Title: Racial discrimination in housing
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Title: Racial discrimination in housing a study in quest for governmental access by minority interest groups, 1945-1962
Alternate Title: Governmental access by minority interest groups
Physical Description: iv, 372 leaves. : ; 28 cm.
Language: English
Creator: Berg, Irving, 1926-
Publication Date: 1967
Copyright Date: 1967
 Subjects
Subject: Discrimination in housing -- United States   ( lcsh )
Minorities -- United States   ( lcsh )
Pressure groups   ( lcsh )
Political Science thesis Ph. D   ( lcsh )
Dissertations, Academic -- Political Science -- UF   ( lcsh )
Genre: bibliography   ( marcgt )
non-fiction   ( marcgt )
 Notes
Thesis: Thesis -- University of Florida.
Bibliography: Bibliography: leaves 356-370.
Additional Physical Form: Also available on World Wide Web
General Note: Manuscript copy.
General Note: Vita.
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Bibliographic ID: UF00097823
Volume ID: VID00001
Source Institution: University of Florida
Holding Location: University of Florida
Rights Management: All rights reserved by the source institution and holding location.
Resource Identifier: alephbibnum - 000546156
oclc - 13181133
notis - ACX0115

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RACIAL DISCRIMINATION IN HOUSING: A
STUDY IN QUEST FOR GOVERNMENTAL
ACCESS BY MINORITY INTEREST
GROUPS, 1945-1962






By
IRVING BERG













A DISSERTATION PRESENTED TO THE GRADUATE COUNCIL OF
THE UNIVERSITY OF FLORIDA
IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE
DEGREE OF DOCTOR OF PHILOSOPHY











UNIVERSITY OF FLORIDA
August, 1967













ACKNOWLEDGMENTS


The author wishes to express his appreciation to

Dr. Ernest R. Bartley, Supervisory Committee Chairman, whose

gentle prodding and guidance made possible the completion of

the dissertation; to Dr. Manning J. Dauer, Chairman of the

Department of Political Science, for the assistantships

that allowed the continuance of graduate study; to Frances

Levenson, former Director of the National Committee Against

Discrimination in Housing, for providing early publications,

press releases and studies conducted by the organization

that were otherwise unobtainable.














TABLE OF CONTENTS


CHAPTER PAGE

I. INTRODUCTION . . ... . . . . . 1

II. FEDERAL HOUSING PROGRAMS: GOVERNMENTAL
SUPPORTS FOR SEGREGATION . . . . ... 18

III. CONSEQUENCES AND EFFECTS OF RESIDENTIAL
SEGREGATION . . . . . . . ... 68

IV. THE DIRECT APPROACH TO THE LEGISLATIVE BRANCH:
ATTEMPTS TO DESEGREGATE THE HOUSING PROGRAM
THROUGH CONGRESSIONAL ACTION . . . . 98

V. DISCRIMINATION IN HOUSING AND THE FEDERAL
COURTS . . . . . . . .... . 138

VI. STATE LAWS AGAINST DISCRIMINATION IN PUBLICLY
ASSISTED HOUSING . . . . . . . 196

VII. CONCEPTS OF EXECUTIVE ACTION IN CIVIL RIGHTS,
1945-1962 . . . . . . . . . 239

VIII. PRESIDENT JOHN F. KENNEDY ISSUES AN EXECUTIVE
ORDER . . . . . . . . ... .. 277

IX. ANALYSIS OF PRESIDENT KENNEDY'S EXECUTIVE
ORDER ON EQUAL OPPORTUNITY IN HOUSING:
POSTSCRIPT TO ACTION . . . . . . 306

X. SUMMARY AND CONCLUSION . . . . . ... 329

APPENDICES . . . . . . . . ... . . 347

A. ORGANIZATIONS AFFILIATED WITH THE NATIONAL
COMMITTEE AGAINST DISCRIMINATION IN
HOUSING AS OF JULY, 1962 . . . . ... 348

B. ORGANIZATIONS AS AMICI CURIAE IN RACIAL
COVENANT CASES . . . ... . . . 350

C. SCOREBOARD . . . . . . . . . 351


iii







CHAPTER


PAGE


D. SCOPE OF STATE FAIR HOUSING LAWS COVERING
DISCRIMINATION IN PRIVATE HOUSING . . ... .352

BIBLIOGRAPHY . . . . . . . .. . . 355













CHAPTER I


INTRODUCTION


The Scope of the Study

David Truman has shown that a characteristic feature

of the governmental system in the United States is its "mul-

tiplicity of points of access."l Access can be described as

the fluid relationship that interest groups maintain or seek

with governmental institutions in their quest for decisions

favorable to the group. The American governmental system

provides in abundance the "multiplicity" of access points of

which Truman has spoken. The division of powers between the

levels of governments in the federal system, the separation

of powers, the decentralized character of American political

parties--these and numerous other features of American

government create vantage points for interest groups to seek

or secure privileged access to government.2 Governmental

decisions are the result of effective access to centers of

power by various groups.

Groups of citizens organized to combat racial segre-

gation policies acted in completely characteristic fashion


David B. Truman, The Governmental Process (New
York: Alfred A. Knopf, 1960), p. 507.

2Ibid.





2

to seek out those centers of power in the national government

that could render decisions on housing programs where the

federal government was involved. Study of the activities

and strategies of these groups and their interactions with

each other and with governmental points of access provides

fruitful understandings of the group process.

The efficiency of interest groups often depends on

the strength of other supporting interests, the status of

the groups in American society, the skills of their leader-

ship, and the receptiveness of the branches of government to

the groups themselves. It is not unusual for groups that

are rebuffed by Congress to turn to the federal judiciary,

to the President, or to the political parties for the ren-

dering of favorable policy decisions. Over a period of time,

with alterations in their power and prestige, groups frus-

trated at one time and place need not feel irrevocably de-

feated. Describing policy-making as cyclical in nature,

Donald Blaisdell noted how "it could pass successively through

the legislative, administrative and judicial stages, only to

return to a new starting point and pass again through one or

more of the same three stages."3 Attempts to curb discrimi-

nation in federally assisted housing by Negro and civil

libertarian groups did not take Blaisdell's circular course

but rather followed the successive stages of petitioning the

legislature, the judiciary, and finally the executive branch



3Donald C. Blaisdell, American Democracy Under Pres-
sure (New York: The Ronald Press Company, 1957), p. 261.







of the national government.

Civil rights groups firmly believed that the conse-

quences of racially segregated housing boded ill for the fu-

ture of the American society. They believed, and with jus-

tification, that the federal government had long been an ac-

tive and effective promoter of segregated housing. Exten-

sive consideration is given, therefore, in this study to the

history and background of the federal housing programs and

policies and their contributions to segregated housing. The

consequences and effects of residential segregation patterns,

including private housing industry practices supporting seg-

regation, are considered as background necessary to under-

standing the major part of the work.

The major thrust of this study, however, traces the

efforts of civil rights groups to change effectively govern-

mental housing programs and policies. The study analyzes the

types of groups involved, their choices in tactics, utiliza-

tion of points of governmental access, the obstacles en-

countered, and the strategy leading to President John Fitz-

gerald Kennedy's Executive Order 11063 of November, 1962,

which prohibited racial discrimination in federally aided

housing. As its analytical frame of reference, this study is

based on the different tactics employed by the civil rights

groups as they sought accommodation to the potential access

points available within the governmental system.

The struggle for housing equality posed many choices

of strategy for civil rights groups as access was sought






with legislative, executive, or judicial branches of the

national government. How could the goal best be achieved?

By an executive order? By resort to litigation? By federal

or state statutes? Rebuffed initially by Congress, they were

forced to resort to other access points. What actions should

be taken? The course taken thereafter demonstrates clearly

the thesis that the sensitivity of the housing question

dictated a strategy of continuing accommodation to shifts

occurring in the personnel or philosophy of the other

branches of government.

This study does not pretend to examine all of the

many activities of groups operating on the many battle-

grounds of racial discrimination. The primary focus is on

national public policy dealing with housing discrimination;

though, in order to explain more fully the activity of groups

at the national level, a description is given of the various

state laws and actions taken against racial discrimination in

housing. The basic concern is with national governmental

structure and access to the elements of that structure as it

aided or handicapped Negroes and their allies in achieving

the goal of equal opportunity in housing where federal funds

were involved, for housing on an equal basis is an essential

objective in the drive to change a long-existing pattern of

Negro-white relationships.







The Background of the Problem

The federal government enters housing

When the Eighty-first Congress passed the long-

awaited general housing legislation in 1949, it declared as

its national housing objective: "a decent home and a suitable

living environment for every American."4 The legislation

ended a period of recourse to makeshift housing measures

previously enacted in response to crises like the depression

years of the 1930's and World War II. Since the passage of

the 1949 Act, federal public housing programs have been ex-

panded, urban redevelopment plans have been initiated, and

earlier indirect federal subsidization of private housing

through Federal Housing Administration (FHA) and Veterans

Administration (VA) mortgage insurance legislation has been

enlarged. With its funds and credit facilities, the federal

government has been without question the major force in con-

tributing to the expansion of the housing industry.

Most of the white beneficiaries of these federal pro-

grams have not been hindered in their quest for housing in an

open and competitive market. Minority racial groups were not

so fortunate, however. Federal housing policies and adminis-

trative practices dating back to the depression years saw the

national government become the most effective promoter of

racial exclusion in desirable residential neighborhoods.

Linking the prejudices of private housing operations with the


4Housing Act of 1949, Public Law 171, 81st Congress,
1st Session, 1949.






policies of the federal government, the Commission on Race

and Housing reported in 1958 that housing was the one com-

modity on the American market that Negroes and persons be-

longing to certain other minority groups could not purchase

freely.5 In its analysis, the Commission estimated that the

opportunity of twenty-seven million Americans to live in

neighborhoods of their choice was restricted because of

their race, color, or ethnic attachment.6 The Commission

felt that the federal government had extensively incorporated

into its programs the bias of the private housing market and

supported racial discrimination in housing through the use

of its coercive power.


Housing and the race question

When the United States Commission on Civil Rights

issued its report in 1959, the national goal of "a decent

home and a suitable living environment for every American"

was still a "pledge" that was far from attainment. In its

findings, it reiterated the report of the Commission on Race


Commission on Race and Housing Report, Where Shall
We Live? (Berkeley and Los Angeles: University of California
Press, 1958), p. 1. Hereafter cited as Where ShaZZ We Live?
The Commission on Race and Housing, an independent
citizens' group, was formed in 1955 for the purpose of in-
quiring into problems of residence and housing involving ra-
cial and ethnic minority groups in the United States. Grants
by the Fund for the Republic made its work possible. Chair-
man of the Commission was Earl B. Schwulst, President of the
Bowery Savings Bank of New York. Among the distinguished
members serving on the Commission were Gordon W. Allport,
Elliot V. Bell, Clark Kerr, Henry Luce, and Charles S.
Johnson.


6Ibid., p. 2.






and Housing, pointing out that: "Housing . seems to be

the one commodity in the American market that is not freely

available on equal terms to everyone who can afford to pay."7

In citing the federal government's complicity in housing dis-

crimination, the Commission on Civil Rights emphasized what

scholars on racial segregation had been decrying for many

years--the federal government had imitated the policy of seg-

regation used by private institutions like banks, mortgage

companies, building and loan associations, and real estate

companies.8

Within American cities, the first significance of

residential discrimination is the spreading of slums as the

consequence of the restricted market for Negro housing.9 The

Negro population has always increased at a faster rate than

the living space made available to them. New areas that are

opened up to Negro residence become overcrowded by conversion



7U. S. Commission on Civil Rights, Report (Washing-
ton: U. S. Government Printing Office, 1959), p. 534. Here-
after cited as 1959 Report. This same phrase was used in 1961
when the Commission issued its second report. See U. S. Com-
mission on Civil Rights, Report, Housing (Washington: U. S.
Government Printing Office, 1961), Book IV, p. 145. Here-
after cited as Housing Report.

Gunnar Myrdal, An American Dilemma (New York: Harper
and Brothers Publishers, 1944), p. 349. See also Robert C.
Weaver, The Negro Ghetto (New York: Harcourt, Brace and Com-
pany, 1948), pp. 70-92; Charles Abrams, Forbidden Neighbors
(New York: Harper and Brothers, 1955), pp. 227-243. Here-
after cited as Forbidden Neighbors.

Morton Grodzins, "Metropolitan Segregation," Scien-
tific American, XCVII, No. 4 (October, 1957), 33-34. See
Grodzins, The Metropolitan Area as a Racial Problem (Pitts-
burgh: University of Pittsburgh Press, 1958), passim.






of one-family houses to multiple dwellings and by squeezing

two or more Negro families into apartments formerly occupied

by a single white dweller. Housing occupied by Negroes is

more expensive, more crowded, and more dilapidated than

housing occupied by whites with equivalent incomes. With the

growth of outlying suburban areas beyond the central core of

the cities, restrictions have kept the vast majority of

Negroes concentrated in an institutionalized racial pattern.

Robert C. Weaver described this pattern in 1948 when he re-

ported:

The modern American ghetto is a Black Belt from which
the occupants can escape only if they move into another
well defined Negro community. . This ghetto has
income and social classes. Its inhabitants are better
prepared and more anxious than ever before to enter the
mainstream of American life. Residential segregation,
more than any other single institution, is an impedi-
ment to their realization of this American Dream.10

No part of the United States is free of housing dis-

crimination. Whether it be the East, West, South or North,

large or small cities, wherever Negroes are found, exclusion

is almost universal. Whatever their ability to pay, they

often find it impossible to obtain homes which meet minimum

standards of health, safety and decency.11



10Weaver, op. cit., p. 7.

1Donald 0. Cogwill, "Trends in Residential Segrega-
tion of Non-whites in American Cities, 1940-1950," American
Sociological Review, XXI, No. 2 (February, 1956), 43-47. In
his analysis, Cogwill concluded that the segregation of Ne-
groes increased in over two-thirds of 185 cities studied. In
some small-and medium-sized cities, where a clear separation
of the races never before existed, there began to appear for
the first time Negro "ghettos" of substantial size.







Paradoxically, residential segregation has increased

since World War II, a time when institutionalized racial pre-

judice and discrimination showed signs of weakening. After

World War II, measures undertaken by the national and state

governments began to weaken the system. Many significant

changes altered previous existing racial patterns. Employ-

ment opportunities were widened. Governmental facilities and

public accommodations were opened for the Negroes' use. The

armed forces were desegregated. Finally, public schools were

to be legally desegregated with the Supreme Court decision

in Brown v. Board of Education in 1954.12

However, victories in these civil rights areas have

been weakened with the growth and concentration of segregated

residential districts. Because of residential restrictions,

other forms of racial discrimination have been generated.

Community practices intended to ensure, augment, or facili-

tate residential segregation have affected employment, schools,

and the use of public facilities.13

Victories, gained over the years by Negroes and their

allies in attacks upon selected targets, have been offset by

the social consequences that are rooted in the system of

housing segregation. Legal battles for constitutional rights

were won, yet these rights often had little practical meaning

for the majority of American Negroes. The entry of a few



12347 U. S. 483 (1954).

1Dennis Clark, The Ghetto Game: Racial Conflicts in
the City (New York: Sheed and Ward, 1962), p. 10.




10

Negro school children into an all-white Little Rock or Atlan-

ta high school was an important victory for the fundamental

principle, but it did not carry any immediate hone for "elro

children who would continue to attend the still se-- ,gated

schools of the South and the slum-ridden schools of the

North.

