Redlining and Racial Covenants: Jim Crow of the North

Summary

The video script discusses the impact of the National Housing Act and the establishment of the Home Owners' Loan Corporation (HOLC) during the New Deal era, which aimed to stabilize the housing market by providing long-term mortgages with fixed interest rates. However, it also led to the practice of redlining, where neighborhoods were designated based on racial occupancy, creating systemic inequality. The FHA's color-coded maps rated areas for investment, with 'red' being hazardous and 'green' the most desirable, often correlating with racial demographics. This policy not only discriminated against people of color but also enriched white communities, embedding white supremacy in the built environment and perpetuating racial inequality in housing.

Takeaways

• 🏠 The National Housing Act and the establishment of the Home Owners Loan Corporation (HOLC) in 1934 aimed to stabilize the housing market by providing long-term, fixed-rate mortgages, making homeownership accessible to many Americans.
• 📈 The HOLC's underwriting practices involved color-coded maps that categorized neighborhoods into four risk categories, which inadvertently led to the practice of redlining and perpetuated racial segregation in housing.
• 🔴 The term 'redlining' originated from the HOLC's practice of marking 'hazardous' neighborhoods in red on their maps, often correlating these areas with non-white populations.
• 🏢 The FHA's racialized spatial valuation system deemed areas with predominantly African-American or minority populations as less desirable, reinforcing racial disparities in housing opportunities.
• 📉 There was no factual basis linking racial occupancy to higher loan defaults; the FHA's practices were rooted in racial bias rather than economic reality.
• 💼 Racial covenants, which restricted property ownership to white individuals, were promoted by the FHA as a means to increase property values and reinforce white wealth.
• 🚫 The practice of redlining institutionalized racial segregation and led to the widespread implementation of racial covenants, affecting housing policies and urban development.
• 🚧 The refusal to integrate Minneapolis and the concentration of public housing in specific areas led to the creation of urban poverty and reinforced racial and economic segregation.
• 🏢 The City Council of Minneapolis' decision to concentrate public housing units in one area, rather than scattering them, contributed to the creation of a concentrated area of poverty and limited housing opportunities for low-income families of color.
• 🏡 The historical context of racial covenants and redlining has had a lasting impact on the inheritance of wealth and opportunities for families of color, perpetuating systemic inequality.

Q & A

What was the impact of the National Housing Act on homeownership in the United States?

The National Housing Act, particularly through the establishment of the FHA, made homeownership more accessible to middle-class and working-class families by offering long-term mortgages with fixed interest rates, thus reducing risk for banks and placing it on the federal government.

What is 'redlining' and how did it originate?

Redlining refers to the discriminatory practice of denying financial services, such as mortgages, to residents of certain areas based on the racial or ethnic composition of those neighborhoods. It originated in the 1930s when the FHA created color-coded maps to designate neighborhoods for mortgage lending, with 'red' areas being considered hazardous and often associated with non-white populations.

How did the Home Owners' Loan Corporation (HOLC) contribute to racial segregation in housing?

The HOLC contributed to racial segregation by establishing designations for neighborhoods based on the occupants, which led to the practice of redlining. Areas with predominantly African-American or minority populations were often given lower ratings, making it difficult for residents to secure mortgages and reinforcing racial boundaries.

What were the four color-coded areas used by the FHA to rank neighborhoods, and what did each color signify?

The FHA used four colors to rank neighborhoods: red (hazardous), yellow (definitely declining), blue (still desirable), and green (best). These colors were used to indicate the level of risk associated with lending in those areas, with red being the highest risk and green the lowest.

What was the role of restrictive covenants in the FHA's underwriting practices?

Restrictive covenants were agreements that prevented the sale of property to certain racial or ethnic groups. The FHA's underwriting manual indicated that areas with restrictive covenants in place were more likely to receive a green designation, which was the best rating for mortgage lending, thus rewarding racial segregation.

How did the practice of redlining affect the wealth and opportunities of different racial groups?

Redlining led to the systematic denial of mortgage loans to non-white communities, which in turn limited their access to homeownership and the wealth accumulation associated with it. This practice contributed to the creation of urban poverty and perpetuated racial wealth disparities.

What was the significance of the 1935 land-use planning map in the context of housing policies?

