Growing up in Baltimore has offered vast opportunities to witness, firsthand, the tremendous racial divide in our city’s neighborhoods today. My own school, Friends School of Baltimore, located in the historic and predominately white neighborhood of Roland Park, is no more than a few miles away from some of the poorest and majority-black neighborhoods in the city.
To trace this modern-day segregation to its roots, it is necessary to return to the housing sector of President Roosevelt’s New Deal. While the New Deal succeeded in improving infrastructure, and putting Americans back to work, it miserably failed to diversify cities and ensure equal housing, regardless of race or ethnicity.
One of the New Deal’s leading organizations, the Public Works Association (PWA,) set the tone early by segregating black and white public housing. Originally, public housing was meant to provide housing for white middle-to-lower class working families, struggling from housing shortages. Black public housing was built entirely separately. Because white families could afford housing elsewhere, white projects had large numbers of vacancies and black projects had long waiting lists. Public Housing was swiftly turned from housing for white, working class families, to vertical slums for the poor black population.
The Federal Housing Administration (FHA) then took additional steps to ensure that the divide was complete. In 1934, Homer Hoyt became the FHA’s chief economist. In Hoyt’s 1933 Ph.D. dissertation at the University of Chicago, he ranked nationalities in terms of their “real estate desirability,” with black people second to last, ahead of only Mexicans. The FHA’s underlining racism was public and well-known. Thus, not long after the PWA began their construction of segregated public housing, the FHA subsidized the mass production of single-family home suburbs, on one condition: None of these homes could be sold to black families. Even the deed of these new homes included clauses that, by law, prevented the resale of these homes to black families. White, working-class families then began moving out of public housing and into these new suburbs. The FHA’s justification of this lawful segregation was that if black people bought homes in or near these suburbs, the property values of these homes would be in danger. However, the opposite is true: when black families moved into newer and nicer neighborhoods, property values went up because black families were willing to pay more to escape their restricted housing options. It would take until 1948 for the Supreme court to recognize these restrictions on black families in the housing market as unconstitutional.
In addition to the FHA’s outright denial of black families in their subsidized communities, the FHA also assured that anywhere where black people lived or lived near would be denied fair loans and mortgages. Using a method dubbed “Redlining,” these black neighborhoods were colored red on FHA maps to advise caution to banks. Housing in these neighborhoods would not be insured, repaired, or aided by banks or the federal government. On the contrary, the best neighborhoods were colored green. In Baltimore, these included the still heavily-white communities of Homeland and Guilford. These neighborhoods were regarded highly by banks and mortgage brokers. Thus, while families in white neighborhoods were served excellently, black families were forced to agree to much less reliable financing. The continued divide and inequality between these white and black neighborhoods offers insight into the current dislocation of wealth.
Much of the current wealth gap in many major American cities is due to home equity. Black families today make ~60% the income of white families. However, their wealth accounts for only 5% of white families. It is very clear that the FHA’s restrictions on black families is directly correlated with the tremendous wealth gap in America today. White families, in buying new housing with great potential in new suburbs, were able to gain equity on their homes for the entirety of their ownership. This provided opportunities to request home equity loans, and for significant wealth acquisition. Black families, on the other hand, who could have afforded houses in the new suburbs during the New Deal Era could no longer afford them years later because they had not acquired equal equity of the white families living in those communities. The market was now way too high for these black families to afford suburban housing.
It is clear that the modern-day segregation of American cities is not a result of social stances or societal norms, but of a deep-rooted racism within the federal government itself. The New Deal helped to lift America out of depression, but it would also establish a standard of oppression and segregation in housing that still plagues black Americans today.
“A ‘Forgotten History’ of How the U.S. Government Segregated America”: An NPR Fresh Air interview with author Richard Rothstein, linked below:
Not in My Neighborhood, by Antero Pietila