The Origins of the Housing Crisis

As a History major, I have taken extensive coursework on structural inequalities experienced by black Americans. I’d like to take the time here to share a brief summary of what I’ve learned. All of this information comes either from in-class sessions with Professors Mapes and Crosby or from Thomas Sugrue’s book “The Origins of the Urban Crisis: Race and Inequality in Postwar Detroit,” which I would highly recommend for those looking to contextualize racial inequalities in the modern age.

In northern cities like Chicago and Detroit, the demand for production during World War II created a labor shortage at a time when, due to the restructuring of the southern agricultural economy, farming jobs were disappearing in the Jim Crow South. Because of this, a huge migration of black citizens flooded north to fill these jobs. Amid pressure by A. Phillip Randolph, an early civil rights leader who led the March on Washington Movement to protest employment discrimination, FDR created the Fair Employment Practices Commission (FEPC) to ban discrimination in war industries. Although the commission didn’t have the resources to enforce their mandate through tangible consequences to the offending industries, blacks still gained large footholds in industrial work, largely in unskilled and dangerous positions as opposed to highly-regarded skilled positions.

The problem with this advancement was that segregation still had a presence in the North, particularly in housing. White residents instituted racial covenants meant to “preserve the racial character” of their neighborhoods, a practice which extended even after the Supreme Court’s ruling that it was unconstitutional. They also created specific requirements in the deeds of the houses that prohibited multiple families living in one home to deter black families with less income from moving in together. But it wasn’t just segregation that led to this crisis; housing itself was not able to expand as fast as people were moving into the city. Because of their newfound job stability, white working class residents wanted single-family homes instead of apartment complexes, and the private construction industry obliged them while neglecting to expand or reconstruct run-down inner city housing for blacks, which was often molded, rat-infested, and lacked proper plumbing and running water. The government call for more low-income housing projects was met with white resistance, as they didn’t want black housing to be constructed near their neighborhoods. As a result, public housing was largely designated as white-only.

Here we get into the actions of those who were able to make a huge profit off of the fear of property devaluation and lack of affordable housing for blacks. First off, although black housing in the inner cities was some of the most decrepit, insufficient stock in the city, slum lords (white landlords who owned these buildings) regularly increased rent above what it would cost to live in a mid-range white apartment complex and subdivided the apartment, renting out three-bedroom apartments to twelve people in some cases.

The other profiteers of this system were real estate agents. Because of the government-sponsored Home Owner’s Loan Corporation (HOLC) who “redlined” black neighborhoods, meaning that it designated them as high risk and of little worth, white homeowners believed that integration in their neighborhoods would lead to a loss in their house values. Realtors thus used the “block busting” technique of selling a house to black residents (usually at a price far above market value) to intimidate whites into fleeing the neighborhood. They went so far as to pay black children to go door-to-door in all white neighborhoods handing out flyers bearing messages like “It’s time to sell your home. You know that.” to make them fear integration, even if no black families had actually moved in. Whites would then be motivated to sell their houses at below market value in order to flee as quickly as possible, believing their home’s value would only depreciate further.

However, the lower the income was of the white neighborhood in question, the more likely its residents would stay and fight integration, as they didn’t have the resources to move. The violence resulting from this was mostly psychological harm and property damage. Black pioneers would regularly be subjected to harassing phone calls day and night from local housewives, large mobs setting off firecrackers and shouting racial epithets outside their homes, and property damage in the form of broken windows, splattered paint, arson, forced entry, flooding, salting or setting fire to their lawns, and burning effigies (see our in class discussions) to name a few. Most black pioneers, who were wealthier than most blacks, could not stand the abuse they suffered even with the reluctant help of the local police forces, and ultimately moved out.

When blacks finally did move in to white neighborhoods successfully, whites fled the area, taking their tax money with them. The turnover rate in integrated neighborhoods was remarkably fast and led to a huge depletion of wealth in the affected areas, draining public school funds and shutting down many local businesses.

Here it is important to note that wealthy whites had less at stake in this power struggle, as they lived in areas impermeable to most blacks and, if integration came to their neighborhood, they possessed the capital to leave the area more readily than their working-class counterparts. This reflects the pitting against each other of poor whites and blacks by wealthier individuals and political institutions to keep both groups from advancing and cementing “proof” of stereotypes through property devaluation that was forced by their own hand through the system of ranking black-occupied areas as inherently less valuable and not as well maintained. The term “self-fulfilling prophecy” is a term frequently thrown around in discussions of this history for this reason.

Ultimately, this conflict came at a time of deindustrialization in which black workers were usually the first to be laid off. Eventually, a huge part of a new generation of blacks were completed excluded from the work force, leading to a cycle of perpetual unemployment and frustration with the institutions that kept them from sufficient housing, educational, and employment opportunities. While the NAACP focused its efforts on getting black workers into all white professional industries, the majority of unskilled laborers were left without support from local unions, which were largely white, and black improvement groups like the Urban League, which likewise focused on highly skilled professions.

Though this post by no means captures every cause and result of the housing crisis in the urban North, I hope it adds some context to the overall understanding of how structural inequality has evolved through time and what exacerbated racial tensions in the modern era. I see the best reflection of this struggle in our current time through the slow decline of the Housing and Urban Development Department in our government, a program that has essentially funneled money into segregated cities to encourage desegregation without any means to enforce their directives. These fundamental problems are still very much present today, and I look forward to the exploration of how the legacy of housing crises ties in to the specifics of the 2008 Housing Crisis.

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