1933: The New Deal

While President Roosevelt launched his “New Deal” to aid Americans suffering as a result of the Depression, this deal did not extend to African Americans in equal measure.

In response to the Depression, President Franklin D. Roosevelt, his administration, and the U.S. Congress developed “The New Deal” to reinvigorate the U.S. economy, put people to work, and provide assistance to those who could not work. The Civilian Conservation Corps and the Social Security Administration were two of the many organizations launched by the U.S. federal government as part of the New Deal.

Despite a rhetoric of lifting all, the racialized system within the United States meant that white people gained from these programs more than Black people did. Feagin (2014) found that: 

Black workers continued to suffer much discrimination from the whites who administered the New Deal agencies…in most federal relief programs black workers got lower wages than whites, were employed only as unskilled laborers, and were employed only after whites were. (p. 58)

Housing remained one of the key mechanisms for enforcing the racial divide in America and the very programs created to help poor Americans move up, became the means of keeping Blacks segregated and restricted.

Housing continued to be a problem for African Americans, and in fact, grew worse during the Depression. Feagin (2014) wrote that “New Deal housing programs increased residential segregation areas by restricting the new federally guaranteed home loans to homes in segregated areas and by locating public housing so that it would be segregated” (p. 58). 

To help address the housing shortage, the federal government created two organizations as part of the New Deal. The Home Owners’ Loan Corporation (HOLC) was created in 1933 in an effort to reduce bank foreclosures by helping owners refinance their loans. Similarly, the Federal Housing Administration (FHA), created as part of the National Housing Act of 1934, was also designed to decrease home foreclosures caused by the Depression. Working within the existing racist mindset, however, the FHA supported segregationist policies already dividing many cities. They refused to provide funding to developers unless they committed to exclude African Americans from specific communities. Not only did they manipulate developers, but the FHA 

[R]efused to insure mortgages for black families in neighborhoods—a policy that came to be known as ‘redlining,’ because neighborhoods were colored red on government maps to indicate that these neighborhoods should be considered poor credit risks as a consequence of African Americans living in (or near) them. (Rothstein, 2015, p. 207)

African Americans suffered disproportionately under the Great Depression. The programs created to ameliorate some of the effects of the economic crash benefited poor white people and hurt poor Black people. Housing remained one of the key mechanisms for enforcing the racial divide in America and the very programs created to help poor Americans move up, became the means of keeping Black Americans segregated and restricted.