Separate and Unequal: The Housing Act of 1968 and the Section 235 Program Author(s): Kevin Fox Gotham Source: Sociological Forum, Vol. 15, No. 1 (Mar., 2000), pp. 13-37 Published by: Springer Stable URL: http://www.jstor.org/stable/3070335 Accessed: 16-08-2016 21:33 UTC Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at http://about.jstor.org/terms JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact support@jstor.org. Springer, Wiley are collaborating with JSTOR to digitize, preserve and extend access to Sociological Forum This content downloaded from 134.193.117.53 on Tue, 16 Aug 2016 21:33:53 UTC All use subject to http://about.jstor.org/terms Sociological Forum, Vol. 15, No. 1, 2000 Separate and Unequal: The Housing Act of 1968 and the Section 235 Program1 Kevin Fox Gotham2 In recent years scholars have identified racial disparities in wealth and home ownership as crucial factors underlying patterns of racial inequality and residential segregation in American metropolitan housing markets. While numerous federal housing policies have been identified as responsible for reinforcing residential segregation and racial inequalities in home ownership, little re- search has focused on the segregative effects of the Section 235 program. As one component of the 1968 Housing Act, Section 235 was designed to shift the focus of federal housing policy away from dispensing aid to local housing authorities for building public housing to providing direct supply-side subsidies to the private sector to stimulate home ownership for nonwhites and the poor. Archival and census data, government reports and housing analyses, and oral histories and interviews are used to examine the segregative effects of the Section 235 program in Kansas City, Missouri from 1969 through the early 1970s. Findings indicate that while the housing subsidy program allowed a vast majority of participating white families to purchase "new" housing in suburban areas, mostparticipating African American families purchased "existing" homes located in racially transitional neighborhoods in the inner city. These findings corroborate recent research showing how the market-centered focus of federal housing policy has impaired the ability of African Americans to accumulate wealth through home ownership and reinforced racially segregative housing patterns. KEY WORDS: racial disparities; wealth; home ownership; racial inequality; residential segregation; housing market; federal housing policies. 1An earlier draft of this paper was presented at the American Sociological Association annual meeting, San Francisco, August 1998. 2Department of Sociology, Tulane University, 220 Newcomb Hall, New Orleans, Louisiana 70118; e-mail: kgotham@mailhost.tcs.tulane.edu 13 0884-8971/00/0300-0013$18.00/0 ? 2000 Plenum Publishing Corporation This content downloaded from 134.193.117.53 on Tue, 16 Aug 2016 21:33:53 UTC All use subject to http://about.jstor.org/terms 14 Gotham INTRODUCTION This paper examines the segregative effects of the Section program initiated by the Department of Housing and Urban (HUD) during the late 1960s and early 1970s. As one compon 1968 Housing Act, Section 235 was designed to shift the focu housing policy away from dispensing aid to local housing aut building public housing to providing direct supply-side subs private sector to stimulate home ownership for nonwhites an Many scholars, government officials and agencies have argue housing subsidy programs failed to achieve the intended goal of s home ownership for low-income people and reviving inner ci of "abuses" by unscrupulous private real estate agents and le House of Representatives, 1970; Schafer and Field, 1973; Lief 1987; Quadagno, 1994). While the pattern of abuse and sc Section 235 program has been well documented and understood no one has detailed the actual segregative effects of the progr level. This research examines the local operation and implem the Section 235 program to determine how this federal housi reinforced patterns of racial residential segregation despite th federal and local fair housing statutes and antidiscrimination on the racial dynamic of this federal housing program to il connection between white wealth accumulation, African-Am erty, and federal policy. My research draws on archival and census data, governme and housing analyses, and oral histories and interviews with lo who had firsthand knowledge and experience with the local imple of the Section 235 program during the 1970s. I argue that the dis operation and implementation of this housing subsidy program ple of the "racialization of state policy." Oliver and Shapiro (1 concept "racialization of state policy" to refer to how federal historically impaired the ability of African Americans to acqu generate wealth (see also Bonilla-Silva, 1996; Winant, 1994:58Winant, 1986). Specifically, Oliver and Shapiro argue that the actions of the U.S. government, including housing subsidy a programs, have promoted home ownership, land acquisition accumulation for whites but not for African Americans. Others have docu- mented the racially unequal distribution of government resources including the segregative intents and effects of public housing site selection and tenant selection (Massey and Kanaiaupuni, 1993; Keating, 1994; Bratt, 1986), federal urban renewal clearance activities (Weiss, 1980; Kleniewski, 1984), large-scale highway building (Mohl, 1993), and the home mortgage pro- This content downloaded from 134.193.117.53 on Tue, 16 Aug 2016 21:33:53 UTC All use subject to http://about.jstor.org/terms Separate and Unequal 15 grams of the Federal Housing Administration (FHA) and the Veterans Administration (VA) (Massey and Denton, 1993; Squires, 1993; Feagin, 1994). Thus, a vast array of scholarly research indicates that whites are the overwhelming beneficiaries of federal programs and policies while nonwhites, especially African Americans, generally have been excluded from participation in state sponsored housing, finance, and education opportu- nities. Racial residential segregation and discrimination have been sources of concern to scholars and public officials in cities throughout the United States. These issues are particularly salient in Kansas City, which has been identified as one of the nation's hypersegregated metropolitan areas due to the high degree of segregation in housing patterns on a range of indices (Massey and Denton, 1993:75-77). While Kansas City's urban core has less than 25% of the region's population, it is home to over 60% of the region's African American residents (Mid-American Regional Council, 1993). According to 1990 census data, almost four out of every ten core residents are African American compared with less than one in ten in the suburbs. More importantly, more than 70% of Kansas City's poor African Americans live in areas where at least 20% of the population live in poverty (MidAmerican Regional Council, 1993). In 1992, the ratio of black to white rejection rates for home mortgages was found to be the second highest in the nation, behind Chicago, and ahead of Philadelphia, Atlanta, and Detroit (Wall Street Journal, 11/30/92). Local public officials and journalists have acknowledged the deleterious effects of the racial segregation in area schools and housing, the loss of manufacturing jobs, and increasing blight and rising poverty, while downtown redevelopment and suburban growth have been taking place (Abouhalkah, 1994a, 1994b; Katerndahl, 1992; Thomas, 1990; Stephens, 1985). As in other U.S. metropolitan areas, the problems of racial inequality in employment, education, and housing are linked to a complex web of factors including large-scale economic change, federal housing policies, and discriminatory real estate practices. In this paper, I use the concept "racialization of state policy" to examine the local implementation and segregative effects of HUD's Section 235 housing subsidy program. I begin by discussing the role of the FHA in developing the modern home mortgage system, which enabled middleincome white families to become homeowners while segregating African Americans in deteriorating inner cities. Next, I examine the significance of the 1968 Housing Act, which served as a powerful catalyst for the development of federal housing subsidy programs to stimulate home ownership for low-income people and to ameliorate the deleterious effects of residential segregation. I then discuss the local operation of the Section 235 program in Kansas City, Missouri. Drawing upon archival and census data, government This content downloaded from 134.193.117.53 on Tue, 16 Aug 2016 21:33:53 UTC All use subject to http://about.jstor.org/terms 16 Gotham reports and housing analyses, and oral histories and interviews,3 I show how the housing subsidy program reinforced patterns of residential segregation and contributed to racial turnover and disinvestment in city neighbor- hoods from 1969 through the early 1970s. Finally, I connect empirical findings with recent scholarly debates surrounding the interconnectedness and mutually reinforcing character of federal housing policy, racial inequality in home ownership, and racial residential segregation. RACIAL RESIDENTIAL SEGREGATION AND THE DUAL HOUSING MARKET In the last decade or so, a number of scholars have turned t tion to explaining the magnitude and tenacity of racial residen tion and discrimination in U.S. metropolitan housing market and Denton, 1993; Oliver and Shapiro, 1995; Feagin, 