Because of the Negro's inability to move outside of

the barriers erected 1Tainst him in the cities, the patterns

of de facto segregation remained the same. To break thr h

the li- cycle of "inherited" iverty, observers have -inted

out that only a massive assault n' n the '.- -ro's inferior

educational system will reme this dilemma.14 Michael

Harrington has pointed to resi '- itial s relation as the

crucial factor in this abject inheritance, saying,

Housing is perhaps the most crucial element in racial
poverty. As long as N. -":e and other minorities are
segregated into nei-,' ': _-.Js, the i--1act of all civil
rights legislation is softened. It is -issible to have
a public policy for integrated school *., but if the
school districts are themselves a product of residential
discrimination, the schools will continue to be Jim
Crow.15


Far!i histo-y Au t'l" unsi'. .ttl- t1.- "' cc

"- ro leaders have long been well aware of the '.e-

meral nature of civil rights victories in the courts unless



14James B. Conant, Slums and Sub s (New York:
c raw-Hill, 1962), p. 27. t also Josen' P. Lyford, "Pro-
posal for a evolution, Part I," Saturfi- :view, XLVI, 1o.
42 (October 19, 1963), 22.

15Michael Harrington, The *her America: Povert" in
the :ited States (:'.' York: Mac"'illan C.- any, 1 3), p. 79.






accompanied by breakthroughs in existing housing patterns.

The National Association for the Advancement of Colored People

had not been in existence more than two years when in 1911 it

began to attack ordinances that zoned Kansas City into white

and Negro districts.16 Subsequently, a test case reached the

United States Supreme Court in 1917 relating to similar ordi-

nances in Louisville, Kentucky. The Court declared racial

zoning ordinances unconstitutional, saying that

The Fourteenth Amendment was designed to assure to the
colored race the enjoyment of all the civil rights . .
and to give to that race the protection of the general
government in that enjoyment whenever it should be denied
by the states.17

This decision by the court had rendered an important

opinion striking down municipal ordinances which zoned resi-

dential areas on the basis of race or color. But as the

National Association for the Advancement of Colored People

was to discover, it did not portend any lasting gains in

breaking down residential segregation. Only a few southern

cities had passed such ordinances. Other devices, more so-

phisticated in practice though just as arbitrary, proved to

be the real obstacles to an open housing market.

Litigation alone could not break down the housing

barriers. The difficulties of fighting the system through

legal means were immense. Not only were lawsuits costly and


16Langston Hughes, Fight for Freedom: The Story of
the National Association for the Advancement of Colored People
(New York: W. W. Norton and Company, Inc., 1962), pp. 117-122.

17Buchanan v. Warley, 245 U. S. 60 (1917).






time consuming, but the nature of legal processes and the

federal system worked against anything less than token gains.

Unless the Negro could develop some leverage on the "power

structure" resistant to their aspirations, any drive for

equality would be blunted, if not ineffective.


Early Power Structure and Housing Rights

Of those elements of the "power structure" in Ameri-

can life--government, banks, industry, labor unions, news-

paper, and the communications media--Negroes had leverage

only in one, government. And prior to World War II, Negroes

had little leverage even with government. Political power was

won, or to be won, by translating the growth of the Negro

northern population into solid blocs that could swing state-

wide elections. By exploiting this strength, Negro leaders

began to insist that government regulate elements of the

"power structure," both public and private.18 Negro leaders

proposed that government make concerted regulatory efforts in

all areas where positive government policies could contribute

to ending racial discrimination.


Political pressure supplements litigation

It is difficult to isolate the first instance of suc-

cessful Negro pressure, as such, on government. While the


18
1Theodore H. White, "Power Structure, Integration,
Militancy, Freedom Now," Life, LV, No. 5 (November 29, 1963),
82. For an early account of the rising Negro vote see Henry
Lee Moon, BaZance of Power: The Negro Vote (Garden City,
New York: Doubleday, 1948), passim.






National Association for the Advancement of Colored People

joined the American Federation of Labor in successfully pro-

testing President Hoover's nomination of Judge John J. Parker

to fill a vacancy on the United States Supreme Court, there

is no indication that Negro pressure was of consequence when

the appointment was blocked.19 In 1941, A. Philip Randolph

formed a March-on-Washington Committee which threatened a

mass march on the nation's capital unless federal action

opened employment opportunities to Negroes in defense indus-

tries. This caused President Roosevelt to issue an Executive

Order creating a Committee on Fair Employment Practice which

succeeded to some degree in curbing discrimination in the

hiring practices of these industries.20


General Negro gains

However, the first comprehensive gain made by the Ne-

groes in civil rights came in December, 1946. President Tru-

man appointed a Committee on Civil Rights, and a year later

he urged the Congress to enact the Committee's recommenda-


19David Truman, op. cit., p. 492.

2Executive Order No. 8802, 6 Fed. Reg. 3109 (1941).
President Roosevelt's power to issue the executive order
creating the Committee which investigated discriminatory
employment practices in defense industries was uncontested.
Since the government may contract for goods and services with
private industries, it may do so on its own terms. The na-
ture and extent of defense needs made the order significant
and set a precedent for the creation of similar committees
under Presidents Truman, Eisenhower, and Kennedy.






tions.21 Although the Congress failed to act on the recom-

mendations, the Committee's report, To Secure These Rights,

was widely acclaimed. Included in the report was a descrip-

tion of segregated housing practices. The Committee recom-

mended that Congress condition all federal grants-in-aid and

other forms of federal assistance on the absence of racial

or religious segregation or discrimination.22 Now with an

official report branding racial segregation in housing, Ne-

gro and other civil libertarian groups began to seek the

means whereby government would implement the details of To

Secure These Rights.


Pressure resumes

After World War II a large number of organizations

came into existence seeking to lessen group prejudice and

discrimination and to promote equal rights and opportunity

in housing. Some of these organizations had been long es-

tablished; others were formed after World War II specifically

to fight segregation in housing.23 Such an organization, to

take but one example, was the National Committee Against

Discrimination in Housing, expressly formed in 1950 to act

as a clearing house in the struggle to eliminate racial and


21President's Committee on Civil Rights, The Report,
To Secure These Rights (New York: Simon and Schuster, 1947),
pp. 67-70.
221bid., p. 166.

23Where Shall We Live?, p. 54.







religious restrictions from the nation's housing market.24

There was clear recognition by all concerned that

only government and law could be directly effective on a

large scale in reducing or eliminating discriminatory hous-

ing practices. Strong sustained pressure from organized

groups would be necessary to spur the federal government

into action.


Pressure for Executive Order

The road to fulfillment was long, tedious and diffi-

cult. From 1945 to 1962 congressional action proved fruit-

less,while judicial pronouncements were piecemeal. Leaders

eventually determined that the route for a favorable deci-

sion lay in the hands of the President. Throughout the

1950's, pressure by anti-discrimination groups was brought

to bear on the President to issue an executive order to

bring about a climate of equal opportunities for Negroes in

the federal housing program. This strategy was partially

realized on November 20, 1962, when President Kennedy issued

Executive Order 11063 prohibiting discrimination in federally

assisted housing.25


24By 1962, thirty-seven organizations were affiliated
with the National Committee Against Discrimination in Housing.
For a list of member organizations see Appendix C.
25U. S. Housing and Home Finance Agency, Executive
Order 11063, Equal Opportunity in Housing (Washington: U. S.
Government Printing Office, November 24, 1962).







Functioning of Pressure
Process in the
Housing Battle

The organizations that worked for equal opportuni-

ties in housing faced obstacles common to all groups working

for minority rights. Organized groups dedicated to racial

equality were not powerful politically, operated on limited

funds, and placed heavy reliance on volunteer, unpaid ser-

vices to carry on their activities. Yet with all their weak-

nesses, these groups supplied a major part of the stimulus

and leadership necessary for the advances made toward ra-

cial equality. Unsuccessful in their legislative campaigns

on the federal level in the passage of statutory law to

eliminate discriminating housing codes, they supplied much

of the pressure leading to the abandonment in 1950 of the

FHA's one-time discriminatory policies sanctioning racially

restrictive covenants.26 In northern and western states,

they were responsible for the passage of legislation miti-

gating long-standing restricted housing practices in these


26The case of Shelley v. Kraemer, 334 U. S. 1 (1948),
had knocked out the legal props of racially restrictive
covenants. Aiding the National Association for the Advance-
ment of Colored People in the case were many civil rights
groups who presented amioi ouriae briefs to the court. How-
ever, the FHA did not move until it was prodded by the Truman
Administration to align itself with the Court's decision. In
December, 1949, the Agency announced it would not finance any
property subjected to racially restrictive clauses after
February, 1950.







areas.27 Through litigation, the National Association for

the Advancement of Colored People succeeded in winning a

series of notable victories in the federal and state courts.

In their quest for an executive order, they sought

a comprehensive decision to end governmental activities that

fostered involuntary segregation in the field of housing.

They sought a new national ethic, a standard whereby the

doctrine of "separate but equal," declared unconstitutional

by the Supreme Court, would be meaningfully ended. Only by

curbing enforced residential segregation would the Negro be

allowed to take his place in the mainstream of American

life. As pointed out by Eli Ginzberg, in his book, The

Negro Potential:

It must be recognized that the Negro cannot suddenly
take his proper place among whites in the adult world
if he has never lived, played, and studied with them
in childhood and young adulthood. Any type of segre-
gation handicaps a person's preparation for work and
life. . Only when Negro and white families can
live together as neighbors . will the Negro grow
up pr perly prepared for his place in the world of
work.29


27By 1963, according to Trends in Housing, a bi-
monthly published by the National Committee Against Discrimi-
nation in Housing, 26 governmental jurisdictions had adopted
fair housing statutes affecting private housing: 13 states,
12 cities and the Virgin Islands. In addition, there were
17 states and 60 cities that had fair housing laws affecting
discrimination in public and publicly assisted housing.
Trends in Housing, VII, No. 5 (September-October, 1963), 1, 7.
28Eli Ginzberg, The Negro Potential (New York:
Columbia University Press, 1956), pp. 114-115.












CHAPTER II


FEDERAL HOUSING PROGRAMS: GOVERNMENTAL
SUPPORTS FOR SEGREGATION


Course I don't want to make it sound fancier than it
is. . It's just a plain little old house--but it's
made good and solid--and it will be ours. Walter Lee--
it makes a difference in a man when he can walk on
floors that belong to him. . .1

Mama Younger

It is one thing when private tenants, property owners,
and financial institutions maintain and extend patterns
of racial segregation in housing. It is quite another
matter when a Federal agency chooses to side with the
segregationists.2

Gunnar Myrdal


The History and Background of Federal
Approaches to Housing

The federal government's first entry into the problem of

housing dates back to 1892 when Congress provided $20,000

for the investigation of the slums in cities having 200,000

or more people.3 No constructive action came out of this


1Lorraine Hansberry, A Raisin in the Sun (New York:
Random House, 1959), p. 84.

2Myrdal, op. oit., p. 349.

3U. S., Congress, Senate, Committee on Banking and
Currency, Federal Housing Programs: A Chronology and Brief
Summary of Congressional and Executive Action Affecting
Housing from 1892 to October 25, 1949, 81st Congress, 2nd
Session, 1949, p. 2. Hereafter cited as Federal Housing
Programs.





19

legislation but the investigation, not surprisingly, did indi-

cate the existence of slums and their related problems. The

report noted a concerted movement of Negroes to the cities

in large numbers. By 1890, one-fifth of the 7,500,000 Ne-

groes in the United States lived in urban areas; their hous-

ing problems had been compounded by urban living but these

were not deemed worthy of congressional notice.4

Thereafter, Congress did nothing positive in the

field of housing until the exigencies of World War I re-

sulted in legislation providing housing for shipyard workers

and war workers.5 These programs were to be administered by

the United States Housing Corporation, a short-lived Agency

which was in operation only 109 days. The uneasiness of the

federal government in building and operating housing units

quickly resulted in the sale of these units to private

owners after the war.6

It was only with the economic crisis of the depres-

sion of the 1930's that Congress again passed any housing

legislation. Federal action to ease the burden of the emer-

gency was to be far different from the piecemeal measures

taken during World War I. From the depression years down to

the present day, the federal government, through its mort-

gage credit aids, public housing, and slum clearance pro-


Housing Report, p. 9.

Federal Housing Programs, p. 2.
Housing Report, p. 11.






grams, '. 'an to exercise a large measure of control over

housing built in the nation,

Housing leislatio t e 19 ss th

cr o of as L

rd ( ) in 1932, th e rs L Coora

( in 1933, te A 1t al ation

Mortg. e ssocian ( ) in 13 u of

ing was considered on of the road cat ris o

riin easur o al e se r

aFfected by the depressiel were he eowners Farners, fnr

tenants sludwellrs, orga -le rs, and cities e



revive t strcti i t e ender to f

nane s al airs nd i e ouses ad fs,8
t air ir

t

these we ints in he and were not intend t





toedito ublic using as it nw bean Oide :e
die ly te un rivil ed at nts t could ff

e lic % 0 A'ministration ( ") c~ade loans and to ocal aencis to uild low-nal iit durin te e

st ;s of te economic crisis n 7 the nie t

i~ofsinq & theri ( ] Ai ) aS estaAlisbed to ta~e r t"







federal public housing program and was designed to meet low-

rental needs at the local levels.

Since the 1930's, the federal housing program has

been enlarged and expanded. The Housing Act of 1949 not only

drew up national goals for the federal government in this

portion of the nation's economy but called for greater na-

tional expenditures in building more public housing. It

also provided federal aid and set down regulations for urban

renewal or redevelopment projects by private interests.9 In

subsequent years, Congress has extended the 1949 program

culminating in the passage of an omnibus law in 1961 during

the first year of the Kennedy administration. From its in-

volvement as a spur to the moribund economy of the depression,

the federal government became more than just an interested

by-stander on questions of home finance and providing roofs

over the heads of low-income families. It now played an

active and direct role in refining, reshaping, and elabora-

ting upon the nation's housing industry.10


Federal Supports for
Housing Segregation

The portion of the federal depression recovery pro-

gram devoted to housing endeavored primarily to alleviate

and correct economic imbalance, not social inequalities. Al-

though the general aim was economic recovery when the federal


9jack Greenberg, Race ReZations and American Law
(New York: Columbia University Press, 1959), p. 286.

0Housing Report, p. 15.




22

government entered the housing scene, it was immediately con-

fronted with the problem of racial discrimination, a problem

that has recurred, grown, and since then persisted. By the

1930's marked trends had developed in relation to Negro

housing throughout the United States. There was a continu-

ing concentration of Negroes in well-defined areas in all

parts of the country. At the same time, Negro residents in

northern cities were slowly expanding into new residential

areas even against the overt pressure placed in their

paths.1l According to Robert C. Weaver, this was the period

when stereotyped opinions related to Negroes and residential

areas began to be formed by the white community, that is, the

oft-repeated generality that Negro occupancy ultimately leads

to the physical deterioration of housing units. It was true

that many Negro areas became extended slums. This was the

end result but what was overlooked were the causes that had

brought this to pass. As Weaver pointed out:

The combined forces of too little space, too few dwelling
units, increasing pressure of new arrivals, general low
incomes and disproportionately large declines in the
earning of those in upper income brackets modified the
anatomy of the Negro coi1munity.12

The problem of supply and demand, complicated by the

color question, required Negroes to seek housing wherever


11The first comprehensive government analysis con-
cerning the problems of housing for Negroes occurred under
President Hoover in 1931. U. S. President, Conference on
Home Building and Home Ownership, Report of the President's
Conference on Home Building and Home Ownership (Washington:
U. S. Government Printing Office, 1931).
12Weaver, op. oit., p. 68.







it was available to them. The paths taken were the slow

encroachment of Negroes to fringe areas beyond the "Black

Ghetto" (lines determined by the greater white community) or

by increasing the density of Negro neighborhoods that were

already overcrowded because of too little space and too many

people. A solution to the problem was a mass "doubling up"

of the populace. The concomitant aspects were the proli-

feration of slums, high rents charged for scarce housing, and

substandard living conditions for those forced to live in

such an environment.