The 1935 land-use planning map was significant as it was used to determine which areas would receive mortgages and which would not. It often labeled areas with predominantly non-white populations as 'slums' or undesirable, further reinforcing racial segregation and limiting housing opportunities for these communities.

How did the creation of public housing in Minneapolis reflect the city's racial dynamics?

The creation of public housing in Minneapolis, particularly the Sumner field homes, became a focal point of racial segregation. The city council's decision to concentrate over a thousand units of public housing in one area, rather than scattering them, was influenced by conservative politicians and suburban communities, reflecting the city's racial tensions and inequalities.

What is the connection between racial covenants and the concept of 'white supremacy' as discussed in the script?

Racial covenants are connected to 'white supremacy' as they were designed to maintain and enrich white communities by legally restricting property ownership to white people. This practice was part of a broader system that embedded racial inequality into the built environment and perpetuated racial segregation.

How did the historical practices of redlining and racial covenants shape the personal experiences of individuals and families in Minneapolis?

The historical practices of redlining and racial covenants shaped personal experiences by creating stark contrasts in living conditions, educational opportunities, and wealth accumulation between white and non-white communities. This led to a legacy of inequality that affected generations and continues to influence the city's racial dynamics.

Outlines

00:00

🏠 The Impact of Redlining on Homeownership

This paragraph discusses the transformative role of the National Housing Act and the establishment of the Home Owners' Loan Corporation (HOLC) during the New Deal era under President Franklin D. Roosevelt. The HOLC aimed to stabilize the housing market by offering long-term, fixed-rate mortgages, making homeownership accessible to middle and working-class families. However, the HOLC also introduced redlining by creating color-coded maps that designated neighborhoods based on the racial composition of residents. This practice led to racial discrimination in mortgage lending, with predominantly black and brown neighborhoods being labeled as 'hazardous' or 'declining,' effectively denying them loans. The paragraph highlights the lasting impact of these policies on racial wealth disparities and the perpetuation of systemic inequality.

05:01

🏢 The Legacy of Racial Covenants and Public Housing in Minneapolis

The second paragraph delves into the personal and historical implications of racial covenants and public housing policies in Minneapolis. It recounts the experiences of different generations living in areas defined by racial covenants and the creation of public housing in 1938. The city's resistance to scattering public housing units led to the concentration of low-income housing in specific areas, exacerbating urban poverty. The paragraph also touches on the personal narrative of the speaker, whose grandparents benefited from the housing policies of the time, growing up in predominantly white, privileged neighborhoods. The speaker reflects on the unspoken exclusivity of these neighborhoods and the broader implications of such policies on the city's social and economic landscape.

Keywords

💡National Housing Act

The National Housing Act was a pivotal legislation in the United States, enacted in 1934 as part of the New Deal. It aimed to provide financial support to the housing industry during the Great Depression. The Act established the Federal Housing Administration (FHA), which insured mortgages, making home ownership more accessible to Americans. In the video, it is mentioned as a key factor in stabilizing the housing market and enabling middle-class families to purchase homes.

💡FHA (Federal Housing Administration)

The FHA is a United States government agency that was created as part of the National Housing Act. It plays a crucial role in the housing market by providing mortgage insurance, which reduces the risk for lenders and makes home loans more accessible. The video discusses how the FHA's underwriting of mortgages in the 1930s was a game changer, but also how it contributed to racial segregation through its discriminatory practices.

💡Redlining

Redlining refers to the systematic denial of various services, such as banking or insurance, to residents of certain neighborhoods based on the racial or ethnic composition of those neighborhoods. The term comes from the practice of drawing red lines on maps to delineate areas considered 'risky' for investment. In the video, redlining is highlighted as a discriminatory practice by the HOLC (Home Owners' Loan Corporation), which established neighborhood designations that affected access to mortgages.

💡HOLC (Home Owners' Loan Corporation)

The HOLC was created as part of the New Deal in 1933 to help homeowners refinance their mortgages during the Great Depression. However, as explained in the video, the HOLC also played a significant role in redlining by creating color-coded maps that designated certain neighborhoods as 'hazardous' or 'declining' based on the racial composition of the residents, which led to the denial of loans and insurance in those areas.

