the Progressive Review, January 2000
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
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.
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.
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
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."
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."
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."
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."
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."
"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
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
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
and well-defined restrictions are necessary to the life and success
of every residential colony and in Glover Park these restrictive
standards are steadfastly maintained. Every home owner has the
assurance that the newcomers will make desirable neighbors; that
his home will be free from undesirable encroachments of any nature
and the value of his property will have lasting protection.-
1930 promotional brochure, Glover Park, Washington DC
Rich Benjamin, Alternet - From 1934 to 1962, the Federal Housing
Administration underwrote $120 billion in new housing. Less than
2 percent of that went to nonwhites. From 1938 to 1962, the FHA
insured the mortgages on nearly one third of all new housing
in the United States. Its Underwriting Manuals, however, considered
blacks an "adverse influence" on property values and
instructed personnel not to insure mortgages on homes unless
they were in "racially homogenous" white neighborhoods.
Under its eligibility ranking system, the FHA often refused to
lend money to or underwrite loans for whites if they moved to
areas where people of color lived. Some scholars now call the
government's handiwork a "$120 billion head start"
on white home ownership, on white equity, and on whites' ability
to pass along wealth from one generation to the next.