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Before backing the loans, agencies mapped communities along the length and breadth of the country, dividing them into zones judged to be higher or lower risk for banks. Pictured is a 1937 Home Owners' Loan Corporation (HOLC) "residential security" map of Philadelphia, classifying various neighborhoods by estimated 'riskiness' of mortgage loans.
After the Second World War, the Federal Housing Administration (FHA) and the Veterans Administration hired builders to mass-produce American suburbs in order to ease the post-war housing shortage. One of these communities was Levittown in Pennsylvania.
Levittown's typical homeowner was the "average American"—a white, semi-skilled worker with a wife and two children earning an average income of around US$3,000 who drove his own automobile and possessed modern accessories such as a refrigerator, radio, and telephone.
Levittown quickly became a thriving community of white-only residents. The town featured modern shopping malls with plenty of parking space set in open green space.
Builders received federal loans on the explicit proviso that homes would not be sold to black homebuyers. This ensured that only qualified white veterans could purchase a Levittown property, for a fraction of rental costs.
The New Deal transformed American society. But black Americans reaped far fewer benefits from these programs than white Americans.
Black Americans were encouraged to do so in part by Franklin D. Roosevelt's New Deal—a series of programs, public work projects, financial reforms, and regulations signed off by the president in 1933.
The Great Migration was the relocation of more than six million African Americans out of the rural Southern United States to the urban Northeast, Midwest, and West between 1910 and 1970. Pictured is a map illustrating the proportion of African Americans to total population at the Twelfth Census 1900.
African Americans were driven from their homes by unsatisfactory economic opportunities and harsh segregationist laws.
The African-American community, meanwhile, was understandably enraged by what they saw as government-sponsored segregation. In 1941, Chicago workers formed a picket line in front of the Mid-City Realty Company in Chicago demanding equal pay and a home to live in. One sign reads: "WHY PAY RENT WHEN THE BUILDING NEEDS REPAIR?"
In Detroit, white homeowners were signaling their own indignation. In an effort to prevent black people moving into the city's 200-unit Sojourner Truth Housing Project, residents erected this sign: "WE WANT WHITE TENANTS IN OUR WHITE COMMUNITY."
In the early 1950s, efforts were made to create legally integrated housing estates. One of these was located in St. Louis, Missouri. It was called the Pruitt-Igoe housing project.
And much of the trumpeted "affordable" housing built in the 1930s, '40s, and '50s to accommodate black families, residential developments such as the Fredrick Douglass Housing Projects in Detroit (pictured), were being pulled down or had already been demolished.
Black people, many of whom had sought a new life and new opportunities in the city, suddenly found themselves excluded from this benefit. Pictured: this color coded illustrated map of Richmond, Virginia, in 1937 is annotated to show mortgage lending risk based on neighborhood, including residential, commercial, and industrial areas.
A key factor federal mapmakers used to determine this perceived risk was race. This practice, called redlining, effectively cut people of color off from affordable borrowing. Pictured is a mid-'30s redline map for Miami, Florida.
The first notable wave of the Great Migration coincided with the Great Depression, during the early 1930s. Entire families simply packed up and left, many choosing to make a new life in a city environment.
Discrimination quickly became apparent when New Deal agencies began insuring affordable home loans.
The New Deal provided economic rights for people, things like the right to capital, the right to employment, the right to health care, and the right to a pension. But these rights were far from inclusive.
The first Levittown home sold for US $7,900 ($108,294 in 2023, adjusted for inflation) and in a short period of time, 17,000 units were sold, providing homes for 84,000 people.
Meanwhile in California, a group of people established the Peninsula Housing Association (PHA), formed with the goal of purchasing a tract of land and developing a housing cooperative. They called their new community Ladera. The PHA refused to place restrictive covenants on title deeds. However, the FHA would not insure loans to co-ops that included African-American members, a reference to the three black American members of the PHA. Redlining was apparent even in America's rural suburbs!
Built using federal funds, Pruitt-Igoe became one of the most notorious and short-lived public housing projects in America. While supposed to offer integrated accommodation, Pruitt was effectively for blacks while Igoe was for whites.
While the waiting list for Pruitt was long, Igoe experienced vacancies. Living conditions in Pruitt–Igoe began to deteriorate soon after completion, and by the mid 1960s it was plagued by poor maintenance and crime. By 1976, the entire estate had been demolished.
The longer-term effects of African Americans being prohibited from buying homes in suburbs were devastating. In one infamous example in Detroit in the 1940s, the FHA refused to greenlight a whites-only residential development unless the developer built a 1.80 m (6 ft) high cement wall separating his development from a nearby African-American neighborhood.
Furthermore, those African Americans who might have been able to purchase their own home but were prevented by the FHA from doing so gained none of the equity appreciation that white homeowners enjoyed.
Redlining and segregation led to the creation of ghettos. These environments fostered crime and poverty where the disenfranchised were forced to live in squalid conditions.
In 1968, the Fair Housing Act was passed. One of the central objectives of the act was to prohibit race discrimination by direct providers of housing, such as landlords and real estate companies as well as other entities, such as municipalities, banks or other lending institutions and homeowners' insurance companies. Pictured is civil rights activist Clarence Mitchell with President Lyndon B. Johnson at the signing of the Act at the White House.
The yawning gulf in education and income between American black families and white families has narrowed considerably since the civil rights era. But the gap in wealth, what families own, remains a contentious issue.
"The segregation that [the New Deal] program alone created is responsible for much of the racial inequality we have in this country today," laments Richard Rothstein, the author of 'The Color of Law,' when interviewed by Time.
Sources: (Time) (NPR) (Library of Congress) (The Sojourner Truth Project) (U.S. Department of Justice)
See also: A glimpse into the struggles and injustices faced by the poor throughout history
In 1933, the New Deal offered hope and opportunity to millions of Americans battered and bruised economically by the Great Depression. But not everyone benefitted. While this series of federal programs, public work projects, financial reforms, and regulations helped thousands gain a foothold on the property ladder, it effectively excluded African-American families from buying their own home. Race-based lending rules drawn up by the Federal Housing Association kept black families locked out of suburban neighborhoods, a shameful policy the legacy of which is responsible for much of the racial inequality experienced across the United States today. But why exactly were black Americans banned from settling in suburbia, and what were the repercussions? .Click through and revisit one of the more shameful chapters in American history.
But in the eyes of many African Americans, it was too little, too late. Suburban property that originally cost around US$10,000 in the 1950s was by the early 1970s worth upwards of $300,000—homes no longer in reach to the families that could've afforded them when whites were buying into those same suburbs.
Police were called when tempers flared after white residents, protesting the idea of the Sojourner Truth Project, clashed with their black neighbors. In the ensuing melee, 14 people were injured and at least 20 arrests were made.
How the government created white-only suburbs in the US
The shameful redline policy that deemed African Americans a mortgage "risk"
LIFESTYLE Society
In 1933, the New Deal offered hope and opportunity to millions of Americans battered and bruised economically by the Great Depression. But not everyone benefitted. While this series of federal programs, public work projects, financial reforms, and regulations helped thousands gain a foothold on the property ladder, it effectively excluded African-American families from buying their own home. Race-based lending rules drawn up by the Federal Housing Association kept black families locked out of suburban neighborhoods, a shameful policy the legacy of which is responsible for much of the racial inequality experienced across the United States today. But why exactly were black Americans banned from settling in suburbia, and what were the repercussions?
Click through and revisit one of the more shameful chapters in American history.