Homeownership Symbol Analysis

The HOLC created color-coded maps of every metropolitan area in the nation, with the safest neighborhoods colored green and the riskiest colored red. A neighborhood earned a red color if African Americans lived in it, even if it was a solid middle-class neighborhood of single-family homes.

The full cycle went like this: when a neighborhood first integrated, property values increased because of African Americans’ need to pay higher prices for homes than whites. But then property values fell once speculators had panicked enough white homeowners into selling at deep discounts.
Falling sale prices in neighborhoods where blockbusters created white panic was deemed as proof by the FHA that property values would decline if African Americans moved in. But if the agency had not adopted a discriminatory and unconstitutional racial policy, African Americans would have been able, like whites, to locate throughout metropolitan areas rather than attempting to establish presence in only a few blockbusted communities, and speculators would not have been able to prey on white fears that their neighborhoods would soon turn from all white to all black.

The consequences of racially targeted subprime lending continue to accumulate. As the housing bubble collapsed, African American homeownership rates fell much more than white rates. Families no longer qualify for conventional mortgages if they previously defaulted when they were unable to make exorbitant loan payments; for these families, the contract buying system of the 1960s is now making its return. Some of the same firms that exploited African Americans in the subprime crisis are now reselling foreclosed properties to low- and moderate-income households at high interest rates, with high down payments, with no equity accumulated until the contract period has ended, and with eviction possible after a single missed payment.

“N_____ have moved into Levittown!”

It is certainly true that one cause of segregation today is the inability of many African Americans to afford to live in middle-class communities. But segregation itself has had a high cost for African Americans, exacerbating their inability to save to purchase suburban homes. Income differences are only a superficial way to understand why we remain segregated. Racial policy in which government was inextricably involved created income disparities that ensure residential segregation, continuing to this day.

As it has turned out, schools are more segregated today than they were forty years ago, but this is mostly because the neighborhoods in which schools are located are so segregated. In 1970, the typical African American student attended a school in which 32 percent of the students were white. By 2010, this exposure had fallen to 29 percent. It is because of neighborhood segregation that African American students are more segregated in schools in states like New York and Illinois than they are anywhere else. Throughout the country, not just in the South, busing of school-children was almost the only tool available to create integrated schools—because few children lived near enough to opposite-race peers for any other approach to be feasible. Were housing segregation not pervasive, school desegregation would have been more successful.

Yet unlike the progress we anticipated from other civil rights laws, we shouldn’t have expected much to happen from a Fair Housing Act that allowed African Americans now to resettle in a white suburb. Moving from an urban apartment to a suburban home is incomparably more difficult than registering to vote, applying for a job, changing seats on a bus, sitting down in a restaurant, or even attending a neighborhood school.

The Fair Housing Act of 1968 prohibited future discrimination, but it was not primarily discrimination (although this still contributed) that kept African Americans out of most white suburbs after the law was passed. It was primarily unaffordability. The right that was unconstitutionally denied to African Americans in the late 1940s cannot be restored by passing a Fair Housing law that tells their descendants they can now buy homes in the suburbs, if only they can afford it. The advantage that FHA and VA loans gave the white lower-middle class in the 1940s and ‘50s has become permanent.