A 1969 Chicago Tribune headline said it all: O.B.A. Runs Housing Service to Brake Austin Racial Change.
That change, the reporter wrote, “brought fear and confusion” to homeowners in a neighborhood “long famous for its churches, schools, and community traditions.” That change referred to Black families at the time. By 1969, the article said, Austin was 15% Black.
“Whether they are called panic peddlers, block busters or good businessmen, hundreds of licensed and unlicensed real estate agents have descended on Austin to take advantage of the property movement and some alarmed residents have resisted,” the Tribune reported.
“A group of residents, the Organization for a Better Austin (O.B.A.) have formed a housing referral committee and are striving militantly to keep the neighborhood from becoming totally black.”
The effort appeared to be working, the paper reported.
That was 55 years ago.
The same story, the same dance today? Yes and no.
Statistics show that homeownership in Austin is roughly 41%. In North Lawndale, it’s about 24%. And in West Garfield Park, it’s just more than 28%.
Those figures show that yes, West Siders can and do buy homes. But the number of people who could buy them isn’t where it should be. The reason, as the Tribune story demonstrates, is far more complex than money.
MOVING TO CHICAGO
During the Great Migration, more than 500,000 Black people from the South landed in Chicago, sending the number of African Americans to 33% of the population in 1970 from 2% before the migration north began, data from the Chicago Historical Society’s Encyclopedia of Chicago shows. From 1910 to 1930 alone, the Black population in Chicago increased fivefold, from 44,000 to over 230,000, according to a WTTW report. Most settled along Chicago’s “Black Belt” on the South Side, but the West Side also became a large area for housing Black residents. After World War II, “housing-starved” Black citizens flocked to North Lawndale, making it the largest new Black community created in that period, according to Arnold R. Hirsch in his book “Making the Second Ghetto: Race and Housing in Chicago, 1940-1960.”
The Chicago Defender, the nation’s leading Black newspaper, in its own way, helped recruit these transplants by running stories during this period detailing racial atrocities in the south and promoting a better life in northern cities. Many Black soon-to-be migrants wrote to the paper for advice and information about securing housing and employment, such as in this archived letter from a woman in Greenwood, Mississippi, on April 22, 1917:
“Sir:
I noticed in the Defender about receiving some information from you about positions up there or rather work and I am very anxious to know what the chances are for business men. I am very anxious to leave the South on account of my children but my husband doesn’t seem to think that he can succeed there in business, he is a merchant and also knows the barber trade what are the chances for either? Some of our folks down here have the idea that this Northern movement means nothing to any body but those who go out and labor by the day. I am willing to work myself to get a start. Tell me what we could really do. I will do most anything to get our family out of Barn. Please let this be confidential.”
The promise of an alluring, new life in the north, however, didn’t always pan out.
The 1930s New Deal brought the Federal Housing Administration, whose purpose was to stimulate new home construction, ensure “economically sound” home loans and create lending guidelines outlining which borrowers should be given loans.
The FHA and the Homeowners’ Loan Corporation, however, implemented redlining maps, which classified areas across 200 U.S. cities by relative lending risk — that is, how likely borrowers were to pay home loans back to banks — to determine which areas were worthy of government-backed mortgages and other home lending programs. Places with the highest risk level, D, were often colored with red ink, hence the term “redlining.” Those most redlined: Majority Black neighborhoods.
The FHA also supported racially restrictive covenants, which prevented Black people or members of other racial/ethnic groups from buying a property or parcel of land. As WBEZ’s Natalie Moore reported, remnants of these restrictive covenants linger on property deeds across the Chicago area to this day, such as this one: “The restriction of that no part of said premises shall in manner be used or occupied directly or indirectly by any Negro or Negroes. … except house servants or janitors or chauffeurs employed…” These covenants were outlawed in 1948 and are not enforceable today.
But because of this redlining, residents of Black neighborhoods across Chicago were denied access to credit, and the increasing borrowing costs made homeownership difficult. It also led to housing disinvestment, setting up Black Americans to be generations behind white ones in terms of the wealth that comes with owning one’s home.
But it’s just part of the story.
BLOCKBUSTING THE GREATER WEST SIDE
Much of the West Side wasn’t redlined — the practice was made illegal in 1968, while Austin was still majority white and Black families had begun to move to adjacent neighborhoods. At the time, most of Austin was rated “declining,” one tier above redlined areas.
But neither restrictive covenants nor redlining were the only tactics white realtors and homeowners used to keep Black families from moving into neighborhoods. In the 1940s, Austin was a largely white and somewhat affluent area, one that was growing and attractive to Black residents who were being pushed out from the crowded South Side.