1994). Wh demographic forces and urban structural characteristics have b fied as responsible for the persistence of segregation, very litt has been devoted to exploring the segregative effects of feder policies and programs, and private real estate activity. Both Sq and Hutchison (1993) note that the institutional structure of h its relationships with broad economic and political forces is a searched area of sociological inquiry. This is a significant om the fact that housing not only provides social status, access to tion, and other resources, but is an important factor structur relations, public policy, and spatial patterns of investment and dis (Squires, 1993; Achtenberg and Marcuse, 1986; Bratt et al, 19 tion to schools and jobs, housing also affects the quality of pub one has access to, such as fire and police protection, parks and and transportation. As a number of scholars have asserted, all housing-related a been conducted principally through a free-market vision of economics (Florida and Feldman, 1988; Hays, 1985; Bratt e Squires, 1993; Feagin and Parker, 1990). Traditionally, housin estate practices have praised the merits of rugged individualism an entrepreneurship, but in effect, have reinforced and perpetuat porate interests and social inequalities. Hays (1985:16-18) (1993) identify three major ideological assumptions that domin duction, distribution, and consumption of housing in the Un 3To protect the confidentiality of interviewees, pseudonyms are used for non quoted in the paper. This content downloaded from 134.193.117.53 on Tue, 16 Aug 2016 21:33:53 UTC All use subject to http://about.jstor.org/terms Separate and Unequal 17 First, because the desire for material well-being drives human productivity, the housing market must encourage and reward acquisitiveness and competiveness. Second, "the free market is the most effective and least coercive mechanism for allocating goods and services since it harmonizes individual self interest with society's collective development." Third, "government's role is to reinforce and supplement the market in regulating exchange in a manner that maximizes individual freedom and choice" (Squires, 1993:136). Taken together, these beliefs form the dominant housing market ideology in the United States. In addition to a free-market ideology and a state policy of laissez faire, the various economic and political dimensions of housing-related activities have been conducted through an organized and interconnected system of racial discrimination. As decades of research on housing and real estate have revealed, racial discrimination has been, and continues to be, an institutionalized and persistent feature of the housing industry that cuts across a variety of public agencies, private firms, and includes landlords, homeowners, bankers, real estate agents, and government officials (Weaver, 1948; Abrams, 1955,1965; Helper, 1969; Orfield, 1975; Massey and Denton, 1993; Feagin, 1994; Yinger, 1995). Racial discrimination in housing today is somewhat different than it was decades ago. State and federal laws make official discrimination illegal and a few African American families now live, or have tried to reside, in historically white neighborhoods in almost all U.S. cities (Keating, 1994; Darden, 1987; James, 1994; Grigsby, 1994). However, informal patterns and institutionalized mechanisms of housing discrimination remain a persistent and undeniable characteristic of American society (Feagin, 1994; Goering, 1986). Given the widely shared and entrenched market-centered ideology and racist assumptions governing housing, it is not surprising that the result has been a series of housing-related policies and practices that reflect and reinforce residential segregation. A number of scholars have identified the existence of a dual housing market in U.S. cities where racial minorities (especially African Americans) are served by a different set of housing and real estate practices than are whites (Bullard and Feagin, 1991; Molotch, 1972; Bullard et al., 1994). Much research has examined how this dual housing market has reinforced and perpetuated racial segregation and inequality through the use and enforcement of restrictive covenants, racial steering, blockbusting, and the redlining activities of private and public mortgage lending agencies and real estate firms. Moreover, it has been found that housing prices and rents are generally higher for African Ameri- cans than whites (even when income is controlled for), and that conventional loans for home purchases and remodeling are available to whites while African Americans are forced to buy with cash, on contract, or This content downloaded from 134.193.117.53 on Tue, 16 Aug 2016 21:33:53 UTC All use subject to http://about.jstor.org/terms 18 Gotham through federal loan programs (Squires, 1993; Squires et al., 1991; Squires and Velez, 1987; Helper, 1969). Similarly, a vast array of housing data indicates that whites are the overwhelming beneficiaries of single-family suburban housing, while African Americans and other racial minorities are likely to be restricted to multifamily projects, conventional public housing units, and deteriorating and substandard housing in inner cities (Massey and Kanaiaupuni, 1993; Keating, 1994; Bratt, 1986). One result of the racially unequal housing market is that African Americans and whites face different structures of investment opportunity, and edu- cational and employment opportunities-all of which have been affected historically by federal housing policies and tax subsidies. A core argument of this paper is that while private land-use actors such as builders and developers, real estate brokers, and mortgage lenders make crucial decisions regarding where housing will be built and for whom, it is state activity at all levels that circumscribes and conditions private land-use actions and decisions, as well as channeling urban investment and disinvestment into some areas rather than others. The actions of builders and developers are conditioned by zoning laws, building codes, and other local building ordinances. Banks and other mortgage lending and insurance agencies are regulated by one or more state government or federal agencies. The real estate broker and agent are required to be licensed by the state and are tied to an ethical code in business transactions with home buyers and seekers. Finally, the courts are sanctioned to enforce all contractual agreements and arrangements in the sale or leasing of housing and real estate (Feagin and Parker, 1990). By focusing on the historical development of federal housing policy in general, and the Section 235 program in particular, I intend to examine and explain how racial inequalities in housing have been, and continue to be, reinforced by the market-centered orientation of federal housing policy. BACKGROUND The FHA and Racial Residential Segregation The creation of the FHA through the Housing Act of 19 the beginnings of federal involvement in housing and finance subsidizing suburban development. Designed and run by rep of the real estate and banking industries, the FHA was crea purpose of salvaging the home building and finance industr collapsed during the Great Depression (Weiss, 1987: ch. 6; J Bradford, 1979; Keith, 1973). The FHA, and later the VA, lo down payments from 30% to less than 10%, established minimum This content downloaded from 134.193.117.53 on Tue, 16 Aug 2016 21:33:53 UTC All use subject to http://about.jstor.org/terms Separate and Unequal 19 for home construction, and eliminated lending institutions' risk in providing mortgage financing by lowering interest rates (Federal Housing Administra- tion, 1958; Radford, 1996:179-180). This federally guaranteed, low down payment program favored the building of single-family housing, new construction in the suburbs, home ownership, and the preservation of racially homogenous neighborhoods (Jackson, 1985: ch. 11; Gelfand, 1975: ch. 6; Orfield, 1975; Grier, and Grier, 1971; Abrams, 1965; McEntire, 1957). According to the FHA's Underwriting Manual, Agency personnel were warned not to insure mortgages on homes unless they were located in "racially homogenous" white neighborhoods, and removed from blighting influences such as poor schools and older housing (Federal Housing Administration, 1936, 1938, 1946, 1952). Neighborhoods most likely to be insured were those in which local laws and land-use regulations would guarantee "relative economic stability," "adequacy of transportation," and "protection against adverse influences" including "inharmonious racial groups" (Weiss, 1987; Radford, 1996; Jackson, 1985: ch. 11). More importantly, the FHA helped institutionalize a racially separate and unequal system of home financing that favored suburban building for whites while precluding insurance for homes in racially mixed and nonwhite neighborhoods in the inner city. The FHA alerted land developers and realtors that "[i]f a neighborhood is to retain stability it is necessary that properties shall continue to be occupied by the same social and racial classes. A change in social or racial occupancy generally leads to instability and a reduction in values" (FHA, 1936:233). Local and national real estate boards followed the lead of the FHA in adopting a code of ethics stating that "a Realtor should never be instrumental in introducing into a neighbor- hood . . . members of any race or nationality . . . whose presence will clearly be