These economic and social facts, compounded by the

utilization of racial restrictive covenants and the general

attitude that Negroes should not enter new neighborhoods,

had by the 1930's strengthened residential segregation. Each

new influx of Negroes to northern urban areas proliferated

the nation's growing "Black Ghettos." The federal govern-

ment was faced with the problem of what standards to follow

in its influential role of underwriting housing operations.

Negro ghettos had largely arisen due to the practices of the

private housing industry. With its expanded housing acti-

vities, the federal government was faced with the difficult

and perplexing problem of tackling racial discrimination.

Should the federal government detach itself from the prac-

tices and ethics of the private housing industry or should

it follow the principles of the Bill of Rights and the Fifth

and Fourteenth Amendments? Did governmental undertakings in

housing programs demand a higher public morality, the test of





24

the color-blind, ethical government intended by the Constitu-

tion, or the standards utilized by the private entrepreneur?13

The federal approach to this problem was evasive. In

the initial stages of the various housing programs that began

in 1933, the federal government allied itself with the prin-

ciples and standards of the private housing industry. Ac-

cording to the Housing Report of the United States Commission

on Civil Rights, federal policy in the housing field reflected

and even magnified the attitude of private industry.14 The

patterns and attitudes toward racial discrimination were im-

bedded in the early stages of the housing program and were

maintained for the next three decades. Governmental policy

in public housing projects built with federal aid and monies

was one of equivocation. Once erected, they followed the


13
Forbidden Neighbors, p. 228. As of 1964, the
"moral" dilemma facing the federal government in the late
1930's and early 1940's as far as Negro enjoyment of the
housing programs was concerned, would not happen. Prior to
the ShelZey v. Kraemer (1948) and Brown v. Board of Education
(1954) cases, the federal government was following the ac-
cepted constitutional practice, that is, the narrow interpre-
tation given to the Fifth and Fourteenth Amendments. In this
period, the nation was not "civil rights conscious." There-
fore, the role of the federal government took the form of
encouragement and assistance to the private housing industry
with as few restrictions as possible. Federal housing agen-
cies in drawing up standards, did not set requirements at
variance with accepted business practices or local customs.
To require that the benefits of government housing programs
be made available on an equal basis would bring the agencies
in conflict with the practice of racial discrimination in
the building and real estate industries. Since there was no
legislative guidance or direction provided by the President,
the federal housing agencies were not willing to change the
status quo.

14Housing Report, p. 16.




25

neighborhood patterns,which usually meant segregation. Little

effort was made to create new mixed patterns even when there

was a favorable environment.15

The policies of the FHA sanctioned racial discrimina-

tion and actively promoted and encouraged it as well. In the

case of the FHA, the federal government in its relationship

to home builders and lenders could have sought compliance to

a nondiscrimination policy. Instead, it patterned its poli-

cies, as Charles Abrams, noted housing and planning expert,

has pointed out, along the lines of a "racial policy that

could well have been culled from the Nuremberg laws."16

In terms of its indirect and direct support of segre-

gation in this manner, the federal government had given moral

sanction to the discriminatory practices of private business.

Its increased activity in the housing sphere had made possible

the emergence of the large-scale builder, federal insurance

systems, the rise of vast suburban subdivisions, long-term

credit and low down payments, and extensive slum clearance

and redevelopment within our cities. All such measures were

beneficial to private business. As authors Frances Levenson

and Margaret Fisher have indicated:

In no other aspect of national life has the federal
government given more aid, exercised more controls, and
brought about more changes than in the field of housing.
Those enormous undertakings have been supported, of
course, by taxes imposed on all alike. Yet their bene-
fits have been largely denied to more than twenty million


15Forbidden Neighbors, p. 229.
16Ibid.





26

Negro Americans and to members of certain other minority
groups.17

Thus, compounding private business practices with

governmental practices, residential segregation continued

to grow and grow. Failing as a source of moral as well as

legal authority, the federal government continued to foster

racial discrimination in housing. Summarizing this situa-

tion, the Commission on Race and Housing in 1958 could

readily state that "if the government sees nothing wrong in

racial discrimination, how can private persons be censured

for practicing it?"18

It should be pointed out that these policies were

not carried out with insidiousness and malice and fore-

thought. Government programs related to housing were ori-

ginally designed for homeowner relief and to stimulate the

private housing industry. They were not blueprints for
"social engineering" or breaking down the social barriers in

housing. Once the housing programs got underway, however,

it was evident that the unique adoption of discriminatory

policies on the part of the newly created public agencies

would be maintained in the absence of a clear-cut, overt

pronouncement by the President or the Congress undercutting

or eliminating such practices.


17Frances Levenson and Margaret Fisher, "The Strug-
gle for Open Housing," The Progressive, XXVI, No. 12 (Decem-
ber, 1962), 26.
18here Sha We Live?, p. 32.
Where Shall We Live?, p. 32.






When the new housing laws went into effect, the ad-

ministrators of the agencies were generally staffed with ex-

perts from private housing fields where discrimination was an

operative business practice.19 The newly created public

agencies then carried the private housing industry's ethic

into the public housing programs. Since administrators were

primarily concerned with the nation's credit machinery and

the creation of business volume and financial success for

their agencies, very little attention was paid to ensuring

equality in the housing market. Administrators did not fight

for racial desegregation or for open or equal opportunity

housing for Negroes and minority groups. They followed the

path of least resistance, the ethos of real estate and busi-

ness interest groups, which of course did not lead to ex-

perimentation in breaking down residential segregation.

David Truman has indicated that government regula-

tory agencies increasingly take on the complexion of those

they presumably regulate. In describing the direct access

of interest groups to the administrative process, he noted

that policy-determining administrative boards and commissions

are often staffed with an eye to the group memberships of

the appointees. le has stated that:

. this policy may be a matter of statutory
requirements that more or less severely restrict se-
lections to the members of particular interest groups.
More often it is a reflection of group access to the



19Housing Report, p. 29.







appointing authority.20

The administrators then come to their positions with

group affiliations and preferences. This conditioning is

likely to be maintained during their period of government em-

ployment. In some agencies the formal interest group member-

ships of leading administrative officials can be interpreted

as having an important effect upon the access of groups.21

The experience of the federal housing agencies has borne this

out.22

In addition to the professional bias that has resul-

ted in discrimination against Negroes in federal housing pro-

grams, a number of other factors have operated to vitiate the

possibility of social equality in the housing market. Cen-

tral to any public agency is its desire to create an increased

volume of business. This was particularly true of the FHA,

FILBB, the VA and the Urban Renewal Administration (URA).



2Truman, op. cit., p. 452.

21Ibid., p. 451.
22Two comparatively recent examples help to bear this
out. When President Eisenhower selected Albert M. Cole as
the Administrator of the Housing and Home Finance Agency in
1953, advocates of public housing felt that his appointment
meant the curtailment or even the death of this program.
Cole, as a Congressman, had repeatedly voted against any
public housing programs and was accused of being the chief
spokesman of the real estate lobby in the House of Represen-
tatives by liberal groups. The appointment of Robert C.
Weaver to this same post by President Kennedy in 1961 was in-
terpreted as the furnishing of access to public housing and
"open occupancy" interest groups. Weaver had long espoused
both policies. His appointment was opposed by real estate
groups and their business allies.






In the case of the FHA, the Agency must get enough housing

insurance business to make its actuarial formulas work.23

Therefore, it hesitated to condition its aid to builders

upon nondiscrimination,fearing that to do so would endanger

the volume of housing sales. This, too, had long been the

catchphrase of real estate men, home builders and credit

agencies in discouraging the idea of mixed racial residen-

tial neighborhoods, that is, prospective white clients

would refuse to buy into such housing enclaves.

Another factor is that governmental agencies become

dependent upon pressure groups for their support in Con-

gress.24 In Washington, the governmental agencies afforded

larger operating budgets and perquisites by Congress are

those that are backed by strong private lobbies. Certainly,

the real estate lobby, home builders, and the savings and

loan associations have had an easier entree to Congress than

civil libertarian groups seeking to desegregate the housing

programs. Agency officials are more prone to give a sympa-

thetic ear to the pressures and prejudices of beneficiaries

who also function as their benefactors in the legislative

bodies.25

Finally, the political power of the South in Congress

impeded any attempt to change existing segregation practices

in housing. Racial ghettos are less pronounced in the South


23Forbidden Neighbors, p. 240.

24Truman, op. cit., p. 442.

25Forbidden Neighbors, p. 240.







than in the North, but the southern bloc in Congress has re-

mained adamant against any proposal that might result in the

mixing of the races.26 Few housing administrators were

willing to arouse the enmity of powerful legislators who are

positioned strategically in the congressional power structure

and could frustrate their existing and future programs.27

Federal regulations that banned residential segregation would

meet with bitter opposition from the southern bloc. Housing

agencies sought to formulate rules that would be acceptable

and uniformly applicable throughout the nation. By doing so,

they enhanced their ability to gain maximum congressional

support. Therefore, segregated practices as followed by the

southern states then tended to become the common denominator


26Ibid.

27Since the congressional system works to the advan-
tage of men with seniority, southern Congressmen chair more
than one-half of the standing committees in both houses. In
the 88th Congress, 1st Session, southerners held the chair-
manships of ten of the sixteen standing committees in the
Senate while in the House they held eleven of the twenty.
See U. S., Congressional Directory, 88th Congress, 1st Ses-
sion (Washington: U. S. Government Printing Office, 1963),
pp. 239-243; 251-259.
The housing program and the agencies concerned with
housing legislation come under the jurisdiction of the House
and Senate Banking and Currency committees and their sub-
committees. In 1964, the Senate parent committee was chaired
by A. Willis Robertson of Virginia who succeeded Burnet R.
Maybank, South Carolina, after his death in 1955. The chair-
man of its subcommittee on housing was John Sparkman of Ala-
bama. In the House, two southerners have long controlled the
fate of housing legislation: Wright Patman of Texas, Chairman
of the House Banking and Currency Committee and Albert Rains
of Alabama for many years had chaired its subcommittee on
housing.







in the nation's racial housing policy.28


The Programs and Policies of Federal Housing
Agencies: The Scope of Federal Involvement

After President Truman had urged the reorganization

of the federal housing agencies, Congress, in July, 1947, es-

tablished the Housing and Home Finance Agency (HHFA). The

Agency was to operate as a single unit for the principal

housing programs and functions of the federal government. It

was created to provide general supervision and coordination

of its constituent units: the FHA, the Public Housing Adminis-

tration (PHA), and the URA.29 In addition, the Administrator

of the HHFA served as the Chairman of the National Voluntary

Mortgage Credit Extension Committee which directed the af-

fairs of the Voluntary Home Mortgage Credit Program (VHMCP)

and Chairman of the Board of Directors of the Federal Na-

tional Mortgage Association (FNMA). He also was directly

responsible for approving programs of communities that sought

assistance from the URA.30 In sum, the IHHFA was to deal with

the federal housing programs as a whole, to assess the needs

of the nation, and to recommend constructive steps to meet

these needs.31

Each of these programs will be discussed separately.



8Forbidden Neighbors, p. 240.
29
91959 Report, p. 457.

30Ibid.

31Ibid., pp. 457-458.







Greater stress will be placed on the federal mortgage insur-

ance and guaranty programs because in these areas the princi-

ples followed by the FHA and the VA were most pervasive in

imposing residential segregation by administrative fiat.

The role of the FHA and the nation's housing market became

intertwined after its operations became clear. Since the

FHA's creation in 1934, the federal government became the

most important factor in the housing market, prompting the

authors of a Fortune article in February, 1954, to comment:

The overwhelming fact is that Government guaranty of
mortgages . has done more than anything else to make
possible a million or more new houses a year. If people
had to pay 20 to 30 per cent down, as they do on some
uninsured mortgages, millions never would have bought
houses. And because Government-guaranteed mortgages
have proved ideal investments for banks, insurance com-
panies, and similar institutions mortgage money now
flows freely across state lines.32


Federal Housing Authority (FHA)

The National Housing Act of 1934 established the

FHA. Its original aim was to encourage improvement in hous-

ing standards and conditions, to provide an adequate home fi-

nancing system, and to exert a stabilizing influence on the

residential mortgage market.33 Agencies such as the Federal

Home Loan Bank System (FHLBS), created in 1932 to serve as a


32Gilbert Burck and Sanford S. Parker, "The Insa-
tiable Market for Housing," Fortune, XLIX, No. 2 (February,
1954), 218.

33U. S., Congress, House, Subcommittee on Housing of
the Committee on Banking and Currency, Investigation of Hous-
ing, 1955, H. Res. 203, Part I, 84th Congress, 1st Session,
1955, p. 543. Hereafter cited as Investigation of Housing,
1955.







reserve credit pool exclusively for home financing institu-

tions, and the HOLC, established in 1933 to refinance mort-

gage and interest rates for home owners, placed their empha-

sis on restoring public confidence in the nation's financial

institutions. Their efforts to a large extent succeeded and

paved the way for a resumption of lending activity.34 Con-

gress, in passing the National Housing Act of 1934, devised

a new method to encourage housing construction and to increase

the supply of funds for new lending through the new and inde-

pendent agency, the FHA. Used at first to aid a sick con-

struction industry, it has since been utilized for many pur-

poses. Initially, a "pump-priming" device of the depression

years, it then served to meet other national emergencies

such as mobilization, war, and demobilization. The FHA has

been a prime instrument to relate housing production with

national needs and to implement broad social purposes of the

federal government.35

In terms of long-range policies, the FHA was the

most important of all housing credit agencies. Its many

contributions are so well known that its principal programs

need not be mentioned here.36 The FHA has largely deter-

mined where housing shall be built, for whom, at what price,

the character of construction, and the methods of financing.


34
Housing Report, pp. 12-13.

351959 Report, pp. 461-462.

36For a detailed description of its coverage and
scope see: 48 Stat. 246 (1934) and 12 U. S. C. sec. 1702
(1958).






Its influence has been so pervasive that conventionally fi-

nanced building has been inevitably affected by its prac-

tices. FIIA standards, even though substantively minimal,

have become the norm for the real estate market. Broadly

stated, it offered mortgage insurance to lenders who financed

the purchase of housing, provided the housing and the mort-

gagee complied with certain statutory and administrative

requirements.

Under the system, the following three groups were

benefited by FHA's policies: mortgagees, purchasers of homes,

and builders.37 The mortgagees were benefited by being pro-

tected against the risk of any loss on the mortgage loan.

Purchasers were able to finance their homes on terms more

favorable than those which they could secure under conven-

tional financing. Builders were the recipients of an ex-

panded housing market as the result of the financial advan-

tages they could offer potential purchasers. In general it

may be said that no other agency of the federal government

has had as great an effect on shaping the character and ap-

pearance of American communities, especially the suburban

communities.

The problem of residential segregation was not ig-

nored by the FHA. From its earliest years, housing patterns

figured in its policies to the extent that the Agency en-



37Comment, "Builder of FIHA Housing Held Barred From
Discriminating Against Purchasers on Basis of Race: Possible
Sources of Federal Prohibition and Basis for Cause of Ac-
tion," Columbia Law Review, LIX (1959), 782.







courage racial discrimination. Many benefits of the FHA

program were not available to minority groups on equal

terms.38 Until the aftermath of Shelley v. Kraemer39 in

1948, described later in judicial context, the FHA officially

placed the weight of the federal government against open oc-

cupancy of housing for all citizens regardless of their race.

