From the Progressive
Review, January 2000
TPR recently
quoted from a column by Dick Case of the Syracuse Herald American
which revealed that the practice of redlining mortgage loans
for American cities began in the Roosevelt administration, far
earlier than is generally realized. A former Syracuse city planner,
Emanual Carter, who had come across the practice while reading
"A Prayer for the City" by Buzz Bissinger, told Case,
"I think this program almost guaranteed the demise of our
cities."
Now, Jane Levey,
editor of Washington History magazine, points out to us stunning
corroboration contained in a lecture delivered 23 years ago to
the Columbia Historical Society by historian Kenneth T. Jackson.
Jackson, in his address to an organization that is now the Historical
Society of Washington, outlined what was, in effect, a federally-organized
program of urban residential apartheid.
One of the New
Deal's reforms had been the creation of the Home Owners Loan
Corporation, which provided federal guarantees for home mortgages.
Jackson reported that between 1933 and 1936 alone, the HOLC supplied
funds for one tenth of all owner-occupied, non-farm residences
in the country. The FHA, and later the VA, took over the task.
There was a huge
need. Before the FHA and VA, first mortgages usually covered
no more than one-half to two-thirds of the appraised value and
the term was typically only between five and ten years. By the
end of 1958, the FHA had enabled nearly five million families
to own homes and helped more than 22 million to improve their
properties.
At the same time,
however, the legislation discouraged the construction of multi-family
units and provided only small short-term loans for repair of
existing homes. This meant, Jackson noted, that "families
of modest circumstances could more easily finance the purchase
of a new home than the modernization of an old one."
While such restrictions
are well known, other aspects of the program have been long hidden,
such as the FHA weighting system by which underwriters would
judge a neighborhood by such standards as "protection from
adverse influences," "freedom from special hazards,"
and "appeal." The FHA Underwriting Manual warned that
"older properties in a neighborhood have a tendency to accelerate
the rate of transition to lower class occupancy" and suggested
that apartment owners should look to the suburbs, preferably
a site "set in what amounts to a privately owned and privately
controlled park area."
Jackson continued:
"The greatest
fears of the Federal Housing Administration were reserved for
'unharmonious racial or nationality groups.' The alleged danger
was that an entire area could lose its investment value if rigid
white-black segregation was not maintained. To protect itself
against such eventualities, the Underwriting Manual openly recommended
'enforced zoning, subdivision regulations, and suitable restrictive
covenants. In addition, the FHA's Division of Economics and Statistics
compiled detailed reports and maps charting the present and most
likely future residential locations of black families."
In a March, 1939, map of Brooklyn, for example, the presence
of a single non-white family on any block was sufficient to result
in that entire block being marked black. Similarly, very extensive
maps of the District of Columbia depicted the spread of the black
population and the percentage of dwelling units occupied by persons
other than white."
Beginning in
1936, an inventory was created, largely by those in the real
estate industry, and color coded maps were drawn with neighborhoods
rated A through D.Case described the system:
"* Grade
A neighborhood: Up and coming. In demand. Well planned. Color
it green.
"* Grade
B: Completely developed. Still good but not what people who can
afford more are buying. Blue.
"* Grade
C: Buildings aged and obsolete. "Infiltration of lower grade
populations." Experts say "lower grade',' citizens
were blacks (called 'Negroes' by surveyors), Jews and foreign
born whites. C neighborhoods 'lack homogeneity.' Color them yellow.
"* Grade
D: Detrimental influences. Undesirable population. Mostly rented
homes with poor maintenance, vandalism, unstable families. This
is the red area."
Jackson noted
that "black neighborhoods were invariably rated 'D.'"
These were neighborhoods described with such phrases as "the
only hope is for demolition of these buildings and transition
of the are into a business district" or "this particular
spot is a blight on the surrounding area."
Secret "residential
security maps" were drawn up for every block of a city.
These maps were available to lenders and realtors but were kept
secret from the general public. Some of these maps, including
those for DC, Jackson found to be missing from government archives.
The suburban
bias of the FHA was extraordinary. For example, 91% of the homes
insured by the agency in metropolitan St. Louis between 1935
and 1939 were in the suburbs. This practice would continue into
the 60s and even the 70s. Jackson found that in 1976 the federal
government had supplied three dollars in loans for suburban St.
Louis for every one dollar to the city itself. Between 1934 and
1960, $559 million was loaned for suburban construction in the
St. Louis suburbs but only $94 million for the city itself, a
suburban per capita loan in 1961 of $794 vs. an urban one of
only $126.
While the housing
programs of the Roosevelt and Truman administrations helped to
create America's huge middle class, it also secretly created
extraordinary victims, primarily black citizens and the American
city. As Jane Jacobs would put it, "Credit blacklisting
maps are accurate prophecies because they are self-fulfilling
prophecies."