How Government Policy Encouraged Housing Discrimination And Hurt Black Wealth

See Choosing a School for My Daughter in a Segregated City: How one school became a battleground over which children benefit from a separate and unequal system by NIKOLE HANNAH-JONES. From the NY Times.

"In 1952, a black woman named Gladys McBeth became one of Farragut’s earliest tenants. Nearly three generations later, when I visited her in November, she was living in the same 14th-floor apartment, where she paid about $1,000 a month in rent. Back then, she said, Farragut was a place for strivers. “I didn’t know nothing about projects when I moved in,” she said. “It was veteran housing.” The project housed roughly even numbers of black and white tenants, including migrants escaping hardship from Poland, Puerto Rico and Italy, and from the feudal American South. To get in, everyone had to show proof of marriage, a husband’s military-discharge papers and pay stubs.

Robert McBeth, Gladys’s husband, drove a truck, while she stayed home raising their four children. In the years before the Brown decision, the oldest of the McBeth children went to a nearby school where the kids were predominantly black and Latino, because the New York City Board of Education bused white children in the area to other schools, according to the N.A.A.C.P. School officials at the time, as today, claimed the racial makeup of the schools was an inevitable result of residential segregation. Though Farragut was not yet segregated, most of the city was. And that segregation in housing often resulted from legal and open discrimination that was encouraged and condoned by the state, and at times required by the federal government.

Nowhere would that become more evident than in Farragut, which by the 1960s was careering toward the same fate overtaking nearly all public housing in big cities. White residents used Federal Housing Administration-insured loans to buy their way out of the projects and to move to shiny new middle-class subdivisions. This subsidized home-buying boom led to one of the broadest expansions of the American middle class ever, almost exclusively to the benefit of white families. The F.H.A.’s explicitly racist underwriting standards, which rated black and integrated neighborhoods as uninsurable, made federally insured home loans largely unavailable to black home seekers. Ninety-eight percent of these loans made between 1934 and 1968 went to white Americans.

Housing discrimination was legal until 1968. Even if black Americans managed to secure home loans, many homes were off-limits, either because they had provisions in their deeds prohibiting their sale to black buyers or because entire communities — including publicly subsidized middle-class developments like Levittown on Long Island and Stuyvesant Town in Manhattan — barred black home buyers and tenants outright. The McBeths tried to buy a house, but like so many of Farragut’s black tenants, they were not able to. They continued to rent while many of their white neighbors bought homes and built wealth. Scholars attribute a large part of the yawning wealth gap between black and white Americans — the typical white person has 13 times the wealth of a typical black person — to discriminatory housing policies."