detrimental to property values in that neighborhood" (Helper, 1969:201). Agency officials, realtors, land developers, banks, and appraisers all embraced the belief that the highest appraisal value goes to homes in all-white neighborhoods, with descending values to homes in racially mixed neighborhoods, with all-black neighborhoods being at the bottom. Although the FHA removed explicitly racist language from its manuals in the 1950s, private appraisal associations continued to use such language through the 1970s.4 As a result, the housing policies and practices of the 4As late as 1977, private appraising manuals still contained listing of ethnic groups ranked in descending order from those who are most desirable to those who have the most adverse effect on property values. Whites were ranked at the top of the list while African Americans and Mexican Americans were ranked at the very bottom (Missouri Housing Development Commission. August 1977. Housing and Neighborhood Investment. Part VI. An Analysis of Underwriting and Appraisal Practices and Their Impact on Credit Availability. Prepared by Ochsner and Associates. X1458. Box 206. Arthur A. Benson. Legal Papers. KC 250. Western Historical Manuscript Collection-Kansas City [WHMC]). This content downloaded from 134.193.117.53 on Tue, 16 Aug 2016 21:33:53 UTC All use subject to http://about.jstor.org/terms 20 Gotham FHA influenced lending and home mortgage financing decades after World War II, thus subsidizing suburban housing construction, contributing to and exacerbating neighborhood deterioration in inner cities, and institution- alizing the segregative and discriminatory housing market on a national scale (Massey and Denton, 1993; Weiss, 1987:59; Checkoway, 1984:162; Abrams, 1965:61; Oliver and Shapiro, 1995:39-41). HOUSING ACT OF 1968 AND HUD'S SECTION 235 PROGRAM By the late 1960s, it was clear to housing activists and civil righ around the nation that the federal housing programs of the F major causes of inner city disinvestment, suburbanization, and segregation (Grier and Grier, 1971; Denton, 1967; National Com Against Discrimination in Housing, 1968; Abrams, 1965: ch. 14). of governmental commissions investigating the social problems disinvestment and racial polarization in cities, including the Nat mission on Urban Problems, the President's Committee on Urba and the U.S. Commission on Civil Rights, agreed that the natio woes were either directly or indirectly linked to the market-cente and practices of the FHA (Mitchell, 1985:12). Throughout the decades, FHA officials and private real estate agents, brokers, a and lenders throughout the nation repeatedly denied that racist motivation shaped their decisions and actions (Helper, 1969 Supreme Court had outlawed the enforcement of racially restri nants in 1948, and fair housing and civil rights legislation pass the 1960s required the FHA to cease its discriminatory practices the FHA had supposedly adopted "racial neutral" policies during and later, the agency continued to stress the value of racially h neighborhoods and refused to take affirmative steps to ameliora tial segregation (Quadagno, 1994:23; Massey and Denton, 19 Hirsch, 1993; Squires, 1993). By the late 1960s, the FHA was un by civil rights groups, housing activists, and elected officials, who that the federal government take action to revive the inner ci stock and aid poor people and nonwhites in their search for quality (Quadagno, 1994: ch. 4; Denton, 1967; Abrams, 1965: ch. 14). W FHA acknowledged that new approaches and policies were address the housing problems of nonwhites and the poor, the agenc ued to adhere to the long-standing belief that the private secto responsible for the control and implementation of federal hous (Hays, 1985:85-89). The 1968 Housing Act shifted the focus of federal housing polic This content downloaded from 134.193.117.53 on Tue, 16 Aug 2016 21:33:53 UTC All use subject to http://about.jstor.org/terms Separate and Unequal 21 from dispensing aid to local housing authorities for building public housing to providing direct supply-side subsidies to the private sector to stimulate home ownership for the poor (Schafer and Field, 1973; Hays 1985: ch. 5; Mitchell, 1985). After years of underwriting mortgages for middle-income, mostly white, families in the suburbs, the 1968 Act required the FHA to shoulder the risk of making loans to moneylenders in inner city areas. Proposed and written by a coalition of real estate and banking officials, the Housing Act of 1968 initiated two new housing subsidy programsSection 235 and 236-to attract private lenders and developers to participate in supplying low-cost housing for poor people. The 1968 Act directed the FHA to relax standards so that the poor could obtain mortgages for home ownership (Section 235) or rent subsidies (Section 236) to move into affordable apartments rather than public housing. The specific intent of Section 235 was to assist low- and moderateincome families with an annual income between $3000 and $5000. Eighty percent of federal funding for the program was authorized for families earning less than 135% of the local maximum limit for admission to public housing. Maximum mortgage amounts under the program were $15,000 ($17,5000 in high-cost areas) for single-family units and $17,500 ($20,000 in high-cost areas) for single family units where the family receiving the mortgage contained five or more members. Mortgage payments were available to new or substantially rehabilitated housing, but restricted to oneand two-family houses, and single units in a condominium. Eligible lowand moderate-income families were to pay at least 3% of the cost of acquisi- tion and contribute a specified amount of income toward servicing the mortgage debt. If a family's income rose about $5000, the housing subsidy would be gradually readjusted downward until the until the family could assume responsibility for the full mortgage payment. These federal guidelines allowed families to remain within the program as their incomes rose above $5000. Subsidy payments would terminate if the family's income reached the $7200 level. In addition, the Section 235 program provided lending institutions with mortgage insurance and reduced the homeowner's housing costs by making payments directly to the lenders on behalf of the owners. By substituting an "acceptable risk" requirement for the "economic soundness" requirement in previous FHA loan policies, the new legislation was supposed to eliminate the financial barriers that had locked poor people out of the housing market. According to Hays (1985:113), supporters of the Section 235 program "were concerned that the economic soundness criterion erected an arbitrary barrier around inner city areas, since it was based as much on the location of a house as its physical condition." Backers of the program intended for the FHA "to remove this barrier and bring its exper- This content downloaded from 134.193.117.53 on Tue, 16 Aug 2016 21:33:53 UTC All use subject to http://about.jstor.org/terms Gotham 22 tise to bear on inner city problems, with a reasonable relaxation of standards to reflect inner city conditions" (see also pp. 112-120). Home mortgages were insured by the FHA through a special risk insurance fund that was intended to protect the lending institution against foreclosures. Thus, the program was to "encourage private money sources to extend mortgage funds rather than have the government do so as it did under the below market interest programs" (Schafer and Field, 1973:460). The significance of the 1968 Housing Act was that it "allowed private capital to transfer the risk of financing inner city housing to the FHA, in the process creating a lucrative new market that was almost totally unregulated" (Quadagno, 1994:106). LOCAL IMPLEMENTATION AND SEGREGATIVE EFFECTS Between 1969 and 1974, HUD administered its Section 235 in the Kansas City metropolitan area, combining single-family insurance and mortgage subsidies to lenders to enable low-incom to purchase homes. Section 235's two component programs inv isting" (usually foreclosed) and "new" homes built by HUDdevelopers. Table I shows Section 235 housing by location a housing in metropolitan Kansas City. According to this table, the vast majority of new construction through Section 235 was in the suburban areas (72.4%) while o of new housing was located in central city Kansas City, Misso 6.5% of housing located in the suburbs was existing housing wh of existing housing was located in Kansas City, Missouri. The la housing in the central city may be explained by a lack of ava Table I. Section 235 New Construction, Existing Units, and Substantia Rehabilitation in Metropolitan Kansas City, 1969-1972a KCMO Suburbs Total New construction 361 (27.6%) 945 (72.4%) 1306 Existing housing 861 (93.5%) 60 (6.5%) 921 Subst. rehabilitation 52 (89.7%) 6 (10.3%) 58 Total 1274 aSource: 1011 2285 Department o Cleaver, William A., and of the FHA 235(i) Progr Unpublished Manuscript II. Legal Papers. Western KCMO stands for Kansas This content downloaded from 134.193.117.53 on Tue, 16 Aug 2016 21:33:53 UTC All use subject to http://about.jstor.org/terms 23 Separate and Unequal However, there is no apparent reason why more existing housing was not financed through the program or located in suburban areas. A 1971 study of the Section 235 program by the U.S. Commission on Civil Rights found that the program perpetuated racial residential segregation in St. Louis, Philadelphia, Denver, and Little Rock (U.S. Commission on Civil Rights, 1971). The study found that most new Section 235 units were being built in the suburbs and were being purchased by white buyers, while most existing and substantially rehabilitated units located in racially transitional areas were being purchased by minority buyers. HUD data on the Section 235 program in Kansas City corroborates the findings from other cities. Table II shows Section 235 housing by race of purchasers in metropolitan Kansas City from August 1971 through March 15, 1972. According to this table, 80.1% of the participating white families, typi- cally young couples with children, bought new homes, the majority of which were in suburban areas. In contrast, 90.4% of participating African Americans families (typically single females with children) purchased existing homes, the vast majority of which were located in central city Kansas City, Missouri. Only 19.9% of participating African American purchasers bought new housing, while only 9.6% of participating white families purchased existing housing under the Section 235 program. HUD began to include race of purchaser on Section 235 application forms in August 1971 and this information was reported on only 398 cases out of 642 (62%). Although HUD did not keep systematic data on the race of Section 235 participants, addresses of where participants located show that almost all of the existing homes in Kansas City, Missouri, purchased through the housing subsidy program were in virtually all-black census tracts. In contrast, addresses of almost all new homes in the suburbs purchased through the Section 235 program were in virtually all-white census tracts. Figure 1 shows the dramatic focus and concentration of Section 235 homes in several city neighborhoods that underwent rapid racial transition from almost all-white to predominantly African American during the 1960s Table II. Section 235 Housing by Race of Purchasers in Metropolitan Kansas City, 1971-1972a African American White Total New construction 56 (19.9%) 225 (80.1%) 281 Existing housing 104 (90.4%) 11 (9.6%) 115 Subst. rehabilitation 2 (100.0%) 0 (0.0%) 2 Total 162 236 aSource: 398 Same as Ta on only 398 cases ou through March 15, This content downloaded from 134.193.117.53 on Tue, 16 Aug 2016 21:33:53 UTC All use subject to http://about.jstor.org/terms 24 24 ~~~~~~~~~~~~~~Gotham 5I.i~~ ~ itZ ~~S'~ 7.j' - ~ 25th Street ..1 Z 4-- \~ ~~~ ~ ~~~ hk.e T, t 4 .S -e -7~~~~~~~~~~~~~.- I ~~~~~~~~~~y - Lf-..~~~~~~~~~- ~ t.j1 *~ s~ e~ - - -~ -.~. ~. .~. 75th Street Fig. 1. Location of Section 235 families. and 1970s. This map is bounded by the Kansas-Missouri state line on the west, 25th street to 75th street on the north and south, and the Blue River on the east. HUD data indicate that from 1969 through mid-1972, the Section 235 program introduced 475 low-income families into existing hous- ing located in a mere eight square mile area east of Troost Avenue on Map 1 (Kansas City Star, 8/28/72:1). HUD data do not indicate the race of Section 235 families who moved into this eight square mile area, but addresses of where participants located indicate that this area underwent rapid racial transition at the height of the Section 235 program. Census data indicate that in 1950 only 3 out of 33 census tracts in the area bounded by Troost Avenue, 25th street to 75th street, and the Blue River had a population of 50% or more African American. This number increased to 13 census tracts in 1960, 28 by 1970, and all 33 census tracts by 1980. By 1980, 20 out of 33 census tracts within the area east of Troost Avenue were over 90% African American. This content downloaded from 134.193.117.53 on Tue, 16 Aug 2016 21:33:53 UTC All use subject to http://about.jstor.org/terms 25 Separate and Unequal Table III. Racial Makeup of Kansas City, Missouri, School District Elementary Schools Located in Area Bounded by Troost Avenue on the West, 25th Street to 75th Street on the North and South, and the Blue River on the Easta 1965-66 1970-71 1974-75 School Percent black Percent black Percent black Kumpf 96.8 99.4b 100.0 Moore Faxon 72.1 92.6 54.6b 93.2 92.5 95.6 Meservey 76.7 98.2 97.5 Graceland Chick 89.6 51.2 99.0 83.6 99.6 90.8 Melcher 38.6 89.9 Bancroft 28.5 66.6 Willard 7.3 Pershing Twain 33.3 Pinkerton 92.2 42.7 99.5 85.0 18.0 84.3 96.7 84.4 98.7 98.7 93.7 94.9 Blenheim 20.9 53.9 92.3 Troost 3.3 42.2 93.3 Marlborough 30.6b 21.6 73.8 aSource: Kansas City, Missouri, School District bBoundary change occurred within the noted five School enrollment data reveal rapid raci neighborhoods east of Troost Avenue in F makeup of selected Kansas City, Missour Schools at five-year intervals between 196 As Table III shows, numerous elementary by Fig. 1, east of Troost Avenue, experienced the implementation of the Section 235 progra Twain, Pinkerton, Blenheim, and Troost ele less than 50% African American in 1965-66 school enrollment data indicate that the M turned from 30 to 54% African American d the nearby Troost elementary school chan year. Blenheim elementary school went fr during the 1967-68 school year to over 87% High School, Southeast Junior High Schoo Junior High School, and their feeder elem dramatic racial change during the late 1960 5Kansas City, Missouri School District Enrollment by Missouri School District Annual Fall Membership Rep Reports, 1955-56 to 1983-84. XK2. Box 213. KC 25 WHMC-KC. This content downloaded from 134.193.117.53 on Tue, 16 Aug 2016 21:33:53 UTC All use subject to http://about.jstor.org/terms Gotham 26 One key factor stimulating racial turnover in city neighborhoods burdened by the Section 235 program was the presence of numerous real estate speculators who profited enormously from the housing program by selling rehabilitated, government-insured properties with only cosmetic improvements to unsuspecting poor people. For example, speculators would purchase a house from a white family in a racially mixed neighborhood for a low price, secure an FHA guarantee through the Section 235 program, and then resell it to an African American family at an inflated price. Prior to the late 1960s, speculation and panic selling were unsuccessful in areas that lacked available credit for African Americans (e.g., areas where most banks would either not lend to African Americans or lend only on the most unfavorable terms) (Hays, 1985:112-120). The effect of the new Section 235 program was to relax mortgage lending standards and open a flood of credit to neighborhoods susceptible to panic selling and racial turnover. The Section 235 program made lending in these areas a risk-free venture for lenders who could get FHA approval on almost any dwelling, service the loan for a lucrative fee, and then sell the mortgage back to the federal government. If the homeowner defaulted on the mortgage, the FHA cov- ered the loss and acquired the home (Quadagno, 1994:111). One local resident recalled how the FHA program operated in Kansas City neighborhoods, "very poor families were directed into the area by unscrupulous real estate brokers, who used to the program to make money. They sold homes that were in bad repair. They dropped poor people in there without guidance. . .. Some of the homes deteriorated, and the remaining whites moved out. We're ending up with a new ghetto" (Kansas City Star, 8/28/72:1). The Section 235 program not only helped foster a climate conducive to panic selling, but the program also encouraged white flight from city neighborhoods. For example, one neighborhood east of Troost Avenue, the Blue Hills neighborhood (47th-63rd), underwent dramatic racial transition, going from about half white, half African American, at the time of 1970 Census to about 80% African American four years later (Kansas City Star, 12/16/74:30). The congregation of Saint Therese Little Flower Catholic Church in the Blue Hills neighborhood plummeted from 800 to 200 families between 1969 to 1973. "After the program began in 1969, Blue Hills residents began to think almost every new black neighbor was a '235 family,"' remembered Alvin Brooks, Assistant City Manager at the time, "Every black family that moved in became a 235er" (Kansas City Star, 2/16/75:1, 2/17/75:1). One Blue Hills resident remembered the effect of the Section 235 program in his neighborhood: People would call you on the phone and indicate that everyone was moving, were This content downloaded from 134.193.117.53 on Tue, 16 Aug 2016 21:33:53 UTC All use subject to http://about.jstor.org/terms Separate and Unequal 27 you interested in selling your home? .... As a matter of fact, you would get several calls that wouldn't identify themselves . .. ask if you were interested, and talk about selling houses and how many houses they had. The move in of neighbors under the [Section 235] policy of selling without commissions was . .. effective to set up panic. Later on, as there were foreclosure signs put and signs going up in windows showing "Government Property, Protected by the FBI" and so on, these are things that caused some panic, and so on.6 Part of the motivation behind the formation of the Blue Hills Home Corpo- ration was to stem panic selling in the area fostered by the Section 235 program. As one Blue Hills resident and founder of the Home Corporation recalled in 1974, "The [corporation] has but one goal-the renewal of the Blue Hills area. The physical condition of our neighborhood has suffered greatly from an over-concentration of