In this chapter, I'll be discussing the
US government's role in housing and mortgages
starting in the early 1930s.
In 1933, the US government created the
Homeowners Loan Corporation, which is very important
to the discussion about mortgages and redlining.
In 1934, the government created
the National Housing Act.
There was another Housing Act,
but this one is important.
The first one in 1934, they
created the Federal Housing Administration.
All of these were part of then President Franklin D.
Roosevelt or FDR's New Deal.
There was actually two new deals.
People talk about the New Deal,
but there was two new deals.
It's very important that we recognize FDR during the
Great Depression and everything that he did to rebuild
or save America from the Great Depression.
There's a lot of positive things
that FDR did in this case.
For this course, I'll focus on some of
the negative consequences of the New Deal policies.
The federal government under FDR for the
first time, entered the private housing sector
by financing home mortgages, typically relegated to
the private sector during this period.
Now, before FDR and the New Deal, President Hoover
and all other presidents, previous presidents pretty much practice
what they refer to as lazy, fair economics.
Now, what does that mean?
What that means is that everyone before FDR believed
that the market will correct itself, that the government
should not interfere in private affairs, the government should
not interfere in property rights, the government should not
interfere in housing and mortgages or anything of that
nature, that the market itself will fix these ills
in terms of inequality.
So Hoover, for example, President Hoover before
FDR during the Great Depression or during
the start of the Great Depression.
He didn't do anything.
He didn't intervene to save the banks.
He didn't intervene to save
the mortgages, the foreclosures.
He didn't do anything.
And this lazy, fair economics is literally a
myth in terms of how society works.
Planning is very important because planning
is a form of intervention.
When we have social inequalities, planning can be used
to address those inequalities, to close those gaps.
But like anything, it's a double edged sword.
So planning can be used for good
in creating parks, and it can be
used for bad and creating racial segregation.
So think about it as a tool.
So today, as planners, we can use our planning skills and
tools for good, or we can use it for bad.
In this case, for the government to
intervene, in my expert opinion, it was
necessary because millions of Americans were losing
their homes due to the Great Depression.
Millions were losing their lands, no farms.
They were foreclosing.
There was extremely high unemployment.
So you needed government to intervene to
make sure that the banks would not
close at the rate they were closing.
So for the first time, you see insurance that
the FDR implemented rules and laws that banks needed
to ensure people's monies, because if not during crisis,
they take their money and that creates more crisis.
And there has to be emergency support
for mortgages when there's a crisis, where
the government lends people money at low
interest, where the government helps refinance.
So this is all of these acts and administrations in
regards to housing that took place under this context.
So given that I'm very supportive of these efforts,
not that I was alive during FDR, but given
that I'm a big supporter of government intervening and
helping poor people, helping people in distress, we also
have to recognize some of the negative aspects of
the New Deal with the HOLC.
For example, it created these residential
security maps responsible for redlining neighborhoods
and promoting racial segregation in housing
by using these color coded maps.
Why do they call it redlining?
Where does that come from?
The color red was used to create these maps.
And where there was read, it meant that it
was detrimental influences or it was high risk.
It was a high risk area.
And typically those were places where there were
people of color, Blacks and Latinos and Latinas
Blues, there was low risk and typically it
was privileged whites that live there.
Now let's say there's whites that live in the red
area and working class whites or immigrants, ethnic whites.
So there was a time where Irish,
the Italian people of Jewish religion, they
lived in these working class neighborhoods.
But once the government says, okay, these are detrimental,
we're going to label these as high risk.
What that means is that to get a mortgage in
a high risk area is more expensive than to get
a mortgage in a blue or green area.
So if you're white and if you have a good job, you
want to move out of that red area and move into a
blue or green area and the government will help you.
But if you're black or Brown, you're relegated, you're
trapped in that neighborhood because even if you want
to move, they don't allow you to move because
of discrimination in these white neighborhoods, these so called
undesirable neighborhoods that were marked in red like high
risk, the way the government treated them.
And also real estate agents and banks had to
do what they were most likely to default.
So therefore, we have to increase the rates
in places where whites didn't want to live
there anymore if they were living there.
Also think about it in terms of a
car, like when you have car insurance.
And this is the contradiction of American
capitalism is poor people pay more for
car insurance than rich people.
So if you go to East Los Angeles, where I
grew up, my motherland, and you have a car, let's
just say any regular car, you're going to pay more
in insurance because it's a high risk area than another
person with the same car in Brentwood or Beverly Hills
because it's a low risk area.
So essentially, poor people pay more money in mortgages
to the present in car insurance because of the
area and planners, architects, designers, government real estate, they
were all complicit in these maps, not just in
creating them, but enforcing them.
So what happens as a result?
So what happens when the government says if
you're a white family, you're living in Bohites?