💡Racial Covenants

Racial covenants were clauses in property deeds that restricted the sale of property to certain racial or ethnic groups. They were a form of racially restrictive housing policy that enforced segregation. The video explains that the FHA's underwriting manual encouraged the use of racial covenants to maintain property values, thereby reinforcing racial segregation and benefiting white property owners.

💡Spatial Desirability

Spatial desirability refers to the perceived value or attractiveness of a particular area or neighborhood, often based on factors such as safety, amenities, or the socio-economic status of residents. The video discusses how the FHA linked spatial desirability with racial occupancy, deeming areas with predominantly African-American or minority residents as less desirable for investment.

💡Public Housing

Public housing is government-owned housing provided to low-income individuals and families. The video mentions the creation of public housing in 1938 as an attempt to address housing shortages and provide affordable housing options. However, it also points out how public housing was often segregated and contributed to the concentration of poverty in certain areas.

💡Urban Poverty

Urban poverty refers to the condition of living in poverty within urban areas. The video discusses how practices like redlining and the concentration of public housing in specific areas contributed to the creation and perpetuation of urban poverty, particularly for communities of color.

💡Segregation

Segregation is the act of separating people based on certain characteristics, such as race or ethnicity. The video emphasizes the role of racial covenants and redlining in institutionalizing segregation in the United States, particularly in the North, which was often perceived as less segregated than the South.

💡Inequality

Inequality refers to the unequal distribution of resources, opportunities, or privileges among different groups in society. The video connects the historical practices of redlining and racial covenants to the ongoing systemic inequality in housing, education, and wealth, particularly affecting communities of color.

💡White Supremacy

White supremacy is the belief in the inherent superiority of the white race and its right to dominate society. The video discusses how white supremacy has been embedded in the built environment and housing policies, such as racial covenants, which not only discriminated against people of color but also enriched white property owners.

Highlights

Introduction of National Housing Act insured mortgages made homeownership more accessible.

The Fair Housing Act of 1934 aimed to stabilize the housing market.

Establishment of the Home Owners Loan Corporation (HOLC) to provide long-term mortgages with fixed interest rates.

FHA underwriting of mortgages in the 1930s reduced risk for banks and increased homeownership opportunities.

HOLC's neighborhood designations based on occupants, leading to the practice of redlining.

Color-coded maps categorized neighborhoods into four areas: red (hazardous), yellow (declining), blue (desirable), and green (best).

No evidence linking racial occupancy to higher loan defaults, challenging the basis of redlining.

Racialization of space by the FHA, linking spatial desirability with racial occupancy.

Areas with predominantly African-American or minority residents were often redlined.

Racial covenants enriched white people while discriminating against people of color.

Redlining institutionalized racial covenants, spreading inequality across the country.

Myth of the North's lack of formal segregation debunked by the existence of racial covenants.

Public housing's creation in 1938 and its role in redesigning space and containing access to affordable housing.

Minneapolis City Council's refusal to scatter public housing units outside of Sumner field homes area in 1953.

Strategic manufacturing of urban poverty through concentrated public housing.

Personal narrative of the impact of racial covenants and redlining on the speaker's family.

The importance of understanding the landscape of privilege and disenfranchisement in housing history.