The policy directives of the FI1A were contained in rules,

regulations, Agency letters issued from time to time, and its

Underwriting Manual. The FHA's Underwriting Manual contained

the criteria in judging eligibility for Agency benefits. It

was designed to guide and aid both its staff and those who

would make use of its aid. Until 1947, the Underwriting

Manual warned against insuring property not protected from

adverse influences such as "inharmonious" racial groups and

declared it necessary to the stability of neighborhoods that

properties shall continue to be occupied by the same social

and racial classes.40 It offered a model racial restrictive

covenant to insure communities against "adverse influences"

and recommended the inclusion of such covenants in all


38
Eunice and George Grier, Discrimination in Housina:
A Handbook of Fact (New York: Anti-Defamation League of B'nai
B'rith, 1960), p. 16.

39334 U. S. 1 (1948).
40
1959 Report, p. 464.





36

contracts of sale.41 Under this policy the FHA would not in-

sure inter-racial projects or Negro developments in other than

all-Negro neighborhoods.

Negroes gained very little new housing under this

program. The FHA, stressing the development of suburban com-

munities, deprived Negroes of moving to the outlying areas

through the use of the restrictive covenants. If Negroes

wanted to participate in this mortgage insurance program,

they had to seek out vacant areas in the Black Belts from

which they had originally sought to leave. Here, however,

the lack of adequate land left prospective purchasers only

older housing to turn to. Housing of this type invariably

failed to meet the FHA neighborhood requirements and appli-

cants, because of these strictures, were refused the right

to participate in the program. Even those who could afford

to build new homes were stymied by FHA's policies. Accord-

ing to Robert C. Weaver:

FHA's chief contribution to Negroes was to complicate
the ultimate solution of their housing problem. . .
By failing to permit or promote Negro participation,
while facilitating the augmentation of the total supply
of new housing, it contributed greatly to widening the
gap between the living conditions of whites and Ne-
groes. . But the most objectionable feature of
FHA operations was its acceptance and championing of
race restrictive covenants. This was probably inevi-
table once the government had turned the agency's



41The 1938 Underwriting Manual urged the use of a
model covenant which provided that "no persons of any race
other than [race to be inserted] shall use or oc-
cupy any building or any lot, except that this covenant
shall not prevent occupancy by domestic servants of a dif-
ferent race domiciled with an owner or tenant." Quoted in
Forbidden Neighbors, p. 230.






operations over to the real estate and home finance
boys.42

Weaver was not subjecting himself to hyperbole,since

the FHA had accepted the prejudices of the trade association

of real estate brokers, the National Association of Real Es-

tate Boards (NAREB). The Code of Ethics of the NAREB sanc-

tioned a policy of racial discrimination. Member realtors

were beholden to follow it. If they did not, they were sub-

ject to discipline by their local real estate boards. This

usually meant being dropped from the local board membership.

Essentially, the Code served as an imprimatur, directing

that no realtor could be instrumental in introducing into a

neighborhood members of any race or nationality whose pres-

ence might be detrimental to property values in that neigh-

borhood.43 This same ethos prevailed in the FLHA and it

prompted Weaver to state:

S. the financial institutions through which FHA
operated and from which most of its key officials in
Washington and the field were recruited, were the very
financial and real estate interests and institutions
which led the campaign to spread racial covenants and
residential segregation.44


42Weaver, op. cit., p. 71.

43Forbidden Neighbors, p. 156. It is interesting to
note tnat few Negroes are on tne constituent 1100 member
boards that make up the National Association of Real Estate
boards. The Association holds exclusive rights to the word
realtorr." A Negro, not a member of the local real estate
boards, cannot be a realtorr." lie must be a "realtist."
This deprives the Negro broker access to sources for his cli-
ents, such as multiple listings which are only open to mem-
bers of real estate boards.
44Weaver, op. cit., p. 70.






The FHA continued to encourage racially restricted

housing until 1950, despite the pressure that had been

building up by civil rights groups and state and local anti-

discrimination commissions against this practice.45 In 1947,

the Agency did revise the Underwriting Manual by deleting

most references to racial groups and eliminating the model

racial restrictive covenant. This action, however, did not

constitute a real change in its policy as it amounted to

merely softening the Manual's wording in relation to racial

restrictions. The first drastic revision in the FHA's policy

came after the Shelley v. Kraemer decision in 1948. After

this decision the FHA amended its rules that had permitted

the financing of housing formerly restricted on the basis of

race, creed or color. However, nearly two years elapsed be-

fore the FHA moved to align itself with the Supreme Court's

decision. Even after the Supreme Court ruling rendering ra-

cially restrictive covenants unenforceable in the courts,

Assistant FHA Commissioner W. J. Lockwood, in November, 1948,

months after the Shelley decision, stated that the "FHA has

never insured a housing project of mixed occupancy" and that

he believed "that such projects would probably in a short

period of time become all Negro or all white."46



451959 Report, p. 464.

46Ibid.
Indications that there might have been official
pressure upon the FHA to change its rules and regulations
was a statement by then Solicitor General, Philip B. Perlman,
who had filed an amicus curiae brief for the government in




39

After December 2, 1949, the FHA underwent a new phase

in its racial policy. On that day an FHA directive announced

that the agency would no longer insure properties that were

subject to racial restrictive covenants filed after February

15, 1950.47 The revision of the FHA's Underwriting Manual

seemed finally to give recognition to the special problems

facing minority group families in the quest for housing.

This was followed up in 1951 with an announcement that all

repossessed FHA-insured housing would be administered on a

nonsegregated basis. In 1953, the FHA began to set annual

goals for local insuring offices in order to spur them on to

increase the supply of housing available to minority fami-

lies. A final phase of FHA's minority group policy was an-

nounced in a speech on May 21, 1954, by FHA Commissioner

Norman P. Mason. He outlined a positive program whereby the

FHA would encourage open occupancy in housing so as to serve

the minority housing market.48

By 1954, FHA had run the gamut from a policy requir-

ing segregation to a policy of promoting minority housing and


the SheZZey case. Before a conference of the New York State
Committee on Discrimination in Housing on December 2, 1949,
he stated that the FHA was amending its rules and that "these
actions are designated to bring the mortgage insurance opera-
tions of the FHA into line with the policy underlying the re-
cent decisions of the Supreme Court of the United States.
S. ." Quoted in Investigation of Rousing, 1955, p. 545.

471959 Report, p. 464.

48Investigation of Housing, 1955, p. 545.







open occupancy projects. However, little occurred between

this time and the issuance of President Kennedy's Executive

Order 11063 in November, 1962, to show that the open occupancy

concept in housing was being carried out. The FHA still in

fact issued mortgage insurance to builders who discriminated

against Negroes.

The ban on restrictive covenants constituted only

one means of housing discrimination and FHA's refusal to in-

sure property with such a proviso did not have a great effect

in securing equal housing opportunity. In spite of the open

occupancy policy to which the FHA had moved by 1954, it re-

mained a fundamental principle of the Agency that builders

and lenders should be entirely free to make their own deci-

sions as to who could buy or rent houses built with the aid

of federal mortgage insurance.49 This policy did not pro-

vide Negroes with additional existing housing to any great

extent nor did it open to Negroes new housing or apartment

units in suburban and outlying areas.50 Here Negroes met


49Housing Report, p. 25.

50Equal Opportunity in Housing, a report of the
American Friends Service Committee, 1955, stated: "Of
2,761,172 units which received Federal Housing Authority in-
surance during the years 1935-50 an estimated 50,000 units
were for Negro occupancy. This amounts to 2 per cent of
the FHA total." American Friends Service Committee, Equal
Opportunity in Housing (Philadelphia: American Friends Ser-
vice Committee, March, 1955), p. 7. The United States Com-
mission on Civil Rights reported on the basis of the testi-
mony given in its regional hearings that from 1946 to 1959
less than 2 per cent of the new homes insured by the FHA had
been available to minorities. Housing Report, p. 63.







the discriminatory practices of the real estate business,

the home building industry, and the financial institutions

who continued to deprive them of housing. FPIA insurance was

still granted to builders who openly discriminated against

Negroes.51 With the help of FHA financing, huge insured

projects that are now residential towns were built with an

acknowledged policy of excluding Negroes.52

FHIA, with the advent of anti-discrimination laws

passed by state and local governments, began to utilize a

policy of refusing to insure loans for discriminatory build-

ers. This, of course, applied only to those states and

cities that enacted anti-discrimination housing laws.53 As

of September 30, 1963, seventeen states and sixty cities

had laws or resolutions affecting discrimination in housing.54

With some of these units of government, the FlEA worked out

agreements with the various state commissions that were cre-

ated to enforce the anti-discrimination in housing. Under



51Builder William Levitt, who had initially con-
structed developments in New York, Pennsylvania and New
Jersey that excluded Negroes until forced to integrate them
by order of the courts, was erecting in 1962 a suburban com-
munity, Belair Levittown, in Bowie, Maryland. According to
Paul Cooke, National Vice Chairman of the American Veterans
Committee, the development was to be an all-white one and
Negroes were to be barred. Testimony before the United
States Commission on Civil Rights, Regional Hearings, Wash-
ington, D. C. (Washington: U. S. Government Printing Office,
1962), p. 232.
52
21959 Report, p. 465.

5Ibid.

54Trends in Housing, VII, No. 5 (September-October,
1963), 7.







these agreements, FHA would cease to do business with any

builder or housing developer who had been found by these

commissions to have violated the state's anti-discrimination

housing law and had been enjoined to refrain from such

action.55

Prior to President Kennedy's Executive Order

11063 in 1962, the effect of FHA's agreements to support a

state's anti-discrimination laws was limited. It was limi-

ted because FIIA did not take action on its own initiative

if a builder practiced discrimination. FHA did nothing un-

til a "valid finding" of a builder's violation of state law

had been made by a state agency.56 By the time a particular

case had been adjudicated by the state commission on anti-

discrimination and its ruling had gone on to subsequent li-

tigation upon being challenged, the builder generally had

completed and sold all the homes on a discriminatory basis.


Veterans Administration (VA)

On June 22, 1944, Congress passed the Servicemen's

Readjustment Act,57 the GI bill, a provision of which pro-

vided veterans of World War II the opportunity to buy homes

with little or no down payment. Unlike the FHA insured

mortgage program, the GI loan plan was not principally



55See Chapter VI, State Laws Against Discrimination
in Publicly Assisted Housing, for a more detailed account.
561959 Report, p. 466.

57Servicemen's Readjustment Act of 1944, 58 Stat. 284.







concerned with stimulating the home construction industry,

but was concerned with providing homes for veterans. Thus,

the VA guaranteed the financing of homes at low interest

rates and in case of defaults, lenders were assured of cash

payments for any losses incurred. Government-guaranteed

mortgage loans were available to veterans under terms gen-

erally more liberal than those of FHA loans, including, at

one time, the privilege of buying homes with no down payment.

From 1944 to 1960, the VA had through its loan program

guaranteed almost $50 billion in mortgages on more than

5,500,000 homes.58 Since its policies were more liberal

than the FIIA, VA's benefits were believed to be more readily

available to more low-income home purchasers, and hence to

nonwhites.59

The VA did not refuse to guarantee loans made by

private lenders if the property was encumbered by racial

restrictions created and recorded after February 10, 1950,


5Housing Report, p. 68. The volume of individual
home loans guaranteed by the VA program exceeded that of the
FHA. In 1956, almost a fourth of all existing first mort-
gages on owner-occupied, single dwelling units in the United
States were VA-guaranteed. See Davis Mchntire, Reoidence
and Race (Berkeley: University of California Press, 1960),
p. 307.

59Ibid., pp. 68-69. Neither the FIIA nor the VA main-
tained lists of Negroes who were recipients of the insured
mortgage program or loan guarantees. It is estimated that
nonwhites held 2.9% of VA loans in 1956 while VA statistics
show that 7.5% of all civilian veterans of World War II and
the Korean war were nonwhite.





44

as did the FIIA.60 However, the lenders who made such loans

could not convey the property to the VA in the event of de-

fault or foreclosure. The VA felt that the loss of this op-

tion had the effect of causing the lender not to make loans

on racially restricted housing. Reporting to the United

States Commission on Civil Rights, the VA stated that, "So

far as we know, no loan has been guaranteed on a property

covered by the proscribed restriction."61 The contemplated

effect of this regulation was to prevent and make it impos-

sible for housing developers to market their products to

veterans if racial restrictions were placed on their proper-

ties.

As of 1961, the VA had cooperative agreements with

five states that had anti-discrimination laws: New York,

New Jersey, Washington, Oregon and Connecticut.62 Under

these agreements, the VA advised the state's anti-discrimi-

nation agency of new housing developments which were sub-

mitted to it for approval. The state in turn advised the

builder of its anti-discrimination statute.63 Like the co-

operative agreements arranged by the FHA with state commis-

sions, the burden rested on the state agency to find that a


601959 Report, p. 497.

61Ibid.

62Housing Report, p. 69.

63Ibid.





45

builder had violated the law.64 Only then would the VA sus-

pend the builder from the program. No builder had been sus-

pended from the VA program by 1961.

The Commission on Civil Rights noted in 1959 that

the cooperative agreements arranged with states having anti-

discrimination laws were superfluous because the VA had power

in its own right to suspend builders practicing discrimi-

nation.65 Under Section 504 (C) of the Servicemen's Read-

justment Act of 1944, the VA was authorized:

S. to refuse to appraise any dwelling or housing
project owned, sponsored, or to be constructed by any
person identified with housing previously sold to
veterans . as to which it is ascertained that the
type of contract of sale or the method or practices
pursued in relation to the marketing of such properties
were unfair or unduly prejudicial to veteran pur-
chasers .66

The implication can be drawn from this section of

the law that the VA could enforce this provision in all

states, and not in just those having anti-discrimination

laws. To wait for a state's fact-finding agency to dis-

close and prove a violation should have had no bearing on

the VA's right to suspend a builder from participating in

the program throughout the country. The VA, however, had

not deemed it necessary to enforce this provision of the

law.


64
6Supra, pp. 41-42.
651959 Report, p. 499.

66Housing Report, p. 70.







Federal National Mortgage Association (FNMA) and the
Voluntary Home Mortgage Credit Program (VHMCP)

The Federal National Mortgage Association (FNMA) has

as its basic function the purchasing and selling of residen-

tial mortgages that have previously been insured by the FHA

or guaranteed by the VA, that is, its secondary market opera-

tions. Its second role is to offer special assistance to

segments of the American people who cannot obtain adequate

housing under established home financing programs. FNMA's

latter function is similar to that of the Voluntary Home

Mortgage Credit Program (VHMCP) which was established by the

Housing Act of 1954 so that mortgage money would be made

available to people in small communities and for minority

groups in any area who could not obtain FIIA-insured or VA-

guaranteed loans on the same terms as are generally avail-

able to others.67 The result of these provisions has been

to stimulate a volume of new construction for minority

groups. The figure has not been large in relation to the

need, but it was greater than private industry would other-

wise have provided. However, the houses built under the two

programs, with few exceptions, have been built in segregated

projects.68

FNMA makes available special assistance funds for

the purchase of home mortgages under special housing pro-

grams. This results in direct government lending for special


67Ibid., p. 54.

68Where Shatt We Live?, p. 31.





47

programs ranging from housing for the aged and urban renewal

housing. The programs also provide new low-rent housing de-

velopers a reduction of interest and amortization costs.69

When special assistance funds have been utilized for minority

groups, their spokesmen have opposed such a program designa-

tion, feeling that these funds would be used for segregated

housing projects.70 A proposal to counter this tendency by

using FNMA funds specifically for assistance to open occu-

pancy housing developments was subsequently turned down in

1959 by Norman Mason, then Administrator of the HHFA.71 He

felt that FNMA's special assistance fund should not be desig-

nated for open occupancy projects and that the needs of mi-

nority group families could be better met through the general

housing program.

The Voluntary Home Mortgage Credit Program (VHMCP)

was established in 1954 with the basic recognition by the

mortgage banking associations that minority groups were not

securing their share of housing or home finance.72 The pri-

vate lending industry had offered this proposal before both



69Housing Report, p. 76.

70McEntire, op. cit., pp. 310-312.
71This proposal was offered by Emil Keen, Chairman
of the Long-Range Planning Committee of the New York State
Home Builders Association, who recommended that the Presi-
dent authorize FNMA to set aside $250 million for the pur-
chase at par of mortgages on homes to be offered on an open
occupancy basis. See U. S. Commission on Civil Rights, Re-
gional Hearings, New York City (Washington: U.S. Government
Printing Office, 1959), pp. 276-277.
72Housing Report, p. 53.





48

the Senate and House Banking and Currency Committees, in the

second session of the Eighty-third Congress, to head off more

direct-government lending. When incorporated into the Hous-

ing Act of 1954, the program was based on voluntary action

by private lenders with their own investment funds. Under

the program, regional committees were created to serve as a

channel for making private FHA or VA money available to qual-

ified borrowers who had been unable to secure loans because

of their minority status. Lenders cooperating with the pro-

gram were asked to make loans at reasonable rates to quali-

fied minority group persons who could show that they had

been turned down by at least two local lenders. Obviously,

the very fact that the VHMCP was brought into being attested

to the fact that there was discrimination in the financing

of homes for minority groups.

From 1954 to 1961, 47,036 loans had been placed by

the VHMCP. Of this figure, 10,108 had been for minority

group members.73 The peak year for loans in any year during

this period was 1956 when 1,108 went for minorities. Since

1956 the number has become progressively lower each year.

The Commission on Civil Rights concluded in 1959 that

. VHMCP has neither stimulated any large volume of
construction of new homes for minority group families,
nor apparently has it relieved to any appreciable ex-
tent the shortage of mortgage credit for minority
groups.74


731bid., p. 56.

741959 Report, p. 495. The Housing Report of the
Commission in 1961 felt nothing markedly had occurred in the






The failure of the VHMCP to attract more applications from

minority groups has been attributed by the program's adminis-

trators to the lack of experience on the part of lenders.

According to the administrators, an ample supply of loan

money has been made available to Negroes.75 However, there

has been evidence to the contrary. A real estate broker

from Ohio furnishing information to the Commission in 1961

reported: "I know of no instance that the [VIIMCP] program

has secured a lender for the first home [to be occupied by a

Negro] in a new area."76 Furthermore, he stated that,in his

experience, applications by minority group members were re-

ferred back to the same institutions that had discriminated

in the first instance.77

Both the FNMA and the VHMCP had announced policies

of equal housing opportunity for all,and both expressed their

opposition to the concept of race as a factor in the determi-

nation of insured mortgages for home purchases. Yet, they

were powerless under the law to do anything about the ex-

isting prejudice of the private lending industry which made

the ultimate decision on home mortgages. These government

agencies did not initiate loans. They operated in the over-

all environment of the private housing and hone finance


interim to alter this conclusion.

75Housing Report, pp. 57-58.

76Ibid., p. 57.

77Ibid.







industry. As the Commission on Civil Rights pointed out:

It is here that the critical decisions are made that
determine the effect of Federal aid to home financing,
and it is here that the force of the Federal Government
must be exerted against housing discrimination if it is
to be exerted effectively.78

To take this course would necessitate the reorienta-

tion of the private banking system in the United States.

The Co rimission was aware of the deep-seated nature of the

problem. Yet, the Commission felt that effective measures

could be developed which would not deprive the banking com-

munity of its power to make independent final judgments.

The Commission suggested that directives could be drawn up

so as to stifle the lending practices that encouraged segre-

gated housing. Properly designed, the measures would not

prevent private bankers from making legitimate financial de-

cisions based on facts and not on false concepts such as the

effect of Negroes on the decline of property values.79 To

this end the Commission recommended in its Housing Report

of 1961 that the federal government, either by executive or

by congressional action, take appropriate measures "to re-

quire all financial institutions engaged in a mortgage loan

business . supervised by a federal agency to conduct

such business on a nondiscriminatory basis. .. ."80



7Ibid., p. 79.
79Ibid., p. 52.

80Ibid. p. 151.
The supervision of the federal government over the
financial community is quite extensive and is indirectly







Public Housing Administration (PIIA)

The first government aided low-rent housing program

came out of the depression. Operating under Title II of the

National Industrial Recovery Act, the housing division of the

Public Works Administration (PWA) undertook the construction

of large-scale housing projects in thirty-six cities. In

1937, the PWlA's housing function was succeeded by United

States Housing Authority (USHA).81 The creation of this

agency served notice that the government was committed to a

long range low-rent public housing program. By May of 1940,


involved in many ways with housing. Federal Savings and Loan
Associations are incorporated under federal statutes and they
provide mortgage financing to individuals and corporate
builders and buyers. Also, banks which finance mortgages on
housing constructed without other federal assistance or insur-
ance are customarily members of the Federal Reserve System
and their deposits are protected by the Federal Deposit Insur-
ance Corporation.
The 1961 Housing Report of the Commission on Civil
Rights, pp. 28-53, described the extent of governmental in-
volvement. The Commission indicated that these services by
the federal government cast the government in the role of
participant in what otherwise would be nongovernmental trans-
actions. Therefore, the ban against denials of equal protec-
tion might be held to apply to the home financing activities
of Federal Savings and Loan Associations and banks which are
members of the Federal Deposit Insurance Corporation and
Federal Reserve System. Such federal benefits which these
institutions might not otherwise realize through private ac-
tions provided a basis for legislative or executive regula-
tion of their home financing activities according to the
Commission. The Commission ascertained that private lending
institutions which benefit from federal programs and are
supervised by federal agencies hold more than 60% of the
country's nonfarm home mortgage debt.

81U. S. Housing Authority was subsequently succeeded
by the Federal Public Housing Authority in 1942, which was
in turn succeeded by the PIHA in 1947.







48,000 of the Authority's 140,000 aided housing units were

for Negro occupancy.82 Under the enabling legislation, the

Authority was granted the power to make loans to local hous-

ing authorities representing ninety per cent of the cost and

to pay annual subsidies to meet the loan carrying charges.83

The construction, ownership, and operation of public housing

properties were to be under the jurisdiction of local hous-

ing authorities.

Public housing prior to World War II proved to be a

boon to Negroes in the North and elsewhere, giving 20,000

Negro families an escape from slum living and a release from

substandard housing and high rents.84 Most of the housing

units, however, were located on what had been slum sites.

Following a neighborhood pattern plan, a majority of the

projects that were built became either all-Negro or all-

white settlements. By concentrating on slum sites and giving

preference in tenant selection to the racial groups that pre-

viously lived in the neighborhood, residential segregation

patterns were strengthened. The directors of the USHA were

convinced that the Agency could do little else at the time,

since Negroes needed housing desperately.85 Local public

housing authorities were permitted to enforce either


82Weaver, op. cit., p. 74.

83Housing Report, p. 14.

84Weaver, op. oit., p. 76.

85Ibid.







"separate but equal" or "open occupancy" policies. Most

cities chose the former policy in both the North and South

prior to World War II.86

Under the public housing laws, local authorities were

allowed to segregate whites and nonwhites on the basis of a

neighborhood pattern of occupancy. The local authority

first made a survey of blighted housing in the community to

determine the ratio of whites to nonwhites. This ratio was

then applied to the total number of public housing units

which the authority planned to build. Because the local

authority did not take into consideration the fact that Ne-

gro blighted housing was generally in worse condition than

that occupied by whites, the equity of the neighborhood pat-

tern formula may be considered as debatable. Because of

their housing needs, they received less housing than they

were entitled. Because of the neighborhood pattern, they

were forced to live in segregated projects. Since slum-

dwellings had to be eliminated at the same rate as new units

were constructed, it hit the Negro who had no place to go

while the new projects were being built.87 There is no

doubt that Negroes who did avail themselves of public hous-

ing benefited from the USHA program but segregated housing

patterns were enforced and Negroes were forced to turn to



86Housing Report, p. 111.

8Staughton Lynd, "Urban Renewal--For wViom?" Commen-
tary, XXXI, No. 1 (January, 1961), 34-45.







other slums while the old ones were being razed.88

The success or failure of the low-rent housing pro-

gram as applied to Negroes reflected the practices of the

local public housing authorities. Serving as agents of the

federal government, these local groups often exerted sig-

nificant pressure upon field employees of the USHA and its

successor, the Federal Public Housing Authority (FPHA).

The most difficult decision by local housing authorities

was the approach to residential segregation. In attempting

to avoid the issue, they concentrated upon slum areas and

followed the United States Housing Authority policy of not

changing the racial composition of neighborhoods.89

It was difficult for the federal housing authori-

ties to develop a national policy on segregation to govern

these federally aided programs. Since Congress had voted

down proposed amendments which would have expressly forbidden


88During World War II as Negro workers filled the
cities, the Black Belts in northern cities became more con-
centrated and densely settled. Chronic overcrowding caused
a spilling out of Negroes in quest for housing. Forced to
compete with whites for shelter, faced with no vacant sites
for Negro housing and curbed by the racial restrictive cove-
nants in private housing, each proposal opening new areas
for them met a storm of opposition. The Detroit race riot of
1943 was precipitated when in the previous year, the Sojour-
ner Truth Housing project, originally scheduled to be white,
was then opened up for Negro occupation. The Trumbull Park
Home riots in Chicago of 1953 and 1954 came about because of
the fear of Negro intrusion into an all-white housing project.
Riots that have occurred because of the entrance of Negroes
in all-white neighborhoods in recent years saw their counter-
parts in public housing as the competition for housing went
on. See Forbidden Neighbors, pp. 81-136.

9Weaver, op. oit., p. 179.




55

segregation in public housing,90 the public housing agencies,

USHA, FPHA, or PHA, left the decision of segregation to local

authorities, except for a requirement that equitable provi-

sion be made for all racial groups. In the states that

sanctioned or required separate public facilities, including

northern states that did not outlaw discrimination in public

housing or where the courts had declared segregated housing

patterns constitutional, racial enclaves continued to grow.

A federal policy that sought any uniform regulation was

bound to run into difficulties. If the policy required

abolition of segregation, it conflicted with states' rights;

if it advocated segregation, it might run counter to legis-

lation in some of the northern states.91

By March, 1961, nonwhites occupied 210,280 public

housing dwelling units out of 456,242 occupied or available

for occupancy, or 46 per cent of the total units.92 Because


90Typical attempts to tack on amendments forbidding
segregation in the housing programs were the following: Con-
gressman Adam C. Powell's amendment in 1949, U. S. Congres-
sional Record, 81st Congress, 1st Session, 1949, XCV, Part 4,
p. 8656; Congressman Jacob Javits' amendment banning segre-
gated projects underwritten by FHA mortgage guarantees, U. S.
Congressional Record, 83rd Congress, 2nd Session, 1954, C,
Part 1, p. 4487; Congressman Adam C. Powell's amendment re-
quiring assurances that all housing be made available on a
nondiscriminatory basis, U. S. Congressional Record, 86th
Congress, 2nd Session, 1959, CV, Part 7, p. 8654. Infra,
Chapter IV, pp. 116-126.

91Weaver, op. oit., p. 197.

92Housing Report, p. 110. Representative figures as
of 1960 were: Detroit--Negroes made up 29% of the popula-
tion while 51.3% of the 7,700 public housing tenants were







of this high percentage, the policies of PHA and the local

housing authorities had a large impact on the housing prob-

lems of Negroes. Undoubtedly the major cause of dispropor-

tionate Negro use of :' lic housing is their low economic

status. But as one witness stated before the Commission in

1960, there must be added

. the unrealistic, undemocratic, and unjust prac-
tices of the housing forces in the private real estate
market who cling to outmoded patterns of racial segre-
gation. Inability to secure housing in the real estate
market on an open occupancy basis and the accumulated
effect of the employment discrimination are directly
responsible for the disproportionate number of nonwhite
families in public housing.93

The basic racial policy of PHA was adopted in 1951 to

spread low-rent housing benefits equitably to Negroes. Known

as its "racial equity formula," and included in its Low-Rent

Housing Manual, the PHA announced that any program desiring

assistance for the development of low-rent housing "must re-

flect equitable provision for eligible families of all races

determined on the approximate volume and urgency of their

respective needs for such housing. i Supposedly, this



nonwhite; Los Angeles--"-..i j 3 made up 12% of the ,ulation
but constituted 65% of the people living in public iusi.
units; Baltimore--75% of these units were occupied by roes
who comprised 41% of the city's population. Chic?-o, which
the Commission on Civil ghts in 1959 called "the most
se r gated northern city," had 'groes occupying 85% of the
public housing in the ci 1959 report, p. 475.
93Housing rt, p. 111.

94U. S. Hous'n ... Finance ency, Public Hous-
jr. Administration, mw-Rent Hous-'..r Manual, : :. 102.1
( hington: U. S. 'vernment -inting Office, --- ruary 21,
1951).





57

formula was applicable to all sections of the country. But

in practice, the PIIA has applied the formula only in locali-

ties that operate their low-rent housing on a "separate but

equal" basis and only there to protect Negro interests.95

The formula was not applied where "open occupancy" policies

had been adopted by states or cities.

The patterns of de facto segregation in public hous-

ing essentially stem today in northern cities from site se-

lections. Since the PHA has no mandatory requirements under

the public housing laws, its positive approaches are confined

to encouraging communities to utilize vacant land or sites

outside of the areas of racial concentration. This policy

has been vitiated to a great extent by neighborhood opinion

which has resisted proposals to locate public housing in

nonslum neighborhoods or in outlying areas. Public pres-

sure on local governing bodies has often prevented appropri-

ate site selection.96

Lacking an affirmative mandate ("open occupancy" and

"racial equity formula" policies notwithstanding), the PIIA

has found itself powerless to cope with the trend of minority

group concentration in public housing. The Commission on



951959 Report, p. 475.
96Ibid. Pressure within localities to curb the ex-
tension of public housing from going into more favorable
sites has been in the form of forcing the local authority
to reduce the construction of the number of planned units or
by requiring a referendum before any public housing can be
built.






Race and Housing observed that ". .the conclusion seems

justified that public housing has served, on the whole, to

sustain and probably intensify racial segregation."97


Urban Renewal Administration (URA)

Until 1949, urban renewal was undertaken by a few

states that had passed laws granting private developers tax

exemptions to redevelop blighted areas in their cities.

With the passage of the Housing Act of 1949, there was recog-

nized that a comprehensive urban renewal program was neces-

sary to erase the blight defacing American cities. Federal

programs beginning with the 1949 act were designed to assist

the cities in solving the problems of blighted areas. Toward

that end the Housing Act of 1949 asserted:

. the general welfare and security of the Nation
and the health and living standards of its people re-
quire housing production and related community develop-
ment sufficient to remedy the serious housing shortage,
the elimination of substandard and other inadequate
housing through the clearance of slums and blighted
areas, and the realization as soon as feasible of the
goal of a decent home and a suitable living environment
for every American family. . .98

Title I of the Act provided for an urban redevelop-

ment program under which land cost in slum areas would be

written down to a price attractive for redevelopment.99


97Where Shall We Live?, p. 31.

98U. S., Congress, House, Committee on Banking and
Currency, Hearings, Housing Act of 1949, 81st Congress, 1st
Session, 1949, p. 1. Hereafter cited as Hearings, Housing
Act of 1949.

99Forbidden Neighbors, p. 244.





