When President Lyndon B. Johnson addressed the nation after signing the Fair Housing Act in 1968 he stated that, “Fair housing for all, all human beings who live in this country, is now a part of the American way of life.” The act, while a pivotal part of the civil rights movement, was not an immediate catalyst for change for many states, including Illinois.
There were several reasons why the act didn’t carry the impact Johnson hoped it would. Courtney Q. Jones, President of Chicago’s Dearborn Realtist Board (Realtist) sums up what he believes to be a significant one, “A law made does not always equal a law enforced.”
In short, the new act lacked teeth.
It wasn’t until 1988, a full twenty years after the act was passed, that penalties for violating the housing act were put into place. When congress passed the Fair Housing Amendments Act it transferred control of the fair housing law into the hands of the U.S. Department of Housing and Urban Development (HUD). This change meant that anyone who refused to rent or sell to specific minorities or ethnicities would take a financial hit. In fact, as of August 2016 civil penalties were significantly increased.
Chicago, in particular, was slow to see transformation in the years after the initial Fair Housing Act was put into place. There had already been a long history of redlining and real estate contracts with racially restrictive covenants or agreements that divided the city.
The segregation of Chicago began after World War I during what was known as “the Great Migration”. Thousands of African Americans headed north in search of work and a place to call home. The Chicago Real Estate Board (CREB) responded to the population boom by setting up a Special Committee on Negro Housing in 1917.
CREB’s “solution” was to map out the city block by block for Chicago land owners, stating which areas would accept African American residents and which would be off-limits. This type of discriminatory real estate contract was upheld in the 1926 Supreme Court case Corrigan v. Buckley which allowed white property owners to prevent their land from being sold to “non-whites”
The “redlining” conducted in the 1930s supported the continuing division of Chicago neighborhoods. The Home Owner’s Loan Corporation (HOLC) was formed by the federal government and given the task of stabilizing housing markets across the country. One of the ways that HOLC did this was by producing “security maps” for cities like Chicago that would help banks to understand which areas were considered “bad investments”. The intent was to avoid the rampant foreclosures banks experienced during the Great Depression. However, a “bad investment” was equated with any non-white neighborhood.
Many believe that HOLC’s redline maps were the reason Chicago’s neighborhoods are still racially segregated today. A working report called “The Effects of the 1930’s HOLC ‘Redlining’ Maps” discovered that neighborhoods that were given a lower grade on the map experienced “a marked increase in racial segregation.” They also found a long running decline in homeownership, housing values and credit scores occurred in Chicago neighborhoods that were redlined.
This housing discrimination was supported by the National Association of REALTORS® (NAR), known at the time as the National Association of Real Estate Boards (NAREB), whose code of ethics stated from 1924 to 1950 that “A REALTOR® should never be instrumental in introducing into a neighborhood….members of any race or nationality or any individual whose presence would be clearly detrimental to property values in that neighborhood.”
In 1948, the Supreme Court at last ruled against racially restrictive covenants in the case of Shelley vs. Kraemer. As a result, NAREB revised their code of ethics so that it no longer endorsed racially discriminate selling practices.
However, business proceeded as usual and the ruling did little to head off “The White Flight” Chicago would soon experience. An NBC article, “White Flight By The Numbers” noted that “From 1960 to 1980, Englewood’s white population “plummeted from 51,583 to 818,” according to the Chicago Reporter’s history of the neighborhood. Not even ethnic cleansing in the Balkans achieved the levels of turnover that white flight in Chicago did.”
The Federal Housing Administration supported the white islands of Illinois by subsidizing the building of new subdivisions outside city limits. Subdivisions, whose homes would only be funded if the developers would agree not to sell any of the homes to African Americans. Richard Rothstein, author of the book “The Color Of Law: A Forgotten History Of How Our Government Segregated America” explains how they pulled this off during an interview with NPR.
“It was a federal requirement that they (the developers) get these bank loans only on condition that they not sell to African Americans. And the Federal Housing Administration required that deeds in these homes have what we now refer to as restrictive covenants, prohibitions on resale to African Americans”.
“Blockbusting” was another tactic that originated in Chicago around this time. It perpetuated the “white flight” and took advantage of African American homebuyers. Unscrupulous real estate agents would incite fear in white neighborhoods by staging scenarios that made it appear as though the neighborhood had “turned”.
Many white homeowners responded to blockbusting fear tactics and sold their properties at a very low rate. The properties were quickly turned around and resold them to African American buyers at inflated prices. Additionally, because the FHA would not subsidize loans for African Americans they were forced to buy these overpriced homes with unfair contract loans.
Ultimately, African American homeowner organizations like the Contract Buyers League were formed to protest the exploitive sale of homes to blacks through contract selling.
Beryl Satter, author of the book, “Family Properties” speaks about the negative financial impact contract selling had on Chicago’s African American community in a Chicago Tribune interview. “In Chicago, my father estimated that 85 percent of the properties purchased by blacks were sold on contract,” Satter shares. “He calculated that by selling buildings to housing-starved African Americans on such exploitative terms, speculators were robbing Chicago’s black population of one million dollars a day.”
There was discrimination facing African Americans in the industry as well. In the 1960’s African American Real Estate Brokers in Chicago were not allowed to join the REALTORS® trade association. The response to this exclusion was to form the Chicago’s Dearborn Realtist Board (Realtist), an African American run real estate association that offered needed support and leadership.
President Jones shared, “There was no other organization picking up that fight for people of color. Black membership wasn’t welcomed nor allowed. It definitely bred a need to birth an organization that would fight for people of color.”
African American Real Estate Brokers in the early 1970s, like Frank J. Williams, found that trouble began when they sold homes in white neighborhoods. “We started to get listings, make deals and the community organizations attacked us that first year. Breaking office windows, demonstrating in front of the office. They’d call and jam our telephones all day long. ‘Stop selling in our neighborhood.”
In a video produced by the Illinois Association of REALTORS® (IAR) called, “Fair Housing Makes Us Stronger” Williams reminds us that the goal for fair housing has not changed, “We all want the same thing. We want a nice place for our children to grow up. It’s not just a house. It’s a community. That there are good schools. There’s safety. There’s police protection. Folks take care of their property as best they can.”
When the Fair Housing Act Amendment of 1988 empowered HUD to enforce violations of the act, real turnaround began to happen. But Illinois’s housing industry still struggles with discrimination on many levels today. A February 2018 article by the Chicago Tribune called, “Modern-day redlining: How banks block people of color from homeownership” talks about existing loan discrimination.
Among other things, the article brought to light that the current credit score model home lenders rely on is weighted against the minority homeowner. “(Credit scoring) does not take into account consumer data on rent, utility, and cellphone bill payments,” Republican Sen. Tim Scott of South Carolina wrote in August, when he unveiled a bill to require the federal government to vet credit standards used for residential mortgages. “This exclusion disproportionately hurts African-Americans, Latinos, and young people who are otherwise creditworthy.”
Matt Diffanis, President of the Illinois REALTORS® Association, believes that Illinois needs to continue to take an honest look at it’s past in order to move forward. “We still have work to do. A large part of this work is to keep talking about Illinois’s role in the history of fair housing . The good, the bad, the ugly. We were on the wrong side of history for a time, and it’s important that we talk about that as well as talk about the future we’re fighting for.”
Zeke Morris, Chair, Fair Housing Anniversary Task Force for NAR also hopes that the conversations we’re having today about fair housing continue, even the ones that might make Illinois residents uncomfortable. “Be a little uncomfortable. If we’re gonna grow, you have to learn how to be comfortable with being uncomfortable. If we can do that, we can all move to a different level.”