Black Homeownership

Class structures in America will always remain complex and even convoluted; in a system in which at any moment you may fall or rise into a particular strata and a country where "upward mobility" is part of the allure of even existing as a citizen the distillation of a class structure into three homogeneous groups cannot paint a clear and accurate picture but removing the nuance may perhaps illustrate why homeownership in America is paramount to the building and maintaining of wealth and why the barriers placed in front of Black folk in that pursuit are particularly insidious in nature.

Simply put - the working or lower class gains its income from wages, the middle class from salaries and profit and the upper class from property, rent and interest. One may graduate from a wage earner to a salary earner, or even from a salary earner to property owner but the jump from wage earner to property owner is a dangerous and slippery feat. It is clear, however, that owning a home helps one to generate wealth in a way that simple monetary income cannot.

It is no mistake that buying a home is often called an "investment". They typically increase in value, tax breaks allow for saving and the predictability of costs associated with owning a home allows for stability in financial planning. The benefits of homeownership are varied and compound but one of the most basic and important benefits is that of legacy. The passing of property from one generation to another allows for the creation of intergenerational wealth, the affects of which families can feel for literal centuries.

The Great Depression saw the need for federal intervention in the American economy. One of the many New Deal creations, which sought to alleviate the poverty Americans were facing, was the National Housing Act of 1934 which established the Federal Housing Administration. The FHA was formed to improve housing standards and conditions, provide an adequate home financing system through insurance of mortgage loans, and to stabilize the mortgage market. The new project did what it set out to do - homeownership in America doubled from approximately 30% to more than 60% from 1930 to 1960.

It was quickly made apparent, however, that this program was not put in place for African American citizens. The neighborhood appraisers who made notes to the federal government gave grades to each area from A - D. D grade neighborhoods were almost invariably majority minority neighborhoods and were described as "hazardous", "declining", "undesirable" and as being in "poor upkeep". The federal government was then not inclined to underwrite loans in those neighborhoods and definitely not for the people living in those neighborhoods. Even neighborhoods that carried the threat of "Colored infiltration" were graded lower on the scale than those where it was likely to remain all White. This redlining of neighborhoods ensured that not only could African Americans not move into better neighborhoods, but that the ones that they already lived in did not receive the cash flow to maintain them. These practices were not outlawed until 1968's Fair Housing Act. This also meant that African Americans were not afforded the ability to buy the homes they lived in the way that FHA loans afforded the same opportunities to White folk. Less than 2% of all FHA home loans went to Black people and other people of color.

The FHA also invested considerable interest in providing loans to White soldiers returning from WWII and the conflation of patriotism and homeownership created the idea that to be a "good American" a man must own his home and build a nest egg for his family. To continue to exclude African Americans from benefiting from these systems was to paint Black as "bad Americans".

As evidenced by the Black Metropolises of South Side Chicago and Harlem where Robert Abbott and Langston Hughes lived alongside domestic workers and railroad men, the segregation of Black people into certain neighborhoods did not have respect for income. There has always existed, and indeed still exists, a stop gate on the kind of neighborhoods in which Black folk are allowed to live. Sociologist Patrick Sharkey's research concluded that Black families making $100,000 live in the same kinds of neighborhoods as White families making $30,000. A pamphlet created by the National Association of Real Estate Board in 1943 conflates a "colored man of means" with "bootleggers" and "gangsters" - labeling them all undesirable to live in upscale White neighborhoods.

When Black folks could afford on their own to buy houses a new kind of evil emerged - the predatory contract lender. "It was like people who like to go out and shoot lions in Africa. It was the same thrill." one housing attorney said of the practice. Contract lenders would buy a house for a low rate and then sell it to a Black family for a grossly higher rate, on the knowledge that this family would do all that it could to own this house.

In April 1957, Albert and Sallie Bolton, a Black couple in Chicago purchased a house from White real estate agent, Jay Goran. Goran had acquired the 100 year old wood-frame house for $4,300 and then sold it to the Boltons for $13,900 just a week later. Clyde Ross, the subject of much of Ta-Nehisi Coates' A Case for Reparations, suffered much the same fate. His home, which cost him $27,500, had been purchased by real estate agents for only $12,000 six months prior.

As if this kind of unfair practice had not been enough, these sellers were engaging in much more heinous crimes. They would take a family's down payment, a deposit and the monthly mortgage and when these families became unable to keep up with the monthly installments, would evict them - keeping all of the profits gained - then selling the house at a similar rate to another unsuspecting family. Because the full deed of the house was not awarded to the family until such time that their contract was paid in full, the families would in effect only be renters of this property and the real estate agent would retain full ownership of the homes and the equity accrued in the meantime.