59

Federal grants paid two-thirds of the net cost of purchasing

and clearing redevelopment sites approved by local urban re-

newal authorities. In addition, when a capital grant to a

locality was involved, the government made relocation pay-

ments to individuals, families and business concerns dis-

placed. Although public housing authorities could benefit

from the writing down of land, the program was designed pri-

marily to aid private developers.100

After the urban redevelopment program had been in

existence for a short time, two facts became evident. First,

there were no houses available for the slum-dwellers who

were to be displaced from the sites. Secondly, slum-dwellers

were largely minority groups to whom housing in new areas

was denied.101 The concentration of minority groups in the

decaying cores of the cities, together with their forced im-

mobility, meant that urban renewal had a great impact on

them. Too often urban redevelopment officials and realty

groups saw the program as an opportunity to get rid of the

minorities.102 Little effort was made to administer the

program to emphasize acquisition of vacant land or insis-

tence upon projects which would favor rehousing of the mi-

norities. This occurred in spite of the admonition given

by Raymond M. Foley, then Housing and Home Finance Agency


100Lynd, op. oit., p. 35.

101Forbidden Neighbors, p. 244.

102Ibid., p. 245.






Administrator, before the House Committee on Banking and

Currency. Foley said:

. eliminating slum and blighted areas and making the
land therein available for redevelopment cannot be sepa-
rated from the necessity for providing the housing
necessary for the families now living in the slums. Any
slum clearance program which fails to assure adequate
rehousing for these families will be merely aggravating
their problems. . Such a short-sighted policy im-
poses unusual hardship on families of minority races who
comprise a considerable portion of our slum population
and for whom the problems of relocation are particularly
difficult.103

The hope for some of the displaced families would

have been the public housing program. However, in the two

sessions of the Eighty-third Congress, 1953 and 1954, Con-

gress failed to appropriate public housing funds. Groups like

the National Association of Home Builders, and the American

Federation of Labor--Congress of Industrial Organizations

have estimated that from 1960 to 1965 at least 2,000,000 new

dwellings were needed yearly to replace substandard housing,

reduce overcrowding, and house the rapidly increasing popu-

lation.104 The Housing Act of 1949 provided for 810,000

public housing units to be built within six years, but as

Michael Harrington has pointed out, less than half this num-

ber had been completed by 1960.105 Since private industry

has maintained a building pace of an estimated 1,000,000


103Hearings, Housing Act of 1949, p. 46.

104Michael Harrington, "Slums, Old and New," Commen-
tary, XXX, No. 2 (August, 1960), 118.
105Ibid.





61

units each year approximately 1,000,000 dwelling units were

not being built for the American people. These were homes

needed for low-income families for whom private builders did

not provide. Their plight was compounded by urban renewal

projects that actually reduced the amount of housing avail-

able to them. A study in 1961 made by Professor L. K. North-

wood of the School of Social Work, University of Washington,

reported that

During the first 10 years of urban renewal, approxi-
mately 115,000 housing units were built or in process
by 1959. These were planned to replace 190,500 origi-
nal dwelling units--a net loss of 75,500. About 56 per
cent of the families displaced were non-whites. This
process is expected to continue as the over-crowded
slums are cleared; a special problem is thereby set up
in finding other housing for Negroes.106

Experience under the 1949 Act showed that to be effec-

tive urban renewal had to cover a much broader program than

it did. In 1953, the President's Advisory Committee on

Government Housing Policies and Programs felt the existing

program offered only piecemeal thrusts at occasional slum

pockets without curbing the spread of urban blight. The Com-

mittee observed that "the tight relationship between cause

and effect in slums must be held in sharp focus, and we must

insist upon dealing with both if we are to get rid of

either."107 To this end, the Congress included in the Hous-


106
Quoted in Housing Report, pp. 107-108.
7U. S. President, Advisory Committee on Government
Housing Policies and Programs, Recommendations on Government
Housing Policies and Programs (Washington: U. S. Government
Printing Office, December, 1953), p. 109.






ing Act of 1954 new provisions which would facilitate a

broadened program of urban redevelopment and provide housing

for families displaced by slum clearance and urban renewal.

The Urban Renewal Administration (URA) was established

in 1954 as a constituent unit of the HHFA to administer the

slum clearance and urban redevelopment programs authorized

by the Housing Acts of 1949 and 1954.108 Since the 1949

legislation appeared only to nibble at the overall problem,

the 1954 Act broadened the slum clearance concept to include

more community planning so that workable programs might be

realized. To that end the legislation required communities

seeking federal assistance to draft "a program for community

improvement" including, in addition to slum clearance, a

plan for strict code and zoning enforcement, a comprehensive

community program, a neighborhood-by-neighborhood analysis

of blight, adequate financing, housing for displaced families

and community-wide citizen participation in the total plan.109

Communities complying with the requirements set down

by the HHFA and the PHA received loans to assist planning

and working capital for acquiring land and preparing the pro-

ject area for its reuses.110 In addition, federal grants

paid two-thirds of the net cost of these activities, that is,

the difference between what they cost and the price received


1081959 Report, p. 480.

109Housing Report, p. 82.
110Ibid.







for the land. Between 1949 and the end of 1961, Congress

appropriated grants of two billion dollars for urban renewal

projects. When President Kennedy signed the Housing Act of

1961, another two billion dollars were added to the program.

As of April 30, 1961, there were 786 communities operating

under active urban renewal programs.111

Urban renewal brought problems for Negro housing.

Adequate relocation of those displaced by slum clearance and

other community projects was foremost. Relocation was dif-

ficult because of impediments met in the housing market.

Relocation for many Negroes meant moving from one over-

crowded slum to another, creating further pressure on the

limited supply of housing available. The primary responsi-

bility for rehousing families displaced by urban renewal

rested with the communities, but the HHFA and the URA also

shared responsibility under the Housing Acts. Before any

community could gain certification of its urban renewal pro-

ject, the HHFA Administrator had to give his stamp of approv-

al to the rehousing programs contemplated by the community.

Once approval had been given, localities were left free to

execute the program with very little supervision by the

URA.112 Left to their own devices, the practices of local

relocation authorities failed to provide sufficient and


Ib111id.
1121959 Report, p. 480.







adequate housing for the displaced.113

In addition to relocation problems, the redevelop-

ment phase of urban renewal has resulted in an absolute re-

duction in living space for nonwhites; Since redevelop-

ment projects are mainly in the hands of private investors,

the housing that was built was geared to the middle and up-

per middle-income groups. New apartment houses, whose rents

ranged from seventy-five to one hundred dollars per room,

did not add to the supply of low-cost housing available to

the vast majority of the displaced poor. Civic promotions

also cut the figure of available housing. Staughton Lynd

has pointed out that

In subordinating all other considerations to the happy
marriage of private profit with the public tax base,
urban renewal programs sometimes decrease rather than
increase the housing supply. In this category are the
many projects for downtown civic centers, high-rise
office buildings, and industrial parks. . Most of
these nonresidential structures are clearly of obvious
value. But all such projects erected on former resi-
dential sites, decrease the total housing supply by the
simple fact that they tear down homes and put none in
their place.114

The Commission on Civil Rights has indicated that

the clearance of slums and their replacement with housing

accommodations beyond the means of most Negroes has given


113A study made by Professor H. W. Reynolds of the
University of Southern California showed that in 41 cities
undertaking urban renewal projects: 93% of the relocated
were nonwhite ; 70% entered nearby housing that was sub-
standard; 80% of the families paid higher rent for their new
housing. Described in Housing Report, p. 90.

114Lynd, op. cit., p. 36.







rise to the question whether slum clearance is being used

for "Negro clearance."115 In 1961, the Commission reported

a continuance of this trend stating that

If URA maintains a "no policy" posture it may reduce
the inventory of available nonwhite housing with no
guarantee that the rebuilt sites will be available to
all. In the face of a closed housing market, urban re-
newal, though it beautifies cities, may offer nothing
more than increased misery to low-income nonwhites.l16

The one promising federal program to encourage hous-

ing for families displaced by urban renewal projects is

known as Section 221 housing. This section was included in

the Housing Act of 1954. Technically, it was put under the

jurisdiction of the FHA but it is considered an important

tool for relocation purposes. Section 221 authorized the

insurance of mortgages on low-cost housing for sale to fami-

lies displaced from urban renewal areas and by other govern-

mental action such as highway displacement. Under Section

221, mortgage insurance with a maximum term of forty years

and a minimum down payment of only $200 was available if re-

quested by a community undertaking urban renewal and certi-

fied by the HHFA Administrator. This kind of housing could

be "built anywhere within the city limits of a community for

which it was certified, or in an outlying area if the govern-

ment thereof consented in writing."117


1151959 Report, p. 488.

116Houeing Report, p. 108.
117Ibid., p. 93.





66
Section 221 by 1961 had not resulted in encouraging

the large quantities of low-cost housing required for dis-

placed persons even though the terms appeared to be very

attractive. Racial restrictions on sites for 221 housing

and the low limitation on the maximum mortgage insurance

authorized appeared to be the chief obstacles to the pro-

gram.118 Because of the unavailability of open land for

Negro housing due to the existing neighborhood patterns of

occupancy, when Section 221 mortgage money was utilized,

the housing that was built under the program was constructed

in all or heavily Negro areas. The limitation on the maxi-

mum mortgage insurance has served as an additional inhibi-

tion. Under the program, the mortgage limit was $9,000 and

$10,000 for high-cost areas. A basic drawback within the

authorized mortgage limits was the high cost of land when

made available for the construction of new housing for Ne-

groes. Mortgage limits were not ample enough in the urban

or suburban areas with their inflated land prices.

The question of urban renewal and the relocation

problem has led to an aggravation of the housing problem

and has intensified race relations. The relocation of fami-

lies from renewal sites required a broad range of choice.

The agencies responsible for relocation work were confronted

with an almost insoluble problem--finding adequate housing

for displaced families without disturbing racial patterns.


118Ibid., pp. 94-100.





67

If they tried to upset the web of housing discrimination, or

failed to do so, a public uproar might follow.

Dennis Clark significantly observed:

. urban renewal became involved with civil rights
problems at the time when the civil rights of Negroes
were a burning national issue . the full social
significance of the process in relation to such problems
as race relations had not been clearly recognized by
the local agencies spurring renewal programs.119

The civil rights demonstrations and riots that began in the

summer of 1964 in part attested to this observation.

































ll9Clark, op. cit, p. 162.













CHAPTER III


CONSEQUENCES AND EFFECTS OF
RESIDENTIAL SEGREGATION


The people in Harlem know . they are living there
because white people do not think they are good enough
to live anywhere else. No amount of "improvement" can
sweeten this fact. Whatever money is now being ear-
marked to improve this, or any other ghetto, might as
well be burnt. A ghetto can be improved in one way
only: out of existence.1

James Baldwin


Residential Patterns: Segregation and
Concentration of Negro Population

There are many aspects to racial discord in the

United States. To single out any one factor for its cause

would be a gross oversimplification of a very complex prob-

lem. The historical, sociological, economic and emotional

factors of this problem cannot be ignored. A great many

groups and people have contributed to it by acts of commis-

sion and omission through the years. Certainly, the dearth

of Negro housing cannot be overlooked as a compelling force.

Beginning with the "long hot summer" of 1964, this

was brought to the fore in the metropolitan areas of the na-

tion. The abject ghetto conditions that prevail in Harlem,


1James Baldwin, Nobody Knows My Name (New York: Dial
Press, 1961), p. 65.







in the Bedford-Stuyvesant area of Brooklyn, in Rochester,

New York, in Newark, Patterson and Elizabeth, New Jersey, or

in the Watts district of Los Angeles, are found in cities

large and small wherever there is an extensive Negro popu-

lation. A configuration of tenements, the lack of good

schools, inadequate recreational facilities, and the short-

age of job opportunities condemn thousands of human beings

to lives that approach an emotional sickness.2

The nation becomes aware of these conditions when

headline-making riots occur and subsequent reports make

known the squalorous environment of the Negro ghetto to the

outsiders.3 Nathan Glazer has described how, in New York

City, the housing project is an important factor in upset-

ting the balance of the slums.4 The so-called normal


2For an account of the high incidence of psychiatric
illness among the poor in a slum neighborhood see August B.
Hollingshead and Frederick C. Redlich, Social Class and Men-
tal Illness: A Community Study (New York: John Wiley and
Sons, 1958).

3Michael Harrington has pointed out that slums and
poverty are often off the beaten track. The transformation
of the American city has made the poor invisible to the
white middle class who more than likely have made the exodus
to the suburban areas ringing the city. They may catch a
glimpse of the slums as they commute to work by bus or car or
on an occasional shopping trip, but it is not an important
experience to them. This kind of poverty is segregated from
emotional experience of millions of middle-class Americans
who know very little about the miserable housing in the cen-
tral core of the city where Negroes are increasingly iso-
lated from contact with anyone else. See Harrington, The
Other America, pp. 9-24.

4Nathan Glazer and Daniel Patrick Moynihan, Beyond
the Melting Pot (Cambridge, Massachusetts: The M.I.T. Press
and Harvard University Press, 1964), pp. 63-64.







families who live in projects that are erected around the

outer boundary of the slums, leave the remaining slums to

become the homes of the old, the criminal, the mentally un-

balanced, the most depressed, miserable and deprived.5 Gla-

zer pointed out that

.. .the slums that ring the projects, and areas that
were perhaps barely tolerable before the impact of the
projects are now quite intolerable. As we tear down the
slums, those that remain inevitably become worse. And
what . are we to do with the large numbers of people
emerging in modern society who are irresponsible and de-
praved?'

Even the more substantial members of the Negro popu-

lation are never totally withdrawn from this milieu. The

Negro middle class in the nation's large cities rarely es-

cape from the near presence of the Negro poor and the crimi-

nal. Bordering the lower-class, slum neighborhoods, the Ne-

gro middle class suffers the frustrations and psychic assaults

of their neighbor slum-dwellers.7 Because of the federal

government's housing policies described in Chapter II and

the prejudicial practices of the private housing industry,

the middle-class Negro is not far removed from the slums.

He is subjected to the same image that the white man has of

the slum-dweller. Prejudice becomes institutionalized and



5Ibid., p. 64.
6Ibid.

7Ibid. Although the Glazer and Moynihan study re-
lates only to the boroughs of New York City, their descrip-
tion is similar to other major metropolitan areas such as
Los Angeles, Atlanta, Philadelphia, Chicago and St. Louis.
For these descriptions see 1959 Report, pp. 354-374.







acts as a force that white America uses to keep the Negro

down. Michael Harrington recounted the vicious cycle the

Negro encounters in white America when he stated that:

White America forces him into a slum, it keeps him in
the dirtiest and lowest-paying jobs. Having imposed
this indignity, the white man theorizes about it. He
does not see it as the tragic work of his own hands, as
a social product. Rather the racial ghetto reflects the
"natural" character of the Negro: lazy, shiftless, ir-
responsible, and so on. So prejudice becomes self-
justifying. It creates miserable conditions and then
cites them as a rationale for inaction and complacency.8

The artificial social barriers and the very real eco-

nomic factors9 that bar Negroes from the housing market serve

to keep people apart and limit the opportunities for under-

standing and acceptance. Oftentimes this chasm has led to

tensions and fear between the white and Negro communities,

manifesting itself in violence as Negroes have sought to

leave their delimited areas. The harmful effects on the na-

tion and on international relations are immeasurable when


8Harrington, The Other America, p. 78.

9Better housing for Negroes and income are naturally
linked. The Negro market for housing is severely limited
compared to that of whites when family income figures are
analyzed. The median income of the Negro family in 1960 was
only 54% of that of the average white family--$5,893 for
white families and $3,161 for Negro families. U. S. Housing
and Home Finance Agency, Our Nonwhite Population and Its
Housing, the Changes Between 1950 and 1960 (Washington: U.
S. Government Printing Office, July, 1963), Table 12, p. 36.
Hereafter cited as Our Nonwhite Population and Its Housing.
The disparity in incomes is reflected in homeowner-
ship. In the last decade Negro homeownership has not kept
pace with the growth of white homeownership. Negroes in the
1950's did improve their position somewhat as homeownership
edged upward from 35% to 38% between 1950 and 1960. But
this increase lagged well behind white householders where a
sharp rise in the number of homeowners brought their propor-
tion up from 57% to 64% between 1950 and 1960. Ibid., p. 9.




