1935: More Red: Redlining and Segregated Housing

1900-1999: A New Divide
Written By Stephanie Brizee

Big Idea

“Redlining” was a phrase that described the color coding system developed by the Home Owners’ Loan Corporation (HOLC) and became one of the primary means of enforcing Black segregation in the housing market, which hindered African American generational wealth development.

What’s important to know?

  1. Residential Segregation: The Home Owners’ Loan Corporation (HOLC) created color-coded maps that determined who could or could not live or own property based on race. The HOLC maps formalized housing segregation by race across the United States.

  2. The Delmar Divide: In St. Louis, the HOLC maps created what has become known as “the Delmar Divide.” This map effectively ensured that all Black people would be forced to live north of Delmar boulevard and all White people would live south. St. Louis still remains a segregated city due to these early policies.

  3. Resistance: Black communities worked together to establish their own realty organizations, loan companies, and publicity mechanisms to work against segregation and find means to engage in the American dream of home ownership.

1: Residential Segregation

As with so many things in the early twentieth century, the HOLC rating system was influenced by eugenics and “race” research that suggested that Black home ownership was financially riskier than White home ownership. Rothstein (2017) noted that “[a] neighborhood earned a red color if African Americans lived in it, even if it was a solid middle-class neighborhood of single-family homes” (p. 64). In short, neighborhoods populated by decedents of English, Germans, Scots, Irish, and Scandinavians were far more likely to be greenlined (FHA loan eligible) than African American neighborhoods, which were usually redlined or yellowlined (non-FHA loan eligible).

The ghettos created by early neighborhood segregation in response to the First Great Migration were solidified and perpetuated through redlining by federal programs meant to assist people in need. The blatant racism of HOLC mapping becomes even clearer in the appraisal notes written for different neighborhoods. One appraiser in St. Louis, justified redlining a middle-class neighborhood for “it had little or no value today … due to the colored element now controlling the district” (p. 64). 

The systemic racism underpinning HOLC maps devastated African American homeownership and generational wealth (wealth and security passed from parents to children) produced by home equity.

Redlined Map of St. Louis, 1935

Source: St. Louis History and Architecture

Feagin (2014) argued that “A great many white families secured their significant family assets as a result of an array of white ‘affirmative action’ programs, including large-scale federal and state homestead acts from the 1860s to the 1930s” (pp. 20-21). He further argued that “Many whites accumulated enough home equity to use later on for start-up capital for businesses or funding education for children and grandchildren” (p. 212). These economic options were not open to people of color who had been legally relegated to sub-par neighborhoods and then told that those areas were now even less desirable because of the federal government’s redlining policy (Rothstein, 2015).

In the St. Louis area, the HOLC maps benefited economically successful white neighborhoods like North Hampton, Clayton, Richmond Heights, and Webster Groves, which were designated green and blue. Likewise, HOLC maps hindered underprivileged African American neighborhoods in midtown and downtown, as well as Carondelet and Tower Grove East, which were designated yellow and red.

The FHA and private financial institutions refused to underwrite mortgages in yellowlined or redlined areas, or did so at exorbitant rates, which contributed to their ongoing cycle of poverty. The U.S. Commission on Civil Rights noted in 1973 that the “housing industry, aided and abetted by Government, must bear the primary responsibility for the legacy of segregated housing… Government and private industry came together to create a system of residential segregation” (Rothstein, 2017, p. 75). 

2: The Delmar Divide

The HOLC maps created what’s now known as the Delmar Divide. The Delmar Divide separates historically underserved areas north of Delmar Boulevard primarily populated by Black residents and greater resourced areas south of Delmar Boulevard primarily populated by white residents. Today, if one superimposes the HOLC housing maps with maps of poverty in the St. Louis area, the result will be an almost identical match—yellowlined and redlined neighborhoods still struggle, while many blue and green neighborhoods thrive. The Mapping Inequality: Redlining in New Deal America (Nelson et al., 2018) project illustrates this reality (Bliss, 2015).

A study published by Washing University of St. Louis noted that it would take an estimated 228 years “for the average African American family to amass the same amount of wealth as the average white family” (Cambria et al, p. 10).

3: Resistance

Newspaper clipping from the Black newspaper, The Advocate (Saturday, December 20, 1918, p. 5) highlighting Black-owned homes in the Portland area.

Image Source: Lang

Black families and communities resisted the segregation and the White created stereotypes that sought to deny them fair housing. They used their own newspapers and community organizations to promote home buying and celebrated Black families accomplishments in purchasing and owning their homes (Lang, 2018, p. 366).

Black leaders also created their own development corporations, often disguising them by including them under the names of existing fraternal orders to avoid attracting White retaliation (p. 368). They formed credit unions and despite challenging circumstances kept them open and operational for years (p. 372).

Black leaders also resisted housing segregation by directly calling out racist practices. The NAACP President in Portland, Oregon, wrote the city realty board after they expelled a realtor for selling a home to a non-White person. She argued that such actions violated the Fourteenth Amendment and requested to speak to the board about the matter (p. 370).

Your Turn

After much hard-won African American wealth was lost to race riots and then the Great Depression, what was the impact of redlining on the economic prospects for African Americans?

Stephanie Brizee
Previous

1933: The New Deal and the Black Cabinet
Next

1937: Segregated Medical Care & The Homer G. Phillips Hospital