federal Section 235 housing and from actions of speculator types" (Kansas City Star, 12/16/74:30). In effort to halt white flight and panic selling, a number of interracial neighborhood coalitions such as the Forty Nine-Sixty Three Neighborhood Coalition and the Marlborough Heights Neighbor Association launched door-to-door campaigns to prevent fear of rapid racial change and persuade people not to sell to profiteering real estate agents (Freilich, 1971:92-93; Kansas City Star, 8/14/70, 1/24/71:1, 1/25/71:20, 1126/71:6A). In July 1970, the Marlborough Heights Neighborhood Association circulated a letter to all neighbors warning them of the following: It has come to the attention of a group of your neighbors that a crisis of confidence may soon develop among homeowners in the Marlborough Heights area. We are persuaded, as your neighbor, that such a crisis has arisen in the past in other areas of the city for two reasons: A fear that their neighborhood will experience a rapid turnover in home ownership once a single Negro family moves nearby, and the failure of neighbors to talk together soon enough to work in common cause against unscrupulous real estate brokers who sometimes play one neighbor against the other. (Kansas City Star, 7/30/70) A month later the neighborhood coalition sent a letter to HUD and a number of local and state elected officials asking for assistance in halting the Section 235 program and stabilizing the neighborhood. Marlborough Heights Neighbors is a newly formed group whose goal is to establish a viable multiracial neighborhood. Our group is composed of black and white neighbors who are working together to minimize the possibility of panic and to preserve the comfortable character of our residential area. The FHA 235 program as it exists today is a major stumbling block to our efforts to stabilize our neighborhood [and] could alter the middle class nature of the neighborhood by precipitating outward movement of middle-class home owners, both black and white. We believe our neighborhood has absorbed, under the existing program, as many FHA 235(i) 6Testimony of Cleo H. Muller. Joint Addendum A (Excerpts from Record) of Kalima Jenkins, et al., Appellants, vs. the School District of Kansas City, Missouri (KCMSD), Appellees. pp. A65-61. Folder 13. KC 250, Arthur A. Benson, II. Legal Papers. WHMC-KC. This content downloaded from 134.193.117.53 on Tue, 16 Aug 2016 21:33:53 UTC All use subject to http://about.jstor.org/terms 28 Gotham Table IV. Section 235 Foreclosures and Total Loans Metropolitan Kansas Citya Foreclosures as a Foreclosures Total loans percent of total mortgages Kansas City, MO 182 (99.0%) 1274 (55.7%) 14.2% Suburban areas 2 (1.1%) 1011 (44.2%) 0.2% Metropolitan total 184 2285 8.1% aSource for Table IV: same as Table I. buyers as it can without crippling our efforts; the prospect of a greater influx of FHA 235(i) buyers will create panic here that may doom our effort.7 As a result of a numerous informal meetings, the Forty Nine-Six Three Neighborhood Coalition held its first organizational meeting in 1 in an effort to halt the tide of panic selling that was plaguing the neighbo hood as a result of the Section 235 program. As one resident recalled, " idea was that there were realtors that were calling white residents . trying to scare people to leave the neighborhood so that they could the houses cheaply. . .. There were people setting up meetings with re dents all over the neighborhood to calm people down so that they were affected by these realtors" (Interview with Ken Monroe, 2/22/96). Oth residents remembered that "[u]nscrupulous realtors were trying to sc our residents with racial fear in order to buy houses cheaply and make profits. Phone calls were often made to white home owners and told t their property values were dropping and they had better move quick get as much money as they could before 'they' move in." One residen remembered that "you would have people coming in saying that your house is worth so and so, but are you interested in selling? You know that bl people are moving into the area, and we can't guarantee that we would able to get you that amount of money next year or two years from n but we could get you that amount of money now."' The Section 235 program not only helped stimulate white flight an racial turnover, but the program also fostered housing abandonment a deterioration in city neighborhoods. Table IV shows Section 235 fore 7Letter from Marlborough Heights Neighbors to Representative Joe L. Evans, Chairma HUD Sub-Committee, House Appropriations Committee, and John O. Pastore, Chairm of HUD Sub-Committee, Senate Appropriations Committee. 8/28/70. X363. Letter fro Sidney L. Willens to Honorable George Romney, HUD. 1/29/71. RE: Marlborough Heig Letter from Sidney L. Willens to Mr. Harry Morley, Regional Administrator, HUD, 7/ 71. RE: 235 Exterior Maintenance Fund; Box 343. KC 250, Arthur A. Benson, II. L Papers. WHMC-KC. 8Deposition of Richard Dawson. 2/9/83. Erica Black, et al., Plaintiffs, v. State of Missouri, al., Defendants. United States District Court. Western District of Missouri. Western Divisi No. 77-0420-CV-W-3. This content downloaded from 134.193.117.53 on Tue, 16 Aug 2016 21:33:53 UTC All use subject to http://about.jstor.org/terms Separate and Unequal 29 sures, total loans, and foreclosures as a percentage of total mortgages in Kansas City from 1969 to 1972. According to this table, there was a 8.1% foreclosure rate on all Section 235 homes in the entire metropolitan area. However, 99.0% of these foreclo- sures were in central city Kansas City, Missouri, which had 55.7% of the 2285 homes insured under the program. As Table II shows, only two Section 235 homes in suburban areas were foreclosed upon while 182 were foreclosed upon in inner city Kansas City, Missouri, neighborhoods. The rate of housing foreclosures in the inner city compared to the suburbs summarized in Table IV can be explained with reference to the implementation of the Section 235 program. In a typical case, a real estate agent would purchase a number of vacant or dilapidated dwellings in a deteriorating section of the inner city. The agent would then make sufficient cosmetic repairs to make the building appear habitable and obtain an inflated appraisal from an unscrupulous FHA appraiser, occasionally for a kickback. Next, the real estate agent would find a low-income family with little knowledge of the responsibilities of homeownership. The bank would service the risk-free, federally insured loan and sell the home to the aspiring low-income family generating a huge profit for the real estate agent. Later, the unsuspecting low-income homeowner would discover that the home had many substandard conditions that the family could not afford to pay. As the housing repairs and expenses mounted, the homeowner would abandon the home and the dwelling would become the property of the FHA. During the tenure of the Section 235 program in 1960s and 1970s, FHA guidelines required that dwellings remain vacant during the forec sure period, despite the omnipresent threat of abandonment and vandali upon the unit. One long-term resident and journalist reported in 1972 th the Blue Hills neighborhood was littered with dilapidated FHA-own dwellings that had been abandoned by families who gave up trying to maintain the poor houses or who were victims of foreclosure. "Most of t homes are attractive and well-kept, but on nearly every block one or tw stand vacant, repossessed by the FHA. Some have been boarded up. Som have been damaged by vandals" (Kansas City Star, 8/28/72:1). In this sam neighborhood, FHA-held homes remained vacant through the 1970s an into the 1980s. During this time, HUD attempted to sell many of t foreclosed homes on an "as-is" basis but with little success because of the dilapidated condition of the homes. "Things are bad, and then you got one of those HUD as-is houses in there and that's the end of the line for a block," recalled Paul K. Whitmer, vice-president of the Blue Hills Homes Corporation in 1974 (Kansas City Star, 12/16/74:30). By the late 1970s, the FHA consistently had an inventory of almost a thousand dilapidated homes This content downloaded from 134.193.117.53 on Tue, 16 Aug 2016 21:33:53 UTC All use subject to http://about.jstor.org/terms 30 Gotham located in Kansas City, Missouri, city neighborhoods (Freilich, 1983:138; Kansas City Star, 10/7/75:1). A number of local residents who had firsthand knowledge and experience with the Section 235 program remembered the segregative and destabilizing effects of the program on city neighborhoods. As one longtime jour- nalist remembered, I wrote dozens of articles on that subject, I talked to lots and lots of people and I remember . .. the basic structure was set up to turn [neighborhoods] over and in my opinion it was the real estate industry that had more or less done this, with the concurrence of government. I mean real estate brokers and I mean the Real Estate Board and mortgage bankers, the respectable people of town, had decided that this was a good way to operate. . .. And actually this had been decided long before and I think some of them may have had doubts but they continued to do so, so long as opposition did not arise, they continued to follow this practice. (Interview with Harold Christine, 12/20/96) Another longtime resident recalled his experience with the exodus of white families and the influx of African American families into