Real estate agents engaged in “blockbusting,” or sowing fear among white homeowners living next to Black families, by telling them these new neighbors would decrease their property values. As the Tribune reported in 1969, one Austin group worked “militantly” to peddle panic so that eventually, white residents sold their property at lower prices. However, Black Chicagoans — whose housing options were limited — were forced to pay inflated prices on those same houses.
White residents in the meantime were promised “something better.” Matt Wilson, economic development planner at the University of Illinois Chicago’s Great Cities Institute, explained the suburbs were sold to white families as a “pure utopia and the greatest human invention ever.” Part of that utopia promise was that the suburbs were mostly off-limits to people of color due to racially restrictive covenants. Enter white flight.
Manufacturers and industries followed white residents to the suburbs, where land was cheaper, Wilson said. As neighborhoods like Austin hollowed out, more houses became vacant, lowering property values in the area and discouraging investment. Meanwhile, blockbusting caused home values to drop by 14% from 1950 to 1980 in majority-Black neighborhoods, according to a study by the Chicago Federal Reserve.
“The downward pressure on housing prices came from the onerous financial positions in which blockbusters left new Black residents. Significantly marked up sales prices likely contributed to highly elevated foreclosure rates among those who dealt with blockbusters,” the authors wrote. “The results depict the challenges faced by new Black homeowners in building wealth through housing at the moment many likely became homeowners for the first time.”
Government initiatives like the 1977 Community Reinvestment Act, which required banks to meet the credit needs of low and moderate-income depositors, tried to alleviate the effects of discriminatory housing practices. But disinvestment in these neighborhoods persisted.
Much of this was by design from the city. As ProPublica reported in 2020, after the 1968 riots, the city never created a comprehensive plan to revitalize Madison Street in East Garfield Park, one of Chicago’s poorest neighborhoods, and former Mayor Lori Lightfoot even left it out of her West Side reinvestment plan.
DISINVESTMENT AND HOMEOWNERSHIP
Disinvestment leads to inadequate infrastructure and parks, low commercial development and poor schooling – all of which drive property values down.
“Why invest in North Lawndale when I can take the same amount of money and go out to Oak Park?” said Lionel Kimble Jr., vice president and executive director of the Research and Policy Center at the Chicago Urban League.
For example, Wilson said, while banks may not directly discriminate based on race, practices like avoiding investment in certain neighborhoods deepens the racial divide.
“(Banks) more indirectly (discriminate) through either not seeing certain neighborhoods as good investments or they don’t want to get involved in certain neighborhoods,” Wilson said. “They’re systematically isolating some populations from lending.”
It’s not just banks who have avoided neighborhoods that have experienced historic disinvestment. Affluent people moving to the city are most likely to choose an affluent neighborhood, bringing their income and spending power with them. The result is concentrated wealth – and homeownership – in areas like the Loop and the North Side of the city.
Black Chicagoans, on the other hand, are concentrated in areas experiencing disinvestment, with lower home values, less access to loans and fewer opportunities for homeownership.
“As a result, the financial resources that the house can provide between the average white family and the average Black family has disparate returns,” said Kimble. “So Black homeownership, while still a path into the middle class, doesn’t allow Black people and white people to appreciate what middle classness in Chicago means on equal levels.”
Not only have Black residents faced greater difficulty buying a home, but they have also disproportionately experienced foreclosure. The financial crisis of 2008 and the resulting real estate crash is an example.
That year, the average foreclosure rate in Chicago was 2.9%. Lincoln Park, which is nearly 80% white, experienced a foreclosure rate of 0.4%, with Lakeview at 0.7%. In contrast, Austin, North Lawndale, and West Garfield Park all experienced higher-than-average foreclosure rates: 5.9%, 7.2% and 7.6%, respectively.
One reason for those higher foreclosure rates is that Black and Latino homeowners were more likely to have loans with high-interest rates, or subprime loans.
Subprime lending is a predatory practice banks employed to the detriment of Black and Latino homeowners across the country. By 2006, 54% of African American and 47% of Hispanic mortgage holders had subprime loans, according to the Joint Center for Political and Economic Studies. These mortgages were extremely difficult to pay on schedule, causing many to lose their homes — and their wealth. In 2005, the median net worth for Black families was a little over $12,000, according to the Pew Research Center. By 2009, it was less than half that.
As a result, most families of color haven’t been able to accumulate wealth through homeownership in the same way white families did, which contributes to homeownership disparities today.
Next up: But that doesn’t mean homeownership is out of reach for people of color. In January, we’ll explore the policies that helped break down historical barriers for those on the Greater West Side and demonstrate how owning a home is within reach as we continue our yearlong series.
For an online supplement to see maps and other archived materials, visit: