…the housing sector is a prime example of the confluence of influences, often working together, to tilt the playing field away from communities of color.
In Tuesday’s post, we alluded to the multiple institutions, agencies and individual actors that contributed to the development of racial and geographic segregation and discrimination in the Buffalo Niagara region.
When it comes to the shape of our communities and the vast geographic disparities that exist, the housing sector is a prime example of the confluence of influences, often working together to tilt the playing field away from communities of color. In the 20th century and through the subprime lending crisis that still reverberates today, the federal government, private lending and real estate industries each played explicit and interconnecting roles in the decline of urban areas, particularly in communities of color.
We can see the seeds of the de-urbanization and sanctioned housing segregation that was rampant throughout the middle 20th century planted in the tail end of the Great Depression. Redlining, the practice of denying one group of people equal service, terms or access, became an official federal housing policy beginning in 1937, and the trajectory that it established for communities throughout the city has continued to this day. Based on this policy, the federal government would not insure mortgages in areas they deemed prone to “adverse influences”, with those influences being defined almost entirely on the presence of residents of color.
As described in the One Region Forward Equity Assessment (FHEA):
“[The] practice of redlining restricted the flow of capital to many neighborhoods, essentially sealing their fate as communities of decline. Terms such as “protection from adverse influences” and “infiltration of inharmonious racial or nationality groups” were at best thinly veiled phrases used to delineate of minority neighborhoods where banks were advised or self-determined not to lend or to lend sparingly… [It has been] argued that the Federal Housing Administration “did more to institutionalize redlining than any other agency by categorizing mortgages according to their risk level and encouraging private lenders who wanted insurance for their mortgages to do the same”… the harm caused by this [ensuing] decline was both individual and collective, immediate and long- term, impacting at first housing but eventually nearly every facet of access and opportunity for communities of color across the country and specifically in Buffalo Niagara.”
Combined with other federal policies, such as suburban mortgage incentives through the Veterans Administration, the interstate highway system, the HUD – Neighborhood Composition Rule used to segregate and ultimately stigmatize public housing and, later, the exclusion of single and two family houses from fair housing laws, helped dramatically fueled and, arguably, created white flight. Again from the FHEA:
“While some of the residents of diversifying city neighborhoods were content to live in integrated communities, others fled because they did not want to live near blacks. And while some preferred the allure of the white picket fence, others’ hands were forced by a slew of programs and regulations that severely restricted their options. White flight from the city was aided and abetted by the previously mentioned government backed mortgage insurance providers, with additional FHA policies drove investment away from home renovation projects, multiple unit dwellings, attached housing and houses on small lots – essentially most forms of urban development. The combination of low interest rates, low down payments and new construction techniques additionally made it cheaper in many cases to buy a home in the suburbs than to rent a home in the city.”
Far from acting alone, these government policies were extremely lucrative for many in the private sector, especially the finance, real estate and construction industries. Real estate and financial industry manipulation, restrictive race-based housing covenants, blockbusting, steering, speculation and unfair and exploitative lending practices all played a role and fostered a geographic imbalance and generational wealth gap that still exists today.
The One Region Forward Equity Assessment goes into these practices in greater detail, but it also outlines a history of resistance of everyday citizens — such as the early efforts of the Masten District Community Relations Council, and the ongoing efforts of Housing Opportunities Made Equal — fighting for ethical business practices and equal treatment under the law.
It’s available here.