neighborhoods as a result of the Section 235 program. When black folks moved into the neighborhood white folks fled. I think there was several kinds of feelings. . . . The first black family on the block then the white families would leave. In some occasions the white people got real angry with the black residents that moved in. I remember one incident out where I was pastor . a [black] family moved in and [white residents were] very hostile to that family. (Interview with Mark Sampson, 2/20/96) Three lifelong African American residents recalled how both whites and African Americans reacted to the tide of panic selling set in motion by the Section 235 program. In some neighborhoods there were some whites that responded by making a public stand by saying that "my house is not for sale nor is my conscience for sale." But then on the other hand, there were those when one black moved in it wasn't long before the whole neighborhood became black. I bought a duplex in [one neighborhood], I was the first black there, I mean I was looking for a place, I wasn't looking to integrate a neighborhood, I was just wanted a house. But then when that took place well then it wasn't long before the whole neighborhood was a black neighborhood. (Interview with Brian Charles, 8/1/96) Black people really weren't aware with what was going on, white people probably weren't either. But there has been such a taboo with the races coming together, [real estate agents] would just say that "we got a black person moving into the neighborhood," and so one real estate company could sell the house that white folks were leaving to a black person, and steer the white folks to another area. You had a double-deal going on. (Interview with Cynthia Kaskins. 5/1/96) When you got out to 40th street further south the houses weren't in bad condition. They were small but not in too bad a condition, you would find one or two bad ones in a three to four block radius. By and large they were not badly taken care of. ... And a lot of people-white people who bought those houses got up and left, and here was FHA holding these houses, and they were in bad shape, and they were reselling them to minorities. (Interview with Jon Herman, 3/19/96) This content downloaded from 134.193.117.53 on Tue, 16 Aug 2016 21:33:53 UTC All use subject to http://about.jstor.org/terms Separate and Unequal 31 These interviews show that local residents were well aware of the segregative and destabilizing effects of the Section 235 program. Many interviewees recalled intense organization efforts including letter writin to state representatives, lobbying of local government leaders, and attempts to persuade fellow neighbors not to succumb to panic selling. By Novemb 1971, the deleterious effects of Section 235 had become sufficiently wide spread to elicit official condemnation from Kansas City, Missouri, city council members. In a letter to the HUD area office, City Councilma Joseph Shaughnessy requested that HUD meet with city's new Housing Advisory Commission to discuss dispersal of Section 235 Housing, advisin the agency that "I am deeply concerned about the impact of the recentl released funding for Section 235 existing housing program is having on th southeast part of Kansas City. Real estate people are using this program to exploit homeowner's fears in targeted areas, and are creating instabilit and turnover.9 In 1972, the Forty Nine-Sixty Three Neighborhood Coalition, the Blue Hills Community Association, and the Marlborough Height Neighbors had joined together in filing a lawsuit to compel HUD to hal further 235 loans in their neighborhoods.10 HUD's suspension of the pro gram later that year effectively ended the lawsuit as reports from aroun the nation poured into Washington detailing the scandalous ripoffs, an exploitative and victimizing character of the housing subsidy program (N tional Center for Housing Management, 1972: ch. 3, pp. 1-2; U.S. Commis sion on Civil Rights, 1971; U.S. House of Representatives, 1970; Quadagno 1994:111-113; Hays, 1985:112). By January 1973, President Nixon had imposed a moratorium on al public and subsidized housing programs aimed at halting the flood of scan dals throughout the nation on the part of private real estate brokers, home builders, mortgage lenders, and FHA appraisers. HUD's discontinuation of the Section 235 program had the practical effect of redlining the inn city as private interests and banks refused to invest in city neighborhood without the backing of governmental support or subsidies. Based on dat gathered by the Society of Real Estate Appraisers (SREA), the Kans City Star charted nearly 1000 home sales made in Kansas City, Missour in 1974 and 1975. Of the 717 home sales east of Troost Avenue reported to the SREA during that period, 16 were financed with conventional loan 9Letter from Joseph Shaughnessy, Jr., Councilman at Large, 2nd District, Kansas City, Missouri, to William Southerland, Director, HUD Area Office. 11/29/71. X1596AAA-4. Box 206. KC 250, Arthur A. Benson, II. Legal Papers. WHMC-KC. 10Forty Nine-Sixty Three Neighborhood Coalition. April 1973. "Status Report as of Apri 1973." Prepared by the Planning Group of the Forty Nine-Sixty Three Neighborhood Coal tion. Box 3, Folder 123. KC 61. Forty Nine-Sixty Three Neighborhood Coalition Inventor of Records and Information. WHMC-KC. This content downloaded from 134.193.117.53 on Tue, 16 Aug 2016 21:33:53 UTC All use subject to http://about.jstor.org/terms 32 Gotham 241 financed through the VA or FHA, and 459 housing units were government repossessed (Kansas City Star, 7/20/75, 7/21/75). FHA and VA mort- gages made up the bulk of housing sales within this area and was an indication that the area had been written off by lending agencies and financial institutions. Other data gathered by the Kansas City Star through the 1977 Home Mortgage Disclosure Act (HMDA) indicate that of the $642 million in home mortgages lent by local savings and loans in the metropolitan area that year, less than one percent (only 140 loans, for $3.2 million) went into areas east of Troost Avenue. Each of the thirteen census tracts west of Troost Avenue, south of 47th street, received over $600,000 in total loans for 1977. Interestingly, three of these census tracts each received more mortgage loan dollars than all thirty-three census tracts east of Troost combined (Kansas City Star, 4/16/78:1). Terminating the housing subsidy program helped speed the deterioration of the inner city as prospective buyers, sellers, and private investors simply disappeared when the FHA stopped insuring inner city loans. As private lending agencies withdrew from the inner city, whole neighborhoods were redlined thus reinforcing a vicious cycle of disinvestment and decay that continues to plague neighborhoods east of Troost Avenue to this day. CONCLUSION This paper has examined the segregative effects of HUD's Se program in Kansas City from the late 1960s through the 1970 focused on the local implementation of the housing subsidy p illustrate how the housing subsidy program reinforced pattern residential segregation, fostered home ownership for poor whit and impaired the ability of poor African Americans to accumu through home ownership. Although the Section 235 program w to ameliorate racial residential segregation, the program in fact segregation by concentrating poor African American families i transitional inner city neighborhoods while subsidizing the mo many white families into new homes in the suburbs. The segregativ of the federal program, however, go far beyond the mere rest African Americans to inner city housing. All of the FHA's Se homes in the Kansas City area were marketed by private realt worked to unleash a destructive wave of panic selling, housing fore and abandonment that contributed to racial turnover and deterioration in city neighborhoods from 1969 through the early 1970s. While the program enabled many participating poor white families to become new suburban homeowners, the majority of participating African American families This content downloaded from 134.193.117.53 on Tue, 16 Aug 2016 21:33:53 UTC All use subject to http://about.jstor.org/terms Separate and Unequal 33 moved into existing homes that needed substantial repairs not covered by the federal subsidy and not within their financial means to repair. As a result, numerous abandonments and eventual foreclosures destabilized city neighborhoods and their schools giving impetus to white flight. The role that the Section 235 housing program played in reinforcing racial residential segregation corroborates recent empirical research showing the reflexive relationship between federal housing policy, white wealth accumulation, and African American urban poverty. Squires (1993), Feagin (1994), and Quadagno, (1994), for example, have shown how FHA and VA policies encouraged suburban home ownership for whites and impaired the ability of African Americans to accumulate wealth through home ownership. My analysis shows how the Section 235 program helped foster home ownership for poor whites while denying it to poor African Americans, thus reinforcing prevailing patterns of racial inequality, poverty, and residential segregation in Kansas City. A number of scholars have pointed out that low rates of home ownership play a key role in limiting the wealth-accumulating ability of African Americans (Squires, 1993; Franklin, 1991:124-127). As Oliver and Shapiro (1995:8) have recognized, "home