Starting in 1933, the New Deal Administration created HOLC (Home Owners Loan Corporation) to address the Depression’s foreclosure crisis by making low-cost loans available to home owners or buyers.
To ensure the safety of these loans, HOLC hired local real estate agents to create color-coded maps of every metropolitan area of the country. (See “Mapping Redlining”). Areas colored green were safest and red were riskiest. Even the most stable African American neighborhoods were “redlined.”
HOLC, the FHA, and other government agencies worked together with banks, appraisers, and the real estate sector to deny mortgages or housing loans to African Americans. The presence of one black entering a neighborhood could cause the entire community to be redlined–no housing loans available for anyone, black or white.
What that means today and why you should care:
From 1933 to 1968 (when the Fair Housing Act was passed) blacks were systematically denied the ability to invest in property, while whites could build equity in homes, and subsequent wealth. Today blacks have about 6-7% the wealth of whites (that’s “wealth,” not income).
The policy of redlining meant whites fled communities when blacks moved in, and segregation came to define America. Segregation costs cities a lot–both in real dollars and the resulting concentration of poverty and violence we see too often. (See Resources below.)
“How Redlining Segregated Chicago, and America” by Whet Moser, Chicago Magazine
“Confessions of a Blockbuster,” by Norris Vitchek as told to Alfred Balk The Saturday Evening Post, July 1962.
“The Cost of Segregation” The Metropolitan Planning Council report
“A Black and White City: How Race Continues to Define Real Estate in Chicago” Chicago Agent Magazine
“The racial wealth gap: How Africa-Americans have been shortchanged out of the materials to build wealth” Economic Policy Institute
“The Widening Racial Wealth Divide” by James Surowiecki, The New Yorker
Block By Block, Neighborhoods and Public Policy on Chicago’s West Side
by Amanda I. Seligman | Buy on Amazon
Family Properties, Race, Real Estate, and the exploitation of Black Urban America
by Beryl Satter | Buy on Amazon
The Warmth of Other Suns: The Epic Story of America’s Great Migration
by Isabel Wilkerson | Buy on Amazon
As Long as They Don’t Move Next Door, Segregation and Racial Conflict in American Neighborhoods
by Stephen Grant Meyer | Buy on Amazon
The South Side, A Portrait of Chicago and American Segregation
by Natalie Y. Moore | Buy on Amazon
Making the Second Ghetto, Race & Housing in Chicago, 1940-1960
by Arnold R. Hirsch | Buy on Amazon
The Color of Law: A Forgotten History of How Our Government Segregated America
by Richard Rothstein | Buy on Amazon
The New Jim Crow: Mass Incarceration in the Age of Colorblindness
by Michelle Alexander | Buy on Amazon