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Family Properties - Beryl Satter
#1
Family Properties: How the Struggle Over Race and Real Estate Transformed Chicago and Urban America

This book chronicles the author's father's efforts to combat the housing racket in 1950's Chicago. 

Between 1940 and 1960, Chicago's black population skyrocketed, from 277,731 to 812,637. Only 2 neighborhoods were open to African Americans. Neighborhood improvement associations were organized by the Chicago Real Estate Board - the professional association of white Chicago realtors - and these groups pressured white owners and realtors into refusing to rent or sell to blacks.  Real estate baords across the nation recognized CREB's pioneering work in maintaining all-white communities and looked to CREB for advice as they crafted their own racially restrictive plans. Chicago's realtors were thus instrumental in the creation of a dual housing market both locally and nationally - that is, a "white" market of low prices and expansive neighborhood choices and a "black" market of high prices and extremely limited options.

Whites also adopted restrictive covenants to confine black Chicago-ans to small sections of the city. These legally binding documents limited the ways that a property could be used or disposed of. Most restrictive covenants prevented the sale of property to blacks, although some targeted Jews and Asians as well.

These covenants were introduced in the 1920s, and by the 1940s, Chicago led the nation in their use. Together, the bombings, "neighborhood improvement associations," realtors' sales policies, and restrictive covenants helped create Chicago's first all-black ghetto on the city's South Side. [Between July 1917 and March 1921, there were 58 recorded bombings of properties rented or purchased by blacks in white Chicago neighborhoods.]

Couple this with the FHA's uncritically incorporated racist ideas current in the home appraisal industry, appraisers ensured segregation through their property rating system. Ranking properties, blocks, and whole neighborhoods to either A, B, C, or D - which defined A as being properties located in "homogenous" areas - not "a single foreigner or Negro;" B or C translated to Jewish residents; D meant any black residents - which meant those properties were appraised as worthless or likely to decline in value, so they were "redlined," or marked as locations in which no loans should be made for either purchasing or upgrading properties.

Since banks and savings and loan institutions often relied upon FHA rating maps when deciding where to grant their mortgages, the FHA's appraisal policies meant that blacks were excluded by definition from most mortgage loans. The FHA did not simply recommend the use of restrictive covenants but often insisted upon them as a condition for granting mortgage insurance.

While the FHA generally refused to insure mortgages of blacks moving to white neighborhoods, it was sometimes willing to insure loans in all-black areas. There was a catch, however; it would grant insurance only when the surrounding neighborhood was not "blighted," that is, overcrowded or containing aging properties. Since black enclaves were often marked by just such conditions, most were excluded from FHA insurance. Through its appraisal system, its enthusiasm for racial covenants, and its refusal to insure mortgages for blacks moving to white neighborhoods, the FHA effectively standardized and nationalized the hostile but locally variable racial biases of the private housing industry. 

One way for blacks to evade the racism of the mortgage industry might have been to set up their own mortgage companies, but the Mortgage Bankers Association was an all-white organization; African Americans were barred from both the nation organization and its local subsidiaries. Since mortgage banker training courses were open only to members of the MBA, blacks were excluded from these courses as well.

Biased FHA policies further inflamed white resistance to black neighbors. In the FHA's view, the presence of a single black family was reason enough to refuse to insure mortgage or home improvement loans to an entire block. The redlining of a block could spell its doom, since property owners there could neither obtain loans to improve their homes nor sell them to the typical buyer who used a mortgage to purchase property. Whites now had a motive to keep blacks out that went well beyond amorphous anxieties about the "decline of the human race" - racist fears that could potentially be countered by knowledge and goodwill. Instead, since the presence of a single black family usually led to mortgage redlining, whites had a powerful economic incentive to keep such families out.

Founded in 1934, the MHPC - Metropolitan Housing and Planning Council - along with the University of Chicago, acted to minimize the black presence in Hyde Park. A quasi-official body that was meant to improve the city's housing, it was an elite organization. Its policy was set by its board of governors - consisting largely of the major mortgage bankers, realtors, commercial bankers, industrial and retail leaders of the region. In 1947, the MHPC proposed a solution to the problem of Chicago's downtown Loop shopping district - it was surrounded on its west and south sides by dilapidated housing, which created a physical barrier between Loop businesses and their middle-class customers. Slum dwellers not only did not patronize these upscale department stores but scared off those who did.

The solution - the Illinois Blighted Areas Redevelopment Act - pioneered urban renewal. So long established black communities were razed, forcing the residents to move, usually to already overcrowded black neighborhoods. The Illinois Relocation Act, passed as a companion measure to the Redevelopment Act, allocated money to build public housing for just 15 percent of those displaced by urban renewal. The rest - or 85% - would have to find housing without aid from the sate. Basing relocation funding on the vacancy rate of the whole city "suggests pure hypocrisy - the city's vacancy rate is totally unrelated to the availability of housing for Negroes."

The Relocation Act gave the City Council veto power over all public housing sites, which meant that white Chicagoans were legally able to keep public housing that was open to black residents out of their communities.

President Truman's Housing Act of 1949 incorporated many of the Blighted Areas Redevelopment Act's features. Title 1 allocated federal money to cities to enable them to purchase, raze, and resell slum land to private developers at greatly discounted prices. To get this federal money, cities needed only to assure the fedral government that the slum clearance was part of a broader plan for the area, that the new, privately funded project would be constructed within a "reasonable time," and that the developer would find "decent, safe and sanitary" housing for the displaced. Title III authorized the building of more public housing, but the allocations were so inadequate that most displaced people were left on the streets. What's more, since the act allowed the location of federally funded public housing to be determined by local authorities, whites nationwide were given the power to exclude such housing from their communities. As a resulte, Title III public housing, as in Illinois, waas contstructed in densely overcrowded black neighborhoods, where desperately needed existing residences were destroyed to make room for public housing units.

Ok, on top of all that, what happened? Into this void, came the real estate speculators, who began selling contracts to blacks to purchase a house without a mortgage - the price would be more than what the speculator had paid for it, and would include a sizeable down payment with monthly payments for a few years, along with a requirement to maintain and improve the property, and at the end of the period - say, 3 years - there would be a lump sum payment to be made with a bank mortgage. If the buyers made it this far, the banks would not lend them that money because the property was not worth that final lump payment. 
So ... they miss that payment, the speculator, who hid his ownership, or had a trust account set up with a straw man owner listed, can now begin the eviction process and will be able to re-sell the property, starting the vicious chain over.

Man, talk about stacking the game. Great read, for less than $15. Woof, that typing exercise is over.
A well regulated militia is about defensive, not offensive guns
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