ownership is without question the single most important means of accumulating assets. The lower values of African American homes adversely affect the ability of African Americans to use their residences as collateral for obtaining personal, business, or educational loans." Thus, the negative effects of residential segregation go far beyond the lack of access to quality jobs and schooling to connect with racial inequalities in wealth and home ownership rates that have been perpetuated for decades through the market-centered orientation of federal housing policy. Indeed, according to 1990 census data, home- ownership rates by race for metropolitan Kansas City residents indicate that whites have the highest rate of homeownership of any racial group (68.3) while African Americans have the lowest rate (46.7), behind American Indians (54.9), Hispanics (56.2), and Asians (50.2). While the Section 235 program had numerous shortcomings and negative consequences, a number of administrative and procedural changes could have improved the program. First, counseling of potential buyers as to the responsibility of homeownership could have lessened buyer ignorance and minimized the rates of default. Interesting, during the late 1960s and early 1970s, HUD repeatedly requested funding for a counseling program for Section 235 home buyers, but Congress refused to grant it until 1972, after the abuses and scandals of the program had become apparent (Hays, 1985:115). Second, the creation of a maintenance reserve fund to cover the cost of labor or materials on major housing repairs could have reduced rates of foreclosure, abandonment, and neighborhood deterioration. Indeed, during 1971, neighborhood groups in Kansas City repeatedly lobbied This content downloaded from 134.193.117.53 on Tue, 16 Aug 2016 21:33:53 UTC All use subject to http://about.jstor.org/terms Gotham 34 HUD to establish a financial reserve fund to help poor people maintain their homes in the event of a major repair (Kansas City Star, 7/26/71:4, 7/27/71:4, 8/4/71;14C). Third, a conscious effort by the federal government to involve homeowner associations and neighborhood groups in the design and implementation of the program might have reduced blockbusting and rapid racial turnover in city neighborhoods. These programmatic alternatives suggest that the Section 235 program could have been substantially improved through changes in design and administration. Such efforts would have brought the program closer to meeting the housing needs of the poor as well as challenging the market-centered orientation and racial biases of the private housing industry. The experience of the Section 235 program and its alternatives suggests that housing programs cannot be successful unless there is a careful articulation of objectives from the start, a system of program evaluation for monitoring progress toward these objectives, and a sustained effort toward enforcing fair housing statutes in the implementation of the program. ACKNOWLEDGMENTS I wish to thank Joel Devine, Beth A. Rubin, James D. Wright, anonymous reviewers of Sociological Forum for comments on ear REFERENCES Abouhalkah, Yael T. Bonilla-Silva, Eduardo 1994a "Knock 'em down: Dilapidated struc- 1996 "Rethinking racism: Toward a structures are a nuisance that KC doesn't tural explanation." American Sociological Review 62:465-480. need." Kansas City Star. L-1. 10/9/94. Bradford, Calvin 1994b "Neglectful property owners deserve 1979 "Financing home ownership: The fedscorn." Kansas City Star. C-15. 12/1/ eral role in neighborhood decline." Urban Affairs Quarterly 14(3):313- 94. Abrams, Charles 1955 Forbidden Neighbors: A Study of Prejudice in Housing. Fort Washington, NY: Kennikat. 335. Bratt, Rachel G., Chester Hartman, and Ann Meyerson, eds. 1986 Critical Perspectives on Housing. Phil1965 The City is the Frontier. New York: adelphia, PA: Temple University Harper & Row. Press. Achtenberg, Emily Paradise, and Peter Bratt, Rachel G. 1986 "Public housing: The controversy and 1986 "The causes of the housing problem." Marcuse In Rachel G. Bratt, Chester Hartman, and Ann Meyerson (eds.), Critical Per- spectives on Housing: 4-11. Philadelphia, PA: Temple University Press. contribution." In Rachel G. Bratt, Chester Hartman, and Ann Meyerson (eds.), Critical Perspectives on Housing: 335-361. Philadelphia, PA: Temple University Press. This content downloaded from 134.193.117.53 on Tue, 16 Aug 2016 21:33:53 UTC All use subject to http://about.jstor.org/terms Separate and Unequal Bullard, Robert D. J. Eugene Grigsby, and 35 Florida, Richard L. and Marshall M. A. Charles Lee, eds. Feldman 1994 Residential Apartheid: The American Legacy. Los Angeles: CASS Urban Policy Series. Bullard, Robert D., and Joe R. Feagin 1991 "Racism and the city." In M. Gott- 1988 "Housing in U.S. Fordism." International Journal of Urban and Regional Research 12(2):187-210. Franklin, Raymond 1991 Shadows of Race and Class. Minneap- diener and Chris Pickvance (eds.), Ur- olis: University of Minnesota Press. Freilich, Amy Elizabeth Annual Reviews, Vol. 39:55-76. New-1983 Housing and Segregation: The Legacy bury Park, NJ: Sage Publications. of the Federal Housing AdministraCheckoway, Barry tion in Kansas City, Missouri. Master's 1984 "Large builders, federal housing prothesis, Public Affairs, University of grams and postwar suburbanization." Chicago. Freilich, Robert H. In William K. Tabb and Larry Sawyers ban Life in Transition. Urban Affairs (eds.), Marxism and the Metropolis: 1971 Freedom of Choice in Housing: The New Perspectives in Urban Political Impact of Restrictions in the Kansas Economy. Second edition: 152City Metropolitan Area. 9/27/71. A 173. New York: Oxford University Report by the Community Develop- Press. ment Laboratory. University of Missouri, Kansas City (UMKC), School of 1987 "Choosing neighbors and neighbor- Law, Robert H. Freilich, Faculty Di- Darden Joe T. hoods: The role of race in housing rector. Gelfand, Mark I. preference." In Gary A. Tobin (ed.), 1975 A Nation of Cities: The Federal GovDivided Neighborhoods: Changing Patterns of Race Segregation. Urban ernment and Urban America, 1933Affairs Annual Reviews, Vol. 32:151965. New York: Oxford University 42. Newbury Park, CA: Sage Publica- Press. tions. Goering, John M., ed. Denton, John H. 1967 Apartheid American Style. Berkeley, CA: Diablo Press. 1986 Housing Desegregation and Federal Policy. Chapel Hill: University of North Carolina Press. Feagin, Joe R. Grier, Eunice, and George Grier 1994 "A house is not a home: White racism 1971 "Equality and beyond: Housing segreand U.S. housing practices." In Robert gation in the Great Society." In NorD. Bullard, J. Eugene Grigsby, III, and man Yetman and C. Hoy Steele (eds.), Charles Lee (eds.), Residential ApartMajority and Minority: Dynamics of heid: The American Legacy: 17-48. Race and Ethnicity in America. BosLos Angeles: CASS Urban Policy ton: Allyn and Bacon. Series. Grigsby, J. Eugene Feagin, Joe R., and Robert Parker 1994 "African American Mobility and Resi1990 Building American Cities: The Urban dential Quality in Los Angeles," In Real Estate Game. Second edition. Robert D. Bullard, J. Eugene Grigsby, Englewood Cliffs, NJ: Prentice- III, and Charles Lee (eds.), Residen- Hall. tial Apartheid: The American Legacy: Federal Housing Administration 122-149. Los Angeles: CASS Urban 1936 Underwriting Manual. Washington, Policy Series. DC: Government Printing Office. Hays, R. Allen 1985 Federal Government and Urban 1938 Underwriting Manual. Washington, DC: Government Printing Office. 1946 Underwriting Manual. Washington, DC: Government Printing Office. Housing: Ideology and Change in Public Policy. Albany, NY: State University of New York Press. 1952 Underwriting Manual. Washington, Helper, Rose DC: Government Printing Office. 1969 Racial Policies and Practices of Real 1958 This is the FHA. Washington, DC: Government Printing Office. Estate Brokers. Minneapolis: Univer- sity of Minnesota Press. This content downloaded from 134.193.117.53 on Tue, 16 Aug 2016 21:33:53 UTC All use subject to http://about.jstor.org/terms 36 Gotham Hirsch, Arnold views, Vol. 32:337-367. Newbury Park, CA: Sage Publications. Residential Segregation in the United Massey, Douglas S. and Nancy A. Denton States." In Arnold Hirsch and 1993 Ray-American Apartheid: Segregation and mond H. Mohl (eds.), Urban Policy the Making of the Underclass. Camin Twentieth Century America: 65-99. bridge, MA: Harvard University 1993 "With or Without Jim Crow: Black New Brunswick, NJ: Rutgers Univer-Press. sity Press. Hutchison, Ray 1993 "The crisis in urban sociology." Urban Sociology in Transition, Research in Urban Sociology, Vol. 3:3-26. JAI Massey Douglas and Shawn N. Kanaiaupuni 1993 "Public housing and the concentration of poverty." Social Science Quarterly 71(1):109-122. McEntire, Davis Press. 1957 "Government and racial discrimina- Jackson, Kenneth T. tion in housing." Journal of Social Is- sues 13(4):60-67. Mid-American Regional Council Oxford University Press. 