beginning the trend toward increased segregation. During the 1920s, property values became tied to race "as a means to legitimize racial exclusion and protect racial boundaries." Beginning in the 1930s, the New Deal was created along with a number of government agencies.  These agencies affected housing patterns in the United States through discriminatory lending policies that resulted in the use of race to determine eligibility for housing credit. Consequently, whites received essentially all (98 percent) of the loans approved by the federal government between 1934 and 1968. By the 1960s, America segregation was prevalent and considered responsible for many of the obstacles faced by African Americans. In 1968, the Fair Housing Act was created to address this continued segregation and prohibit discrimination in housing based on race, color, religion, and national origin. The fight against housing segregation was deemed to be the first and most critical step towards creating a successful, racially diverse society. Forty years after the enactment of the Fair Housing Act, we still seek equality. While it is clear that the United States has made strides in its attempts to rid itself of discriminatory housing practices, there is still much to be done.

Douglas S. Massey & Nancy A. Denton, American Apartheid: Segregation and the Making of the Underclass 32-33 (1993) Arnold R. Hirsch, Making the Second Ghetto: Race and Housing in Chicago, 1940-1960, at 9-10 (1983) Testimony of Thomas Sugrue (Chicago) Testimony of George Lipsitz (Chicago) The future of Fair Housing report (2008), civilrights.org

NEW DEAL 1932

In response to the Great Depression, the US government implemented an economic program known as the New Deal. This had three aims: relief for the poor, recovery of the economy, and reform of financial systems. It consisted of a series of measures enacted between 1933 and 1936. One of these strategies, designed at protecting the future housing market, involved the formation of three agencies: the Federal Home Loan Bank Board (FHLBB), the Home Owners' Loan Corporation (HOLC), and the Federal Housing Administration (FHA). The underwriting practices of these agencies were informed by a racist ideology, resulting in minority areas and races being systematically deprived of financial support.

HOLC REDLINING  

In 1935, the FHLBB commissioned the HOLC to draw up 'residential security maps' of 239 US cities, designed to indicate the security level of real-estate investments. These maps, which were based on racial assumptions rather than factual data, identified minority neighborhoods as unable to meet lending criteria. This resulted in many African-Americans being unjustly refused mortgages.  The maps were kept secret amongst select members of the banking and real-estate industries. Once discovered in the 1960s, this discrimination practice became known as ‘redlining’.

GI BILL  

By October 1946, in New York and northern New Jersey, ''fewer than 100 of the 67,000 mortgages insured by the G.I. Bill supported home purchases by non-whites.'' (Nick Kotz, NYTimes)  In 1944 the US Government created the Servicemen's Readjustment Act (GI Bill) providing a range of benefits, including guaranteed housing loans for the millions of veterans returning home. White veterans were able to use these benefits to buy homes in the quickly growing suburbs. While, black veterans were unable to obtain loans for mortgages in black neighborhoods because of 'redlining' practices, in addition to facing exclusion from the white suburbs by various forms of de facto segregation. In the post war era, as most whites continued to accumulate home equity, most blacks remained renters.