Fair Housing: Problem Ran Deeper than Redlining

CHICAGO – If Robert York was ever bone tired, he didn’t show it. After working two jobs, the father of 11 would return home to his North Lawndale two-flat greystone on Chicago’s West Side and hose down the chalk marks his kids made while playing on the porch.

The home was his prized possession. This was the early 1960s, and like most Black people in the neighborhood who were land contract buyers, York was paying dearly for it – and living in constant fear of losing his home.

Land contract buyers were on the hook for a down payment, high monthly payments and maintenance of the house while the deed remained in the seller’s name until the very last payment was made. A single missed payment was grounds for eviction.

Many working-class Black families in the 1950s and ‘60s were forced to turn to speculative sellers after the government refused to insure mortgages in redlined African American neighborhoods. Speculators often bought homes at a discount from white families as they fled racially changing neighborhoods to sell them months later to Black families at inflated prices and high interest rates.

In the 1950s and ‘60s, 85% of Black families who bought a home in Chicago did so under a land installment contract.

The same financial institutions that denied creditworthy Black buyers were happy to give mortgages to white speculators who then sold them to Black families for double or quadruple what they paid, says Beryl Satter, professor of history at Rutgers University and the author of “Family Properties: Race, Real Estate, and the Exploitation of Black Urban America.”

Discriminatory lending practices, such as land contracts, were not the only barriers Black homebuyers faced. Decades of housing segregation, systemic denial of loans or insurance in predominantly minority areas and a persistent income gap have stood in the way of Black homeownership, curtailing their ability to build generational wealth.

More than half a century after the Fair Housing Act was signed into law in 1968, not only is the homeownership gap between white and Black Americans wider than it was in 1960, the homeownership rate of Black Americans is expected to be lower (40%) in 2040 than it was in 2020 (41%), according to a study by the Urban Institute, a Washington-based research organization focused on upward mobility and equity.

Though some of the structural and systemic issues may have been alleviated after the passage of the Fair Housing Act, financial education and awareness can still limit homeownership for lower-income households (a disproportionate share of whom are Black and Hispanic) or trap them into exploitative transactions.

“The story of Black homeownership in the U.S. is a case where they get access and the access is wiped out, and then they get access and the access is wiped out,” Satter says. “So there’s a cycle where African Americans get either no loans from mainstream banks, which push them into purchasing from scavengers and outlying speculators, or the pendulum swings the other way and they get loans that are official, but they are predatory also.”

For instance, in the decade leading up to the U.S. housing crash of 2008, many banks disproportionately targeted Black and Latino homeowners for sub-prime mortgages.

In 1968 – almost a decade after the Yorks bought their home on contract – a grassroots movement led to the establishment of the Contract Buyers League. The CBL used tactics such as picketing, payment strikes and lawsuits to force many lenders to renegotiate predatory contracts.

On a recent morning, siblings Donald and Sandra York sat on the same porch where they once drew the chalk designs, reflecting on the sacrifices their parents made to become homeowners.

To make ends meet, their mother, Ruby, worked as a midwife, a babysitter and a seamstress. The family of 13 crammed into one floor of the house, renting out the other to help make the monthly installment payments.