Opinion: Whites used redlining to hoard the American dream and steal it from Black families

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I spotted my neighborhood on a Des Moines city map from the 1930s as I watched a webinar on redlining. There it was tinted in red. A big D6 marked the spot just beneath the name of my old elementary school. Red meant bad, risky. The neighborhood was labeled D6, the worst designation and “hazardous” for its “colored” laboring class. I felt anger.

The webinar, part of the Iowa History 101 series by the State Historical Society of Iowa, exposed some of the twisted and diabolical tools white people used on behalf of the American government to segregate homeowners by race and advantage whites.

Redlining and the ‘New Deal’

According to Investopedia, the definition of redlining is:

"Redlining is a discriminatory practice that puts services (financial and otherwise) out of reach for residents of certain areas based on race or ethnicity. It can be seen in the systematic denial of mortgages, insurance, loans, and other financial services based on location (and that area’s default history) rather than on an individual’s qualifications and creditworthiness. Notably, the policy of redlining is felt the most by residents of minority neighborhoods."

Kendyl Larson, director of research and planning at the Polk County Housing Trust Fund, and Felicite Wolfe, curator and collections manager at the African American Museum of Iowa in Cedar Rapids, led the webinar. President Franklin Roosevelt’s Home Owners' Loan Corporation was established in 1933 to forestall foreclosures during the Great Depression and created the basis of the mortgage lending industry, they said. The organization created the city survey program and graded neighborhoods on a variety of criteria including housing quality and racial and ethnic makeup, Wolfe said.

“We see this system come out of this area of Depression when President Roosevelt is wanting to boost social safety net and wealth building programs . . . The best way to wealth in this country is home ownership,” said Larson.

Webinar: Iowa History 101: Redlining in Iowa. Screenshot by Black Iowa News.

Federal housing agencies then appraised the risk of neighborhoods in more than 230 cities nationwide, including Des Moines, Dubuque, Davenport, Waterloo, Sioux City, Council Bluffs. The color-coded maps ranked the neighborhoods: A/best/green; B/good/blue, C/fair/yellow and D/bad/red. The colors and numbers associated with the maps “centered around race and ethnicity” and other criteria, Larson said.

“They do serve as a graphic representation of how the legally practiced racial housing discrimination was embedded at state, at federal, at the local levels,” said Wolfe.

“Now the issue occurs is that they weighted ethnic and racial makeup heavier than other criteria,” she said. “And because of that, those areas with Black and ethnic makeup were automatically coded red, which was too risky to insure.”

The maps evolved into an underwriting manual used by bankers, lenders, insurers, builders, real estate agents and local and state government, which factored into ongoing racial housing discrimination and segregation, Wolfe said.

I shook my head. Never again do I want to hear economically disadvantaged neighborhoods discussed as if racial disparities are due to an anomaly or the personal failing of its inhabitants when it was actually the intended result.

Nationwide conspiracy

All white neighborhoods were considered A1 and places where banks were encouraged to invest and give homeowners and businesses the best loans, they said. Certain neighborhoods were used as a buffer to keep out “hazardous” populations — anybody not white by 1930s and 1940s immigration policy — Larson said. Like my family members.

Redlining has since created a racial wealth gap, led to police violence, created underfunded schools and affected the health and nutrition of Blacks, according to the presenters.

“It affects everything in our communities,” Larson said. “It’s extremely interwoven.”

I kept watching through my anger and sadness. Redlining happened because racist white people in the government and banking, insurance and real estate industries discriminated against Blacks and others, and they profited from it. So much for white picket fences. The U.S. government may have created the practice, but whites carried out this evil scheme.

It’s not like the racist practices have ever truly ended, Wolfe and Larson agreed. According to AfroTech, Wells Fargo is under fire for rejecting nearly half of its Black applicants who wanted to refinance their homes, according to an analysis this month of federal mortgage data by Bloomberg, one of many such examples.

According to a video by the Polk County Housing Trust Fund, Blacks in Polk County are denied loans at a rate that is 2.2 times higher than the county’s average. Even today “racial steering,” where realtors manipulate potential homebuyers into certain areas, or away from certain areas due to their race, remains a problem and continues to play a role in housing discrimination, Larson said.

