Awareness Wednesday :: Black History Month — Not-So-Fair Housing

Black History Month housing - Mormon Women for Ethical Government

Homeownership is the main way most American families build wealth. As they pay off a mortgage and appreciation builds equity, family wealth is increased. With this wealth, homeowners send their children to college, take care of aging parents, and have the means to take care of themselves when they are elderly. Any equity left over is passed on to their children.

According to the 2016 US Census Bureau data, 72% of white people own their homes but only 42% of African-American people own their homes. This gap is the result of issues created when the U.S. government mandated segregation in housing beginning in 1933.

Soon after the end of the Civil War, the rate of African-American homeownership in 1870 was just 7.7%. From 1870–1910 their homeownership increased to 24%. Given the opportunity, many African-American towns thrived because of their industrious hard work. By the 1920s, Oklahoma had as many as 50 such thriving towns with self-reliant middle class and affluent citizens. These towns served as safe havens for African-Americans from the discrimination they faced in many other places. Reverend S.S. Jones filmed and documented some of these towns with prosperous business owners, landowners, professionals, and clear economic success. Homeownership increased for African-Americans until the 1930s and Great Depression.

Before 1921, Tulsa, Oklahoma, had a prominent concentration of African-American prosperous businesses, such as banks, libraries, grocery stores, attorneys, dentists, boarding houses, doctors, cafes, etc. It was commonly called “Black Wall Street” and had about 10,000 residents. Although Oklahoma had harsh and unjust Jim Crow laws, Black Wall Street and African-American towns allowed many to thrive.

Prejudice still had a strong presence in Tulsa. On May 31, 1921, a violent race riot broke out in the area of Black Wall Street, and a white mob of about 1,500 people brutally attacked and destroyed the whole area. About 300 people were massacred, and over 1,200 homes and businesses were burned and destroyed. Tulsa city officials and law enforcement supported the carnage and even arrested many African-Americans while encouraging the white mob, even deputizing them and giving them weapons. Eyewitness accounts claim police joined the mob, encouraging them to break windows and destroy property. About 35 city blocks were burned and destroyed.

In more racially mixed cities, many working-class neighborhoods were populated by both white and black families. This was because of the diversity of men employed by factories and the train industry, combined with the fact that most people needed to walk to work.

In 1933, the New Deal introduced by President Roosevelt had two main policies to address the massive housing shortage and homelessness brought on by the Depression. The first was the Public Works Administration, which was mainly designed to build affordable housing. The second was the Federal Housing Administration (FHA). It subsidized mass-production builders of entire subdivisions. But these subdivisions came with the requirement that no homes were to be sold to African-Americans, and every home in the subdivision had to have a clause in the deed that prohibited resale to African-Americans in the future. The FHA also subsidized white families to encourage them to move out to the all-white suburbs. This housing was distinctly segregated and forever changed previously integrated neighborhoods.

The FHA also guaranteed the loans to buy homes. With government funds and tax dollars, the FHA used a discriminatory practice called “redlining” to exclude entire neighborhoods from being eligible for mortgages. The “redlined” neighborhoods were claimed to be “hazardous” and credit risks, mainly because of racial and ethnic criteria and demographics. Redlining became illegal in 1968, yet a recent study shows that three out of four neighborhoods “redlined” on government maps 80 years ago continue to struggle economically.

While all this became illegal more than 50 years ago, a 2015 study found that race, even more than income, affected mortgage lending in some urban cities like Baltimore. Another report from February 2018 found that a modern-day redlining continues in 61 metro areas as African-Americans and Latinos are regularly charged mortgage rates much higher than similarly qualified white people. Wells Fargo, one of the biggest banks in the U.S., has had to pay millions of dollars because of race discrimination practices related to African-Americans and Latinos being charged higher rates and fees for mortgages even though they qualified for better mortgages. Our continued discrimination in mortgage lending keeps the economic gap from closing.

Without equity in a home, which is the main source of wealth available to middle- and working-class families, there isn’t money to send children to college, take care of aging parents, or have the means to take care of themselves when they are elderly. There is also no equity to pass on to the next generation.

“Privileged groups routinely assume that all deserving Americans live in decent housing, attend safe schools with caring teachers, and will be rewarded for their hard work with college opportunities and good jobs,” says Patricia Hill Collins in Black Sexual Politics: African Americans, Gender and the New Racism. “They believe that undeserving Blacks and Latinos who remain locked up in deteriorating inner cities get what they deserve and do not merit social programs that will show them a future. This closing door of opportunity associated with hyper-segregation creates a situation of shrinking opportunities and neglect. This is the exact climate that breeds a culture of violence that is a growing component of ‘street culture’ in working-class and poor black neighborhoods.”

Housing and lending discrimination negatively affect all of us. British essayist Samuel Johnson said something in 1782 that is still true today: “Poverty is a great enemy to human happiness; it certainly destroys liberty, and it makes some virtues impracticable, and others extremely difficult.”

Read our other Black History Month posts here.