72

these occurrences connote the lack of order and control with-

in the nation's societal complex. Since the conditions that

have created such hostility have tended to increase in the

last two decades, an examination of the problem shows that

racial tensions have resulted in no small degree from the

rigid patterns of segregation that have evolved in the

nation's cities.

By the year 1960, the total nonwhite population of the

United States approached 20,500,000 people. Of this figure,

more than ninety-five per cent of the nonwhites were Ne-

groes.10 Although Negroes comprised eleven per cent of the

population, they had been restricted to four per cent of

the residential area in the nation's urban cities.11 Negro

migrations since 1900 have created this shortage of living

space and the problem has been compounded since then by the

meager housing opportunities that were made available to

them. Seeking greater economic opportunity, there has been

a continuous migration from the South. Since the turn of

the century, the geographic distribution of Negroes by 1960

saw Negroes comprising only fifty-six per cent of the popu-

lation in the South.12 In the 1950's alone, nearly 1,500,000

nonwhites left the South.13 The movement from farm to city


10The Negro population in 1960 was 18,871,831. U. S.
Bureau of the Census, Census of the Population, 1950 and 1960
(Washington: U. S. Government Printing Office, 1960).

11Louis E. Lomax, The Negro Revolt (New York: Harper
and Brothers, 1962), p. 55.

120ur Nonwhite Population and Its Housing, p. 2.
13Ibid., p. 3.




73

was not only a northern migration as the South felt a signi-

ficant Negro movement into its cities. As a result of the

shift in the Negro population, the year 1960 showed a nation-

wide urban nonwhite population of 14,800,000, a gain of

4,800,000 over 1950.14

As Negroes moved into urban areas, they gravitated

into the central cities. By 1960, 10,300,000, or slightly

more than half the nonwhite per cent of population, lived in

such communities, a gain of sixty-three per cent over 1950.15

At the same time, there was a corresponding shift among

whites from the cities to the suburbs so that by 1960, fifty-

two per cent of the white population lived outside of the

central cities.16 From the standpoint of the nation's 212

standard metropolitan statistical areas, the 1960 census

showed divergent patterns for white and nonwhite sections of

the population. In the case of nonwhites, seventy-eight per

cent lived in the central cities, while only twenty-two per

cent were in the suburbs.17 The failure of most of the non-

white families to move into suburban communities was not due

entirely to their own predilection for the central city en-

vironment. It was more the reflection of the lack of housing

available to them in most suburban areas because of race or


14Ibid., p. 3.

15Ibid., Table 5, p. 22.

16Ibid.

17Ibid., p. 3.







their inability to pay for such housing.

The racial influx into the cities has not been the

sole reason for the white population's flight to the suburbs.

Yet, between the years 1950 and 1960 the twelve largest Uni-

ted States cities lost over two million white residents while

gaining nearly two million Negro residents.18 A projected

picture of the future in the principal cities of the United

States would clearly be: large nonwhite concentrates (in



18Charles E. Silberman, "The City and the Negro,"
Fortune, LXV, No. 3 (March, 1962), 88.
Former Director of the Census Bureau, Richard M.
Scammon, has pointed out that the white flight to the suburbs
is not solely due to immigrating Negroes. lie has stated that
the population shift revealed by the Census occurred even in
cities like Minneapolis where the proportion of nonwhites was
only 2.4%. Thus, he claimed that the flight was due to funda-
mental factors in our cities having nothing to do with race.
However, he related that the racial problem arose from the
fact that with the strong attraction of the suburbs operating
on all city residents, only majority group families can take
advantage of the homes that are being constructed. Washing-
ton Post, March 26, 1961, p. E3.
The first major city in the nation to achieve a Ne-
gro majority in its population was Washington, D. C. By
1960, the central city was 54% Negro. As one witness before
the United States Commission on Civil Rights pointed out:
"What has happened is that Negroes have grown largely within
the confines of the District of Columbia, while the white
population has spread to all of the surrounding suburbs." U.
S. Commission on Civil Rights, Regional Hearings, Washington,
D. C. (Washington: U. S. Government Printing Office, 1962),
p. 13. At the same time the nonwhite population in the sub-
urban areas around the District of Columbia was 6.5%.
The Commission on Civil Rights, referring to the
"white noose" around the city has said: "There may be rela-
tively few Negroes able to afford a home in the suburbs, and
only some of these would want such homes, but the fact is
that this alternative is generally closed to them. It is
this shutting of the door of opportunity open to other Ameri-
cans, this confinement behind invisible lines, that makes
Negroes call their residential areas a ghetto." 1959 Report,
p. 378.







some cases, majorities as in Washington, D. C.), and large

white majorities, with a few segregated Negro enclaves, in

the surrounding areas.

The explosive growth of large Negro populations has

constituted the large cities' principal problem and concern

since World War II. As has been pointed out by the late

Morton Grodzins, the Negro migration involved great politi-

cal, economic, and cultural stakes for the affected metro-

politan areas.19 The more tangible effect so far has been

the spreading slums, those areas that city officials talk

about when they point to the physical deterioration of areas

inhabited by Negroes. When studies and reports are given

about juvenile delinquency, fire protection, the burden of

welfare payments, or any of a long list of city problems,

officials are talking principally about the problems of Ne-

gro adjustment to the city. The problems confront the na-

tion's principal cities with a severe crisis--a crisis in

black and white.20 For the large cities were not absorbing

and "urbanizing" their new Negro residents rapidly enough.

Unlike the slums once inhabited by earlier European immi-

grants, Negro ghettos were not acting as the incubator of a

new middle class.

The first consequence of this racial schism within


19Grodzins, Scientific American, XCVII, No. 4,
33-44.

20Charles Silberman, Crisis in Black and White (New
York: Random House, 1964), pp. 17-35.






the cities is a spreading of the slum. Since there is no

free housing market for Negroes, limited areas have been

carved out and "restricted" for their occupancy, "restricted"

both by the private housing industry and even public offi-

cials. The latter, concerned with the public housing pro-

jects, invariably followed the existing neighborhood pat-

terns. Thus, public housing all too often became equated

with Negro housing. If these public housing units were not

built within the slums themselves, they formed a perimeter

around the deteriorated area.21

Because the Negro population has increased faster

than the living space made available,22 areas that house

Negroes become overcrowded by the conversion of one-family

houses to multiple dwellings and by squeezing two or more

Negro families into apartments previously occupied by a

single family. An overview of this situation tends to show

that the housing occupied by Negroes is more expensive, more

crowded, in greater need of repair, and is marked by the

greater lack of civilities (such as private bathrooms) than


21Central Harlem occupies only a 3.5 square mile area
of upper Manhattan. However, 232,000 people are packed into
the area, 94% of whom are Negro. It is estimated that if the
population density in some of Harlem's worst blocks prevailed
in the rest of New York City, the entire population of the
United States could fit into three of its five boroughs. "No
Place Like Home," Time, LXXXIV, No. 5 (July 31, 1964), 11.

22Between 1950-1960 the nonwhite population increased
at a faster rate than the white. The nonwhite percentage in-
crease during the decade went from 17 to 27% while the white
percentage increase rose from 11 to 18%. Our Nonwhite Popu-
lation and Its Housing, Table 1, p. 15.







the housing occupied by whites with the equivalent incomes.

The very conditions of life in Negro slum neighbor-

hoods subsequently lead the greater white population to re-

sist any Negro expansion at all. Whether this Negro expan-

sion might be due to blockbustingg," the erection of Negro

public housing projects, or the attempt to find housing for

Negroes displaced by urban renewal projects in adjacent

white areas, hostile feelings are aroused in white neighbor-

hoods. The prevalent reaction against any Negro intrusions

is that displaced families from slum sites are not the best

pioneers in penetrating all-white neighborhoods. Citing the

problem, Grodzins has related that

The racial attribute--skin color--is added to the social
attributes of lower class behavior. . While Negroes,
like other urban immigrants, can lose undesirable social
attributes, they cannot lose their color. They there-
fore do not have the mobility of other immigrant groups.
They are racially blocked, whatever their social bona
fides.23

Negroes are not, of course, the only disadvantaged

group in the large cities. The Puerto Rican population in

New York had reached 700,000 in 1960 and cities like Cincin-

nati, Baltimore, St. Louis, Detroit, and Chicago have re-

ceived a steady stream of impoverished whites from the

southern Appalachian Mountains.24 But Puerto Ricans and Ap-

palachian whites affect only a limited number of cities and


23Morton Grodzins, "Segregation in the North," The
Progressive, XXIX, No. 1 (January, 1959), 66.

24Hal Bruno, "Chicago's Hillbilly Ghetto," The Re-
porter, XXX, No. 12 (June 4, 1964), 28-31.







only in a limited way.

City officials and planners face many problems but

the foremost problem in almost all large cities and many

smaller ones is the Negro. Most of the Negroes in the North

have been crowded into the slums of the twelve largest

cities, which today hold sixty per cent of the Negroes out-

side the deep South.25 Acceleration of Negro populations in

the nation's cities is evident. Since 1940 the Negro popu-

lation of New York City has increased nearly two and one-half

times to 1,141,000 by 1960. In Philadelphia, Negroes have

doubled in number to 535,000, or twenty-seven per cent of

the city's population between 1940-1960. The Negro popula-

tion has more than tripled in twenty years to 487,000, or

twenty-nine per cent of the city's population in Detroit.

While in Los Angeles the Negro population has almost in-

creased sixfold since 1940, going from 75,000 to 417,000.26


25The figures cited here are drawn from: Silberman,
Fortune, LXV, No. 3, 90 and Our Nonwhite Population and Its
Housing, p. 28.

26These increases have resulted in a heavy concen-
tration of most Negroes into one or two or more severely con-
stricted areas, with some small scattering of colored fami-
lies in other sections of the city. See 1959 Report, Charts
XXII-XXXI, pp. 355-364. A general observation would indi-
cate that the larger the proportion of Negroes in the total
population of a city, the higher is the degree of their con-
centration. One-third of Philadelphia's Negro population,
now approximately 600,000, is concentrated in an area of
four square miles. Minneapolis Sunday Tribune, August 30,
1964, p. 1.








Social Consequences

The effect of residential segregation has intensi-

fied the needs and problems which are evident in the many

Negro communities around the country. Well-documented re-

ports constantly point out that these needs and problems are

the direct result of past and present discrimination and ex-

clusion based on race.27 As suggested by the National Urban

League, it has resulted in a large segment of the American

Negro population lagging behind other Americans in every

type of measurement which can be used to determine social

and economic well being.28

Since this study is not concerned with the total

consequences of racial segregation, only those indices which

can be directly related to segregated and poor housing will

be noted here.

1. Despite an improvement in the condition of Ne-

gro housing since World War II, nearly half of all



27There are numerous reports relating to the eco-
nomic and social effects of residential segregation. Excel-
lent descriptions can be found in the following: Equal Op-
portunity in Housing, issued in 1955 by the American Friends
Service Committee; Where Shall We Live?; 1959 Report, pp.
343-397; Chicago Urban League, Report to the Illinois House
Executive Committee, 72nd General Assembly (Chicago: Chicago
Urban League, 1961).

2National Urban League, A Statement Urging a
Crash Program of Special Effort to Close the Gap Between the
Conditions of Negro and White Citizens (New York: National
Urban League, June 9, 1963). This statement contains the
request of the Executive Director of the National Urban
League, Whitney M. Young, for a "Marshall Plan" program to
close the wide economic, social and educational gap between
Negroes and whites.







houses and apartments occupied by Negroes are still

classified in the Census as dilapidated or deteriorating.

Forty-four per cent of the housing units either owned or

rented by Negroes have been adjudged substandard.29

Only fifteen per cent of all occupied housing units of

the white population in the nation are in this condi-

tion.30

2. Although the housing available to the Negro is

poorer than that available to the white person, the rents

charged Negroes are nearly as great as those paid by the

whites. In terms of home ownership, it has been deter-

mined that the nonwhite buyer of a house gets less for

his dollar than the white person who buys a house in the

same price category.31

3. Coupled with the condition mentioned above is

the fact that the median income of Negro families is

only fifty-four per cent of the white. This has meant

that Negroes can only acquire housing by "doubling up,"

that is, many families sharing an apartment unit or ex-

tensive overcrowding in homes that are owned. Between

1950-1960, among nonwhite families the number of over-

crowded units increased over the decade from nearly one



29Our Nonwhite Population and Its Housing, p. 10.
Standard housing units are units that are not dilapidated
and have private toilets, baths and hot running water.

30Ibid.

311959 Report, p. 345.







million in 1950 to 1,300,000 in 1960.32

4. While good housing does not guarantee good be-

havior, bad housing has contributed to disorganization

and the breakdown of the Negro family and hence to juve-

nile delinquency. In addition there is a direct rela-

tion between congested neighborhoods and those areas in

a city having the highest rates of tuberculosis and in-

fant mortality, the greater incidence of fires and a

higher ratio of crimes.33

5. The effects of minority housing inequalities

causes the whole city to suffer. Disease, fire, build-

ing deterioration, and crime are major items in any

city's budget. With the movement of middle-and higher-

income residents to the suburbs, the city's costs have

increased while its revenues have been cut. In 1958, as

estimated by the Commission on Civil Rights, the sub-

standard twenty per cent of our urban centers, containing


320ur Nonwhite Population and Its Housing, p. 12.
An average of more than 1.5 persons to each room
is considered a measurement of overcrowding in a housing
unit.

331959 Report, pp. 386-394.
Judge Justine W. Polier of the Children's Court
and Family Court of New York City has emphasized the close
relationship between housing and the family conditions of
children and delinquency. In a study of 500 children who
came into her court, she found that the majority of these
children were living in substandard housing areas, and an
even higher percentage came from broken homes. Her account
cited the influence of slum living upon Negro children.
Living in slums, knowing that it is a Negro area and seeing
all around them badges of inferiority and discrimination, has
caused young Negroes to lose their sense of personal worth
and hope for their own future. Ibid., pp. 388-389.







some thirty-three per cent of the urban population,

accounted for forty-five per cent of the total city

costs but yielded only six per cent of the real estate

tax revenues.34

6. The schools available to slum-dwellers are in-

ferior. Located in the oldest sections of cities, they

are likely to be overcrowded, antiquated, poorly equipped,

subjected to periodic turnovers of teaching staffs, and

more prone to have double shifts during the day because

of the crowded conditions. But above all, they are seg-

regated in fact although not by law.35 Arnold Rose, who

assisted Gunnar Myrdal in writing An American Dilemma,

has reiterated the conclusion voiced by many observers

that de facto segregation in the public schools will be

maintained as long as residential segregation exists.

In a recent study of the problem Rose maintained that

this is the major problem of race relations in the North

and West. He has stated that


34Ibid., p. 390.
Louis Lomax in The Negro Revolt, pp. 56-57, re-
ported how housing discrimination increased welfare costs
for Cook County, Illinois. In his account the Illinois Aid
to Dependent Children (ADC) report for 1956 showed that a
major cost item of the welfare budget went to housing unwed
and deserted mothers, a high proportion of whom were Negroes.
The report showed that it cost Illinois taxpayers $83.77 a
month to house the average Negro ADC case as compared with
$64.84 for the average white ADC case. This discrepancy was
caused solely by housing discrimination, costing Illinois
taxpayers four million dollars a year in Cook County alone.

35Arnold Rose, De Facto School Segregation (New York:
National Conference of Christians and Jews, 1964), pp. 14-17.







