Built Environments #4: The Ghetto Waxes the Ghetto Wanes

As I go through my daily life, I hear a lot of talk about “bad neighborhoods” and “good neighborhoods”.  Good neighborhood is often synonymous with middle-class to upper class white neighborhoods in urban and suburban environments. And bad neighborhood is often synonymous with a black neighborhood. The socio-economic status of the people in the neighborhood, doesn’t seem to matter very much. The presence of black people is enough to make a neighborhood sketchy. “What?!” you might splutter in righteous indignation. “Don’t get mad at me. I didn’t invent white flight.“

If you don’t know what White Flight is, lemme help you out. As the country desegregated and the black middle class was able to move to better neighborhoods, white people fled the racial mixing of the urban areas and headed into the homogeneous bosom of the suburbs.

I don’t know if other countries work like this, but in the US, cities go through economic shifts at about the same time. The same goes for demographics shifts.

Demographic shifts in Detroit

So, white flight didn’t just happen in one city, it happened all across the United States. The same goes for similar historical transitions. In the fifties it was the deindustrialization of northern cities, the creation of suburbs, the development of racist housing policies, and white flight.  In the sixties and seventies it was the creation of “the ghetto”, and the creation and downfall of public housing or housing projects. Then in the eighties and nineties into the present there are sprawl and gentrification and racist lending practices. Of course those time boundaries are not hard and fast rules. Basically, they are just an idea of how populations shift from place to place in our country.

I want to focus on a particular element of these shifts. I want to talk about the origins of ghettos in the United States. It’s important when we talk about Built Environments that we acknowledge the social justice issues inherent in this topic. In November 2011 anti-racist and academic, Tim Wise participated in a debate with A.R. Ward from Andrew Breitbart’s Big Government website. In that debate he did an excellent job of detailing the creation of the urban “bad neighborhoods” in the United States and why those neighborhoods are often majority black. I’ll attempt to give you a rundown of that 3,000 word description. (You can find the full transcript here.)

In his civil discourse with Ward, Wise begins to talk about the decline of, by that time majority black and brown, urban neighborhoods due in part to urban renewal. Urban renewal in the ‘50s to the late ‘60s destroyed a great deal of black-owned housing to make way for progress in the interest of clearing slums. What it actually did was build infrastructure for the suburbs and create conditions of extreme poverty in the cities by drawing jobs away from the center living crowded housing, abandoned housing and buildings, and producing a crime spike. Black people were prevented from moving to those up and coming areas due in large part to housing discrimination in the form of racist lending practices sponsored by the Federal Housing Administration.

That denial of housing ownership, and therefore the stunting of assets growth, by government programs like the FHA loan program and the VA loan program “helped underwrite, on very favorable terms, about $120 billion in home equity for whites by the early 1960s. Blacks were almost entirely excluded from these government efforts due to blatant racism in underwriting criteria. By 1960, about forty percent of all white families or persons with mortgages, had those mortgages because of these preferential lending programs from which blacks were largely excluded. Half of white housing in suburbs was financed this way. Indeed, the white middle class was built by the FHA and VA loan programs, as well as the GI Bill, which, although open to all GIs in theory, operated in practice in a racially discriminatory way as well.”

When the Fair Housing Act was passed in 1968 things were pretty off-kilter. Imagine you’re in a race and someone gets a massive head start. Well, in terms of building equity based on real estate white people in the US got a 30 year heard start. And despite the passage of the Fair Housing Act, unsurprisingly, people didn’t stop being racist. And the law only started to include enforcement provisions in the late ‘80s. So, when the ‘70s saw real estate values triple, creating even more equity for homeowners, the intergenerational inheritance of wealth that results from such a boom missed most black Americans.

And whenever there is a boom in housing market, prices go up. But if one hasn’t been accumulating wealth trapped in their jobless, crime-ridden city for the past couple of decades, then one is priced out of the market. “Literally trillions of dollars worth of property (mostly housing stock) is in the process of being handed down from the baby boom generation to their kids right now. And because the black baby boomers had very little opportunity to accumulate wealth to hand down, that inter-generational process results in the exponential increase in inequity — not merely its maintenance at a steady state — because wealth accumulates value exponentially, rather than income, which grows arithmetically.” No matter how “fair” legislation was supposed to make housing policy it can’t make up for the wealth that will be passed from one generation to the next. The Fair Housing Act can’t account for the lost opportunity to invest in other forms of equity. As a result of the inequity combined with the housing boom the wealth gap grows.

In the 1990s when black families begin to gain wealth that newly-earned wealth is vulnerable to economic downturn. So, when the housing market collapses, black families whose wealth is invested in their homes, are directly financially crippled. Additionally, in that time period, black borrowers are preyed upon by lenders who charged black families more interest than similar white families. That is the story of the urban neighborhoods in the United States according to Tim Wise, but also according to history.

The idea of “where ghettos come from” was brought to my attention by an article on The Atlantic’s website.  “The Ghetto Is Public Policy”, by Ta-Nehisi Coates explores that creation of ghettos or bad neighborhoods in Chicago. The story starts with the Federal Housing Administration’s (FHA) refusal to insure loans for people who chose to live in close proximity to black people, continues through contract-sellers preying on desperate black families in order to turn eviction into its own business, and end with the beneficiaries of contract-selling finding a new career as slum lords. That’s a pretty terrible story. Atlanta has a similarly terrible story, I’ll tell you about it in the second half of this post.

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