Chicago’s History of Housing Injustice

There was a time–not in the too distant past–when African Americans could not get a mortgage loan from banks in Chicago.  It had nothing to do with income or job stability or credit scores.  It was only about skin color.  The policies of the Federal Housing Authority (refusal to insure mortgages in “redlined” [ie black] communities) and the practices of the Mortgage Bankers Association prevented access to credit on the basis of race.  As a result, African Americans who wanted to own their own homes often had to purchase them “on contract”–meaning that they paid for their homes on an installment plan directly from the owner over many years while still being responsible for all repairs and maintenance.  However, most contracts included a clause stating that if the buyer missed even one payment, the property would revert back to the seller who could then evict the homeowner and then re-sell the property to another family.  The buyer would then lose not only the home but his/her entire investment.

A job loss, a catastrophic illness, the death of a wage-earner, economic downturns could quickly result in the loss of the home, while the seller (who was usually white and often connected to a real estate company) was able to turn a huge profit by reselling the home over and over again.

While African Americans now have legal access to credit and mortgages, the legacy of housing injustice has cast a long shadow.  Today, African Americans are more likely to be offered sub-prime loans, have lower credit scores, be charged higher mortgage interest rates, and experience foreclosure.  And home ownership, the foundation of economic stability, continues to elude communities of color.  The fight for housing justice continues.

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