The ultimate solution to the "hard-core" problem of
racial unbalance in schools would obviously be resi-
dential desegregation. Despite the Supreme Court's
1948 decision that restrictive covenants could not
be court enforced, and the introduction since 1958
of an increasing number of "fair housing" statutes
and ordinances, plus the presidential order of 1962
restricting government guaranteed loans for segre-
gated housing, residential segregation is decreasing
very slowly. 6

Summarizing the consequences of the social and eco-

nomic limbo from which there appeared to be no escape, the

Commission on Civil Rights compared the situation to a vi-

cious circle. The Commission said:

The effect of slums, discrimination, and inequalities
is more slums, discrimination, and inequalities. Pre-
judice feeds on the conditions caused by prejudice.
Restricted slum living produces demoralized human be-
ings--and their demoralization then becomes a reason
for keeping them in their place.37

It is this same self-fulfilling prophecy utilized

as a rationale by the majority white society that has caused

a growing sense of alienation among Negro intellectuals

epitomized by writer James Baldwin.38 More plaintively

voiced by Ralph Ellison, author of The InvisibZe Man, is

his succinct description of the Negro human condition.

When a Negro utters the phrase "I'm nowhere," it expresses

the feeling borne by many Negroes that they have no stable,

recognized place in society. Ellison has concluded that


36Ibid., p. 54.

371959 Report, p. 392.
38This is best described in his The Fire Next Time
(New York: Dial Press, 1963).







When Negroes are barred from participating in the main
institutional life of society . they lose one of
the bulwarks which men place between themselves and the
constant threat of chaos. For whatever the assigned
function of social institutions, their psychological
function is to protect the citizen against the irra-
tional, incalculable forces that hover about the edges
of human life . .

And it is precisely the denial of this support through
segregation and discrimination that leaves the most
balanced Negro open to anxiety . he cannot partici-
pate fully in the therapy which the white American
achieves through patriotic ceremonies and by identifying
himself with American wealth and power. Instead he is
thrown back upon his own slum shocked institutions.39


Private Housing Industry Practices:
Mechanisms of Discrimination

American public opinion concerning the housing of

minority groups has deep roots, intertwined as it is with

history and social experience in addition to its pattern of

racial thinking. In a society where the institution of sla-

very has left a stigma on Negroes and where the immigration

of diverse peoples has played an important role in domestic

politics, American attitudes on race have developed.40 The

roots in racially segregated housing are many and there is

a variety of causes. Housing expert Robert C. Weaver has

attributed housing segregation to three major sources: preju-

dice, the influence of upper-class patterns of residential

exclusion, and the fear that minorities will subvert local



39Ralph Ellison, "Harlem Is Nowhere," Harper's Maga-
zine, CCXXIX, No. 1371 (August, 1964), 56-57.

40See C. Vann Woodward, The Strange Career of Jim
Crow (New York: Oxford University Press, 1957) and Oscar
Handlin, Race and Nationality in American Life (New York:
Doubleday and Company, Inc., 1957).





85

residential standards.41 Another likely factor can be drawn

from the comment of Dennis Clark who has stated that "only in

a society rich enough for housing to become a status device

could racial restrictions become so much of a force."42 The

group prejudices of the white population, whatever the cause,

are the basis for the segregation of minority groups; the

actual controls and restrictions are administered by the

housing industry.

Principals in the private housing industry have dis-

claimed responsibility for any part in segregation. Real

estate brokers, builders and mortgage finance institutions

proclaim themselves as neutral agents who serve the public

and are only responsive to the public's needs--or demands.

Their view is that of a business psychology that utilizes a

credo of doctrinaire "free enterprise." In a keenly competi-

tive business field that is not too difficult to enter, the

slogan of free enterprise has an appealing ring, even though

government intervention and aid has permeated the whole hous-

ing industry.43 Shunning any social viewpoint, motivated


41
41Weaver, op. cit., p. 359.

4Clark, op. cit., p. 35.

43Ibid., p. 94.
Because the homebuilding and real estate brokerage
firms have traditionally been easy businesses to enter, there
has been a great deal of chaos and erratic activity in the
economics of the housing market. To bring some order and
stability and better business practices into the industry,
their own so-called regulatory bodies were formed--the Na-
tional Association of Home Builders in the 1940's and the
National Association of Real Estate Boards in 1908. Both







only by business principles for profit, they contend the

responsibility for inducing racial tolerance belongs to

other institutions, for example, the churches and educa-

tional groups. Yet, as the Commission on Race and Housing

has declared: "It is the real estate brokers, builders,

and mortgage finance institutions which translate prejudice

into discriminatory action."44 In the main, their services

are extended to Negroes only under special conditions.

Whatever their motivations and personal convictions on ra-

cial prejudice, the housing industry has the power to make

important decisions concerning access to housing. Their

unwillingness to make their services fully available to the

members of minority groups has had the effect of creating,

for those groups, a separate market in which only a limited

quantity of housing is offered for sale.45



have their codes of ethics, both have helped shape legislation
and property codes at the state and local levels and both of
their national associations maintain effective lobbies in
Washington. Dennis Clark has surmised that though they have
established a minimum of order in the housing industry, it is
the changing technology of homebuilding and the influence of
government programs that are imposing more rational construc-
tion and business procedures. Mass production, government in-
sured mortgages requiring appraisals, and minimum property
standards have dictated basic requirements that must be met.
Ibid., p. 85.

44Where Shall We Live?, p. 22.
In the housing industry, this attitude is not uni-
versal. Morris Milgram, builder of integrated housing devel-
opments and an advocate of open occupancy, has taken a con-
trary viewpoint. Testifying before a housing subcommittee in
1955, he asked the national government to make its position
clear and refuse financial assistance in the form of mortgage
insurance to builders who discriminate. Investigation of
Housing, 1955, p. 615.

45Where Shall We Live?, p. 23.







Real estate brokers

There is no reason to believe that real estate bro-

kers are more racially prejudiced than any segment of the

American population. However, the power exercised by local

real estate associations has led its membership consistently

to practice discrimination. The existing "Code of Ethics"

of the National Association of Real Estate Boards is a modi-

fication of an earlier one which had more blatant racial

overtones. It states that

A realtor should not be instrumental in introducing into
a neighborhood a character of property or use which will
clearly be detrimental to property values in that neigh-
borhood.46

The Code, with its racial tinge, has been current so long in

housing circles that to break it is to be branded a profes-

sional renegade. The broker who would permit Negroes to

purchase in an all-white area faces almost immediate ostra-

cism, if not expulsion.47 The intent of the Code is to


46Quoted in Forbidden Neighbors, p. 157.
Reacting to growing pressure by the federal govern-
ment and many states for an end to racial restriction in
housing, the National Association of Real Estate Boards,
early in 1963, clarified its "Code of Ethics." It was not
accomplished by any change in the actual wording but by the
issuance of a booklet interpreting the "Code of Ethics." A
specific illustration in the booklet is intended to show that
the Code is expansive enough to permit a realtor to make a
sale to a Negro in a white neighborhood. Minneapolis Morning
Tribune, March 16, 1963, p. 3.

47For an account of how a real estate salesman was
dismissed for violating the racial code by selling to Negroes
see U. S. Commission on Civil Rights, Regional Hearings, San
Francisco, California (Washington: U. S. Government Printing
Office, 1960), p. 484. Hereafter cited as Regional Hearings,
San Francisco.





88

enforce uniform action by real estate brokers. Fearing the

reaction of neighborhood residents and colleagues, the bro-

ker will negotiate the sale or rental of property to Negroes

only in areas considered appropriate for minority residence.

To do otherwise, to "break" white neighborhoods, it is

feared, would bring serious harm to their business.48

A family setting out to buy a home is largely de-

pendent upon the services of real estate brokers, home

builders, and mortgage finance institutions. This dependency

has enabled real estate brokers to supplement their concept

of business ethics with practical devices to sustain racial

discrimination by guarding the racial homogeneity of white

neighborhoods. For many years, real estate dealers and ap-

praisers have been taught to value homogeneity and avoid the

hazards of "incompatible groups." College courses in real

estate are even directed toward this end.49 Anything else

would run counter to the traditional beliefs that entry of

nonwhites into a neighborhood damages property values and

brings the danger of a prospective slum area.

Asserting that they do not initiate discrimination

but only follow the wishes of their sellers, there is defi-

nite evidence that brokers generally take a more independent

view of their responsibilities, and will refuse to participate

in transactions which they consider improper, regardless of



48Where ShaZZ We Live?, p. 23.

49Forbidden Neighbors, p. 157.







the wishes of individual sellers and buyers. According to

the Commission on Race and Housing, there is no record of

any real estate board's having announced that introduction

of a minority buyer into a white neighborhood was permis-

sible if the seller were willing.50 Testimony given before

the Commission on Civil Rights has borne this out and promp-

ted Commissioner Hesburgh to assert:

. the information seems to be everywhere that no
real estate broker will say he discriminates. And yet,
in fact, when you get down to the individual people--
minority groups looking for houses--it turns out that
practically every real estate broker they go to says,
for some reason or other, "I can't get you a house ex-
cept in this section of the town."51

Oftentimes, the activities of real estate boards have

gone beyond the scope of mere business transactions. In fact

the boards have taken the lead in defending racial segrega-

tion in the area of public policy.52 Real estate boards have

been the leading opponents to proposed municipal laws against



SWhere Shall We Live?, p. 24.

51Regional Hearings, San Francisco, p. 496.
In the Washington, D. C. hearings in 1962, the Com-
mission sought information from the District's Board of Real-
tors on the willingness of brokers to show homes to Negroes
in white neighborhoods. The president of the Board testified
it was not unethical for a realtor to show a house in a white
area to a Negro if the people in the area wanted to sell to
Negroes. However, the question of whether it was unethical
for a realtor to refuse to show a house to a Negro if the
owner and the people of that area had no objection or if the
owner alone had no objection remained unanswered. U. S. Com-
mission on Civil Rights, Civil Rights U. S. A./Housing in
Washington, D. C. (Washington: U. S-. Government Printing Of-
fice, 1962), p. 13. Hereafter cited as Civil Rights U. S. A.

52Where Shall We Live?, p. 24.







discrimination in private housing in various cities throup!

out the o the real te boa

Sd a nt to re

S e courts ion a t j o

race-restrictive housing covenants53 In 1964 he Cali

fornia al Estate Association back and i a co

tuional referee to neae te ssaBe y te aliforni

le naturee in 63 of the Aord ct. Inown as isi-

on 1, te constitution re in e f

of 164 y a t o one ajori' us proi

biting discrimination on the basis of rac religion or
naial oriin n e sle or renaof liC d pulic]

aassisted cousin nd aa privately fiance multiple dwell

in oith five or more units was revoked ere ,ere in-



rds also had a strong interest in killing the for<

Act as i e first step in a national i to destr Fa
in las in o states and cities that ad adte
ciista1&__tc







associations of real estate men, the real estate boards.

Real estate as a business is controlled largely by white

personnel. Only a few Negro brokers have been admitted to

these associations and only in a few cities.56 Their ex-

clusion, the Commission on Race and Housing has said, tes-

tifies to the racial attitudes of the real estate fraternity

and symbolizes the separate housing market for minority

groups.57 Despite the fact that a few Negroes have been

able to enter the real estate brokerage business, most Ne-

gro "realtists" are excluded from an active role in the af-

fairs of the organization pertaining to that business. The

white real estate boards are insulated from the minority

point of view. This all-white character of the industry

has had deep significance in relation to residential segre-

gation. As Dennis Clark has commented:

The inadequacy of Negro representation in the real es-
tate field has obviously served to entrench the men-
tality which produces discriminatory restrictions.
. .It is a condition for the conduct of real estate
activity along racist lines.58


Home builders

Few private builders, whether utilizing governmental

guarantees or not, will sell on an open, nondiscriminatory

basis. Their most effective and widely used method of ex-

clusion is the simple refusal to sell to Negroes. This


56Civil Rights, U. S. A., p. 14.

57Where Shall We Live?, p. 25.

58Clark, op. oit., p. 86.





92

practice has been normally followed by large-scale builders

such as Levitt and Sons in the number of Levittowns they have

erected. Only a few builders, in various parts of the coun-

try, have challenged the definite racial assumptions and

practices of the home building industry and offered their

products to an unsegregated market. Notable exceptions are

California builder Edward P. Eichler and Morris Milgram of

Modern Community Developers, both considered pioneers in the

building of interracial housing communities.59 Their ex-

perience has confirmed the existence of strong opposition to

interracial housing by other builders, real estate and finan-

cial interests, and local government.60 To allay this formi-

dable opposition, nondiscriminatory builders have sought

sites where the presence of nonwhites would meet with the

least objection.61

The mass-production nature of the home building in-

dustry in the last two decades has magnified the power of


59See Race and Housing, An Interview with Edward P.
Eiohler, President, Eichler Homes, Inc. (The Fund for the
Republic, 1964). See also, Eunice and George Grier, Pri-
vately Developed Interracial Housing: An Analysis of Ex-
perience (Berkeley: University of California Press, 1960).

60Milgram was the developer who wished to build an
interracial community on the outskirts of Deerfield, Illinois.
In this celebrated case, the village government condemned the
land that was to be utilized in building the project for a
public park. After a number of appeals, this action was up-
held by the courts in 1963.

61Despite their attempts, interracial developers have
met concerted opposition in Western Springs, Illinois; Mil-
pitas, California; Rutledge, Pennsylvania, and Creve Coeur,
Missouri when it became known that integrated communities
were being contemplated. See Housing Report, pp. 132-138.







builders to shape the character of communities. Modern de-

velopers build not just houses but communities and by doing

so they have helped to determine the racial patterns of the

developments that have been erected. In creating housing

developments exclusively for whites and others exclusively

for nonwhites, they have intensified residential segrega-

tion. Builders permit nonwhites to buy or rent only in de-

velopments specifically intended for minority occupancy.

Since there are very few of these, the result is to exclude

nonwhites from the larger and better part of the new housing

supply.62

The power of private builders explains the increased

growth of residential segregation in the last twenty years.

Their power is the initial impact of sales as their control

of occupancy here ends. But once a pattern of exclusion has

been established in an entire community, it becomes increas-

ingly difficult to change. Most builders rationalize by

claiming business necessity. They claim that financial in-

stitutions and local governments insist upon racial segrega-

tion as a condition for their cooperation in home building

enterprises.63 The prevalent attitude among builders is

that if Negroes were admitted to a development in a white

area, they would lose their ability to obtain funds to fi-

nance the project or they would be hampered by local govern-


62Where Shatl We Live?, p. 26.

63Ibid., p. 27.






ments from gaining the necessary building permits and ap-

provals that have to be granted by these authorities. A non-

discriminatory policy is considered a business risk which

the large majority of builders have decided not to undertake.


Financial institutions

Mortgage finance institutions have provided major

support for racial segregation by their policy of lending

to nonwhites only in certain areas and refusing to finance

the purchase of housing in white neighborhoods. Since World

War II Negro home buyers have frequently been able to obtain

mortgage funds. However, these funds have been granted under

conditions that have caused Negroes to pay a differential for

their mortgages because of the age and location of the homes

they can purchase. Generally, the mortgage loans they can

obtain are for housing in segregated or depressed neighbor-

hoods. This restriction to certain racial districts is a

serious form of discrimination. It not only serves to sus-

tain segregation but it places Negroes at a disadvantage in

terms of mortgage credit because the properties in the areas

where they can buy are riskier from the lender's standpoint.64


64Ibid., p. 29.
There are notable exceptions to the general condi-
tions described above. The Section 221 program, having the
potential for aiding low-income nonwhites to obtain decent
housing and improve their environment, has worked well in
areas where local FHA offices took special measures to assure
its success. According to the Commission on Civil Rights,
the accomplishments of Section 221 have been striking in some
communities. In Atlanta and Little Rock, the difficult me-
chanics of the program have been unraveled by FHA directors.
Realistic underwriting standards were applied by the local




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