It should come as a surprise to no one that vacant and abandoned properties, which are located in every area of the state, are a major economic and societal problem. After all, nothing good happens on abandoned property. All too frequently, vacant and abandoned structures become crime centers. They also lower the value of adjacent properties and make it exceedingly difficult to reverse long-term cycles of concentrated poverty in communities that historically suffer economic hardship.
What may surprise the public at large is how official U.S. government policy from more than 80 years ago contributed to the blight of vacant properties that the nation generally — and the Greater Chicago area specifically — experience today.
But that reality was laid bare in a recent report issued by Cook County Treasurer Maria Pappas, entitled “Maps of Inequality: From Redlining to Urban Decay and the Black Exodus.” According to that report, discriminatory federal housing and home loan policies from the 1940s had a number of enduring consequences.
For instance, they played a foundational role in segregating African Americans in communities that were economically disadvantaged and/or environmentally hazardous. They also dissuaded banks from making market-based mortgage loans to middle- and upper-income African Americans. These overtly racist policies then combined to create the economic conditions that resulted in the vast majority of Cook County properties — which are currently subject to the biennial scavenger sale for delinquent taxes her office oversees — becoming vacant or abandoned in the first place.
What’s truly sad is that it should already be common knowledge that federal, state and local housing policies are responsible for all this inequity and economic deprivation. For a primer on how this unfolded, look no further than Richard Rothstein’s book, “The Color of Law,” which should be required reading in every high school. In that text, Rothstein goes into gory detail on how the Federal Housing Administration, created back in 1934, included a “whites-only” requirement for underwriting home mortgage loans, making racial segregation and discrimination the official law of the land.
One of the vehicles the FHA created to ensure federal housing assistance would not go to African Americans generally, nor to desegregated developments specifically, was the Home Owner’s Loan Corporation or “HOLC.” Among other things, the HOLC created a series of color-coded maps which purported to delineate the creditworthiness of communities in every metropolitan area in the U.S.
The communities rated the safest credit risk by the HOLC were designated as green, blue areas were considered desirable, yellow areas were deemed to be in decline and of questionable credit value, whilst red areas were definitively rated as poor credit risks and undesirable.
The HOLC labeled a community as red and hence an undesirable credit risk if it was inhabited primarily by African Americans, even if they were solidly middle-class earners. Rothstein cites one example from St. Louis, when the HOLC categorized the middle-class white suburb of Ladue as green because it had “not a single foreigner or negro,” but ranked the similar, African American middle-class suburb of Lincoln Terrace as red “due to the colored element controlling the district.”
This racist approach to housing policy was followed in every corner of America. Over time, it not only made it difficult for African Americans to obtain home loans and hence begin building property and generational wealth, but also dissuaded businesses from locating or investing in redlined areas, creating a downward economic spiral. This downward spiral was exacerbated by state and local policies that effectuated exclusionary zoning and not only permitted but enforced race-based restrictive covenants in private housing sales for generations.
Fast forward to today. Pappas’ study found that, of about 27,000 distressed properties up for scavenger sale in Cook County, fully 97% were located in communities that were categorized as either red or yellow by the HOLC way back in the 1940s. In other words, communities that official U.S. policy targeted for both racial discrimination and economic disinvestment.
Knowing all that, it becomes clear that it is incumbent on the public sector — at each of the federal, state and local levels — to implement policies designed to redress the economic and social harm prior law perpetrated.
• Ralph Martire, email@example.com, is executive director of the Center for Tax and Budget Accountability, a fiscal policy think tank and the Arthur Rubloff Professor of Public Policy at Roosevelt University.
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July 29, 2022 at 01:23AM