Whites — stoking their own irrational, racist fears — birthed systemic racism. It hurt Blacks then; it still hurts. Except now, many Iowans don’t even want to talk about systemic racism or equity or even learn or read about it — think H.F. 802. Think book banning.

Driving around my neighborhood, I pass by modest homes, nice homes and downright dilapidated ones. Then, a few miles away, I coast through the East Village, an upscale area carefully created by the city of Des Moines. In the 1930s, the area was redlined as a D5. I guess investment and attention can lead to revitalization. For some.

Restrictive covenants

Whites also took other measures to segregate Des Moines and other cities, according to the webinar. Restrictive covenants kept racial and ethnic groups out of neighborhoods. Racially restrictive deeds were also placed on individual homes, Wolfe said.

Like in the Chautauqua Park Historic District on Des Moines’ north side that barred Blacks and Jews.
Or in Cedar Rapids, where a Black doctor Percy Harris faced daunting opposition to building a home in the late 1950s.
Or in University Heights near the University of Iowa, where 241 lots had restrictive covenants stating the lots were "for the sole use and benefit of the Caucasian Race and no lot or parcel shall be sold, owned, or used or occupied by the people of any other race, except when used in the capacity of a servant or helper."

Urban renewal and freeway construction

By the 1950s, segregation in Des Moines was complete, Larson and Wolfe said. Then urban renewal and freeway construction destroyed the booming Black neighborhood known as Center Street.

Through eminent domain, properties were seized to make way for Interstate 235, Larson said, including:

Blacks were paid much less for their homes than whites.
Illegal racially restrictive covenants limited relocation options.
When Blacks found places to rent, the rent was higher than that of whites.
Blacks were also ushered into areas with low property values because of government withdrawal.

“We see that African Americans could only move to certain parts of the city, which were the most disinvested areas which had the lowest property values and really poor condition . . . but then had landlords who would increase their rent based on the color of their skin,” Larson said.

Iowa Capitol. Photo by Black Iowa News.

Center Street was a booming Black business district with jazz clubs I heard about growing up. My mom’s aunt and uncle had a home on Center Street, north of the old Hinky Dinky grocery store, and my family visited on many holidays.

Center Street was seen as “easy pickings,” Larson said. “The government didn't have to spend as much money in these areas because they could get away with destroying these communities and being able to push through them. So this is one of the communities that we are always trying to just show exactly what was taken away because it's had a lasting impact on the Black economy.”

One slide about Center Street during the webinar said it all: “Destroyed by Urban renewal and freeway construction.”

A new development on Sixth Avenue, north of downtown Des Moines, Center at Sixth, by MarKaus Ashworth, an entrepreneur, is a nod to the old Center Street district and plans to continue a legacy of Black business development and community growth.

The schemes often began years earlier during freeway planning. The whites who ran local governments would not allow upgrades or repairs to the homes so when they were ultimately taken in eminent domain, the homeowners would receive less money, she said.

These practices robbed Black families of equity and the opportunities that having that equity would have afforded their families.

State Historical Building. Photo by Black Iowa News.

Looking at neighborhoods with new eyes

Iowa legislators have proposed legislation, H.F. 626, that would allow tax incentives for homeowners in previously redlined areas, but some concerns exist that the bill could promote gentrification, according to the Telegraph Herald.

Recent studies have found that the typical homeowner in a neighborhood that was once redlined has gained 52% less in personal wealth generated by property value increases compared to those in green areas over the last 40 to 50 years, Larson said.

“And we know that Black homeowners are nearly five times more likely to own a home in a formerly redlined area, which in turn results in diminished home equity because they're lower property values and with lower property value increases, and essentially overall, decreased economic or increased economic inequality for Black families,” Larson said.

When it gets reported that just 25% of Black Iowans are homeowners, it shouldn’t prompt sighs and oh mys. The racist machinations of the 1930s worked here and in communities all across the country. So if you drive around your town and think about the differences in neighborhoods and wonder why they’re made up of certain racial and ethnic groups, businesses and construction types, the legacy of redlining helps explain it.

Now when I drive through Des Moines, I think about the inequities caused by redlining, and I resent the neighborhoods that white supremacy coveted and enhanced, and look with sadness at the ones it tried to starve and decimate.

Banner: Des Moines redlining map from Mapping Inequality: Redlining in New Deal America.