Transcripts

and now through the use of a National

Housing Act insured mortgage is brought

within the reach of all citizens on a

monthly payment and amidst the New Deal

when the FDR administration is looking

for ways to try to stabilize the housing

market the Fair Housing Act has passed

in 1934 and as part of that the home

owners Loan Corporation is also

established with the hope that if you

could establish long term mortgages with

fixed interest rates you could create

pathways to homeownership for most

Americans when they now spending for

rent when the FHA starts underwriting

mortgages in the 1930s this really is a

game changer in a lot of ways it takes a

lot of risk off the banks it places it

on to the federal government and now

working-class middle-class families

they're able to purchase a home

unfortunately as part of that which what

the holc does is it establishes

designations for neighborhoods based on

the occupants of those neighborhoods and

this is where the term redlining comes

into place

the FHA they made color-coded maps of

all the largest cities in the United

States and they broke cities down into

four different areas red is considered

hazardous that's the worst

yellow is considered definitely

declining blue is considered still

desirable and green is considered the

best and what's so powerful about this

kind of scale of measuring investment it

was about values at people the fact that

matter is that there was no evidence

that those people who lived in those

communities predominantly black and

brown people informed more people would

have defaulted on loans there are no

firm realities behind the close

proximity to blackness in your property

values going down that's just not true

the FHA is being very upfront and very

explicit in how they're linking spacial

desirability with racial occupancy it's

this racialization space idea so areas

that were predominantly african-american

or majority minority or really in a lot

of cases even if there's a few non-white

people there that's often enough to be

redlined so when they built these maps

they also explained why each area got

the ranking it did the area around 4,000

new south which is called old South Side

this was a nice area it had nice homes

it's the historic african-american

neighborhood on the south side of

Minneapolis this one part of South

Minneapolis was red lined specifically

due to am quoting a gradual infiltration

of Negroes in Asiatics the FHA refused

to give an area a green lined

designation again this is the best

designation that they'll go offer unless

and I'm quoting again restrictive

covenants are already in place that

lines from the FHA underwriting manual

racial covenants aren't just about

discriminating against people of color

it's about enriching white people and I

think that's the part that often gets

lost in this narrative and I think it

does speak to the ways that white

supremacy have been embedded and really

built structures and built environments

I mean if your grandparents bought a

home on Minnehaha Creek you know that

homes worth what half million your

grandparents rented an area that was

redlined and then subsequently destroyed

by a freeway project

you're not inheriting anything

in a lot of ways the practice of

redlining which didn't start until the

1930s institutionalized and spread

racial covenants all over the country

because suddenly developers got

sanctioned they got direction from the

federal government saying this is best

practices if you want to have a really

high rating from us if you want to get

the most favorable terms for any loans

by kind of D integrating Minneapolis

which in any ways is what racial

covenants are doing this set the stage

and enabled all these subsequent systems

of inequality to really take and to

really take hold this very persistent

myth that northern cities never had

formal segregation the South had Jim

Crow and look at those signs

well racial covenants did the work of

Jim Crow in in the north all over the

north

many many whites simply were not aware

that there was a segregation

[Music]

so many people in Minneapolis to be

outraged what they thought that their

friend was being discriminated against

they knew something was happening but it

wasn't happening to your friend that was

what kind of a this next kind of a

situation that we had in Minneapolis I

didn't when if you could imagine at

least people their parents sent me

cookies and you know cakes all during

the war and I was I was welcome in their

house there was no question about it and

then there's other people who were just

absolutely Klansmen you know that was

what Minneapolis was all about but that

was the young that was my generation in

Minneapolis we were hemmed in in that

that ghetto and that was that was our

life that was her that was her work the

1935 land-use planning map used to

define which place would get mortgages

versus others circled these areas called

them slums places rather than clinical

Negroes lived is there places to avoid

right so they're going to give you

substandard housing and I gotta contain

you access to affordable housing was a

challenge and you think about the

reasons behind the creation of public

housing we had a lot of folks forced to

the low-wage sector all right and you're

thinking about what jobs or

opportunities that low-income folks of

color even had access to at this time

you know I would argue that with the

creation of public housing in 1938 the

Summoner filled homes became this really

interesting iteration of the redesign of

space you have 400 units of public

housing which were segregated at the

time created in 1953 the City Council of

Minneapolis refused to scatter another

thousand units of public housing outside

of the Sumner field homes area and where

do these pressures come from you've had

both internal conservative politicians

and outlying suburban communities coming

in saying not in my neighborhood and the

City Council crumbled under the pressure

and then took what was 400 units of

public housing to over a thousand units

and

less than a decade they have

strategically manufactured urban poverty

[Music]

this history is is very personal for me

I'm a third generation mini a Politan my

grandparents were immigrants from Sweden

who came to this country with nothing

you know worked incredibly hard jobs but

both sets of my grandparents in 1942

were able to buy houses in south

Minneapolis these houses were in a part

of the city that was blanketed by racial

covenants because of those racial

covenants Mike my parents grew up in

neighborhoods that were entirely white

and and in many ways they described them

as as a paradise for children they had

wonderful parks they had really solid

schools that sent them to college but no

one in their neighborhood ever talked

about the fact that this neighborhood

was only for white people and I want

everyone with this map to imagine

themselves in this landscape of

privilege and disenfranchisement

[Music]