1993 Metropolitan Kansas City's Urban 1980 "Race, ethnicity, and real estate ap- Core: What's Occurring, Why its Impraisal: The Home Owners loan Cor- portant and What We can Do. A Reporation and the Federal Housing Ad- port of the Urban Core Growth Strateministration." Journal of Urban gies Committee. Mitchell, J. Paul History 6(4):419-452. James, Franklin J. 1985 Federal Housing Programs: Past and 1994 "Minority suburbanization in DenPresent. Rutgers: State University of ver." In Robert D. Bullard, J. Eugene New Jersey Press. Grigsby, III, and Charles LeeMohl, (eds.), Raymond Residential Apartheid: The American 1993 "Race and space in the modern city: Legacy: 95-121. Los Angeles: CASSInterstate-95 and the black community Urban Policy Series. in Miami." In Arnold Hirsch and RayKaterndahl, Dean Hill mond H. Mohl (eds.), Urban Policy in 1992 Intercity Class Segregation in U.S. Twentieth Century America: 101-158. Metropolitan Areas. Ph.D. dissertaBrunswick, NJ: Rutgers University Press. tion, Department of Sociology, UniMolotch, H. L. versity of Kansas, Lawrence, KS. Keating, W. Dennis 1972 Managed Integration: The Dilemmas 1994 Suburban Racial Dilemma: Housing of Doing Good in the City. Berkeley: and Neighborhoods. Philadelphia, PA: University of California Press. Temple University Press. National Center for Housing Management Keith, Nathaniel S. 1972 Report of the Task Force on Improv1973 Politics and the Housing Crisis Since ing the Operation of Federally Insured 1985 Crabgrass Frontier: The Suburbanization of the United States. New York: 1930. New York: Universe Books. or Financed Housing Programs. Wash- ington, DC: U.S. Government Print- Kleniewski, Nancy 1984 "From industrial to corporate city: ing Office. The role of urban renewal." In Wil- National Committee Against Discrimination liam K. Tabb and Larry Sawyers in Housing (eds.), Marxism and the Metropolis: 1968 How the Government Builds Ghettos. New York: National Committee New Perspectives in Urban Political Economy. Second edition: 205Against Discrimination in Housing. 222. New York: Oxford UniversityOliver, Melvin and Thomas Shapiro Press. 1995 Black Wealth/White Wealth. New Lief, Beth J. and Susan Goering York: Routledge. 1987 "The implementation of the federalOmi, Michael and Howard Winant mandate for Fair Housing." In Gary1986 Racial Formation in the United States: A. Tobin (ed.), Divided Neighbor- hoods: Changing Patterns of Race Seg- regation. Urban Affairs Annual Re- From the 1960s to the 1980s. New York: Routledge and Kegan Paul. This content downloaded from 134.193.117.53 on Tue, 16 Aug 2016 21:33:53 UTC All use subject to http://about.jstor.org/terms 37 Separate and Unequal Orfield, Gary 1975 "Federal policy, local power, and metropolitan segregation." Political Science Quarterly. 89(4):777-802. Quadagno, Jill Thomas, John Clayton 1990 "Kansas City: A City in the Middle." In Richard M. Bernard (ed.), Snowbelt Cities: Metropolitan Politics in the Northeast and Midwest Since World 1994 Color of Welfare: How Racism Under- War II. Bloomington: Indiana University Press. mined the War on Poverty. New York: U.S. House of Representatives Oxford University Press. Radford, Gail 1970 Committee on Banking and Currency. 1996 Modern Housing for America: Policy Investigation and Hearings of Abuses Struggles in the New Deal. Chicago: University of Chicago Press. Schafer, Robert and Charles G. Field in Federal Low and Moderate Income Housing Programs. 91st Congress, 2nd Session, December 1970. Washington, DC: U.S. Government Printing 1973 "Section 235 of the National Housing Office. Act: Homeownership for low-income families?" In Jon Pynoos, Robert U.S. Commission on Civil Rights Schafer, and Chester W. Hartman 1971 Report on the Racial and Ethnic Impact of the Section 235 Program. June (eds.), Housing Urban America: 4601971. Washington, DC: United States 471. Chicago: Aldine Publishing Commission on Civil Rights. Company. Weaver, Robert C. Squires, Gregory D. 1948 The Negro Ghetto. New York: Har1993 "The political economy of housing: All the discomforts of home." Urban court, Brace, and Company. Weiss, Sociology in Transition. Research inMarc A. 1980 "The Origins and Legacy of Urban Urban Sociology, Vol. 3:129-157. New York: JAI Press. Renewal." In Pierre Clavel, John ForSquires, Gregory D., William Velez and Karlester, and William W. Goldsmith (eds.), Urban and Regional Planning 1991 "Insurance redlining, agency location, in an Age of Austerity: 53-79. New and the process of urban disinvest- York: Pergamon Press. 1987 Rise of the Community Builders: The ment." Urban Affairs Quarterly E. Taeuber 26(4):567-588. Squires, Gregory D. and William Velez 1987 "Neighborhood racial composition American Real Estate Industry and Urban Land Planning. New York: Columbia University Press. and mortgage lending: City and subur- Winant, Howard 1994 Racial Conditions: Politics, Theory, Affairs 9(3):217-232. Comparison. Minneapolis: University of Minnesota Press. Stephens, G. Ross Yinger, John 1985 "Politics in Kansas City." In Richard 1995 Closed Doors, Opportunities Lost: J. Hardy and Richard D. Dohm (eds.), Missouri Government and Politics. The Continuing Costs of Housing DisColumbia: University of Missouri crimination. New York: Basic ban Differences." Journal of Urban Press. Books. This content downloaded from 134.193.117.53 on Tue, 16 Aug 2016 21:33:53 UTC All use subject to http://about.jstor.org/terms First post Research has shown that housing is one of the best predictors for wealth accumulation. Knowing this, the U.S. Housing and Urban Development department developed the Section 235 code in an attempt to help poor nonwhite people find stable housing. However, the code just increased white flight from inner cities to the suburbs, thus cementing housing’s racial divide. This happened all over the country, including in Kansas City. We learn about Kansas City’s history in Gotham’s article Separate and Unequal, which describes how the Section 235 housing code helped white people establish permanent residences in suburbs while simultaneously keeping black people in temporary inner-city housing. One of the ways the code exacerbated the racial divide is that black people were often pushed into older existing properties which required many repairs, while white people were steered toward newly constructed properties in suburban areas. In fact, "the vast majority of new construction through Section 235 was in the suburban areas (72.4%) while only 27.6% of new housing was located in central city Kansas City, MO.” (Gotham, 22) This is problematic because the cost of repairs was often too great, so black people in existing homes were often forced to leave because they couldn’t afford the repairs, which were not covered under the Section 235 code. Meanwhile, poor white people were allowed to move into newer homes with no repairs. The way the 235 code was written allowed racially segregated housing, even if it was not the goal. This reading reminded me a lot of the readings last week when we learned about racial covenants and redlining in housing. Even though racial covenants were technically ruled unenforceable by the court, the way the law was written still permitted the practice to continue. Section 235 was intended to help poor nonwhite people but ended up hurting them because it segregated housing much like racial covenants. The effects of this practice are still seen in Kansas City today, with the housing to the West of Troost receiving more maintenance and upkeep than the housing East of Troost. The Section 235 code coupled with the effects of existing racial restrictions in housing only led to further segregation and unequal treatment in housing. Second post The two works, Separate and Unequal and Apologies to Dracula, analyze two historical instances of systemic discrimination and examine their lasting effects. Separate and Unequal, by Kevin Fox Gotham, focuses on one component of the Housing Act of 1968, the Section 235 Program. This program was an attempt by the federal government to assist low-income people with home ownership. However, the program was ultimately undermined and failed. Gotham’s reasoning behind why the Section 235 Program had so little success centers around the housing market and the corrupt tactics it employed to discriminate against minorities, specifically African Americans. African American’s faced, in many ways, a “dual housing market”. Gotham describes the effects of this dual market as having “reinforced and perpetuated racial segregation and inequality through the use and enforcement of restrictive covenants, racial steering, blockbusting, and redlining activities of private and public mortgage lending agencies.” (Gotham 17) In reading through the article over the Section 235 Program, it stood out to me how much damage a corrupt system can do. The housing board was not only able to derail the goals of Section 235, but also twist the outcome in such a way that the very people it was designed to help were hurt more. Gotham describes the outcome of the program as providing African Americans with housing that was old, in disrepair, or in an undesirable location. This further promoted the discrimination of African Americans as they were then associated with their less than ideal neighborhoods. I think the fact that something like this was allowed to happen demonstrated a lack of oversight and/or empathy on the part of the government. It seems as though they either put the Section 235 act into effect and did not oversee how it was implemented, or they saw what was happening and did not intervene. Both options show that despite whatever the original intentions may have been, actions without the proper oversight can do more harm than good. Gotham, Kevin Fox. “Separate and Unequal: The Housing Act of 1968 and the Section 235 Program.” Sociological Forum, vol. 15, no. 1, 2000, pp. 13–37. Reply
Purchase answer to see full attachment