Because there was a time in Bowhites.
Right now, Bowhites is pretty much all Latino.
Latin is like 99% high percentage.
But there was a time in Ball Heights which is
part of East La or in East Los Angeles.
There was a time in the mid 1900
where African Americans live there, Japanese Americans live
there, Jewish Americans live there, Mexicans.
It was like a melting pot.
Everybody from all these beautiful cultures and languages
lived in one place called Boh Heights.
Once the government creates these maps, once these maps
are enforced and a white family wants to buy
a house, they're going to go to the San
Fernando Valley because it's cheaper to buy a house
there than to buy one in East Los Angeles.
So what ends up happening?
You have white flight.
So white flight has to do with during this time period
where there were incentives for whites to leave the inner city
and to go to the suburbs because the suburbs were low
risk and for them to buy a home, their interest rates
were lower and they'll most likely qualify because the government supported
them and so on and so forth.
So during this time period, we're looking at the
1930s, 40s, 50s, which will lead us into urban
renewal, which I'll discuss where it all started with
the FDR, with the New Deal in creating these
agencies and this administration in terms of housing and
the importance of housing and how housing directly influences
racial segregation by having these racial coded maps.
So likewise, what you see is when whites flee the
suburbs, we're looking 1930s, 40s, 50s into the 60s.
Then African Americans and Latinos and Latinas remain
in the inner cities and also Asian Americans
and others, and those places are neglected.
Here's an example of the map in Illinois.
It's hard to see the words here, but the blue and the
green are low risk and then the red are high risk.
Now if you look at these maps and you see
the people that live there, once they were designed, let's
say five years, ten years later, it will pretty much
coincide that where there's red, you have a high percentage
of African Americans living here, and where it's blue and
green, you have a high percentage of whites living there.
If we look at Los Angeles, this is the case.
Los Angeles, even to the President,
is a highly segregated city.
Now, I grew up in East La.
I'm from the East Side, and now I live in West
La because I'm like a big time professor and all that,
and I see the difference in terms of racial segregation.
In other words, when I go to the store
in West L-A-I literally like a year can go
by without me seeing an African American person.
But when you live in a community,
you don't think about it that way.
You just think like, oh, everything's normal
or that's just the way it is.
But there's the history behind this.
And these maps, these color coded maps and how
they were implemented by people that are influential.
Planners, architects, designers, government, real estate agents, banks
create these situations where we see how racial
segregation has been reinforced in this country from
the beginning to the present.
And once again, these maps were looking early
1900, mid 19, hundreds to the 60s, 70s.
And even when they weren't practiced anymore, even when
they stopped using them, those same families that lived
in these places, as I stated before, their wealth
is passed down to their children and their children.
This is another example of a map, a
little closer look in the case of Philadelphia.
And here we can see the way they're labeled in terms
of the green, the Blues best, and the red is hazardous.
So all of the maths were a little different
by place, but it was the same idea.
So when someone says redlining, a lot of
times we just say, okay, that means segregation,
but there's a story behind it.
And that's the story that has to do with
the color red, and it has to do when
they highlight it and they color that section red.
The government designated that's a bad area.
If we're going to give you money, if we're
going to give you a loan, then you're going
to have to pay more in terms of interest.
And for a lot of poor people who can't even
buy a home, they end up staying there because they
can't move anywhere and they end up becoming renters.
But they grew up in this environment.
Their kids attend bad schools.
They end up living in the same environment.
So it's like a cycle of
poverty that repeats itself throughout time.
Now, that's not to say that it happens to everybody.
I grew up poor, and I'm not poor anymore.
I'm not saying that.
What I'm saying is that as planners, whether we're academics,
practitioners, or students, we need to be critical and we
need to look at things historically and critically and not
be simplistic about it and blame the same people that
are in poverty for their poverty.
There's people and there are institutions
that benefit from poverty and segregation.
These are two excellent sources.
One is confronting racism in city planning and zoning.
And the second one is mapping inequality
redlining in the New Deal America.
And in these interactive web pages, you can see if
you just put in a Zip code, it will show
you the neighborhood of the past and even the present
in terms of how these maps work.
And also it gives you an idea of how
racial inequality continues to the present, now, without these
maps, without this history, once again, we come to
simple minded conclusions that people of color want to
live with other people of color.
So that's why they're segregated and the
government had nothing to do with it.
Or if government had something to do with
it, like in the case of slavery or
the race restrictive covenants that happened in the
past, that has nothing to do with today.
So what I argue is that while all of us
are not responsible for anything that happened 100 years ago
because we weren't born, we still benefit from it.
And so those of us who have privilege, those of
us who have some privilege, we need to use that
privilege to educate ourselves and to make sure that we
don't repeat the same mistakes of the past.