Transcript for From Redlining to Better Homes
[Birds Chirping, Neighborhood Sounds]
Beckley: Dr. Bernard Vagner and his wife Audrey moved to South Bend, Indiana in January, 1949. The young couple had decided to lease some rooms in a house while familiarizing themselves with their new city. But by that summer, it was time to start looking for a place of their own. After being shown several properties that left much to be desired, they decided that perhaps building their own home would be a better option. And they were in luck – there were two lots available on the corner of Campeau Street in a nice neighborhood. According to the Vagner’s attorney, the landowner was very anxious to sell. And she must have been for when the couple arrived to look at the land, she showed up with the deeds in-hand, apparently ready to make a deal that very day.
That is, until she saw the couple. As soon as she laid eyes on the pair, she started making excuses – “the neighbors might not like it.” “My husband wouldn’t approve.” And so on. What she hadn’t realized until that moment was that the Vagner’s were African American. And in the US in 1949, that meant that many neighborhoods were closed to them, whether they had the money to buy a home there or not.
The Vagner’s weren’t able to purchase a home that year. In fact, it took them until June of 1955 to find a house – that’s nearly 6 years of searching…just to find someone willing to sell them property. At this same time, similar experiences drove 22 families also in South Bend, to come together to confront this racist exclusion and build a community for themselves – a community called Better Homes of South Bend. In this episode, we’ll explain and examine the role redlining has played in our state’s history and tell the story of Better Homes of South Bend, which was created for the precise purpose of defeating redlining.
I’m Lindsey Beckley and this is Talking Hoosier History
Newsreel: It was just one of the New Deal’s idealistic programs that changed the face of the nation.
Beckley: On August 1, 1933 seventeen thousand people stood in line in front of the newly opened Home Owners Loan Corporation office in Chicago. The Home Owners Loan Corporation, or HOLC, was a newly formed government-sponsored organization – part the New Deal – formed to address the ongoing foreclosure crisis in America. To do this, HOLC was offering long-term, low interest rate home mortgage loans for both refinancing existing mortgages and financing new home purchases.
Newsreel: Home ownership is the basis of a happy, contented family life. And now, through the use of the national housing act ensured mortgage, it’s brought within the reach of all citizens on a monthly payment plan no greater than rent.
Beckley: This meant that many Americans, for the first time in their lives, had the opportunity to own their own home, rather than renting. Many white Americans, that is.
Beckley: In the 3 decades after the establishment of HOLC, just 2 percent of all loans went to non-white families. Various methods were employed to exclude minorities from receiving home loans, but among the most effective and infamous were the Residential Security Maps. These maps, kept secret and only discovered by historians in the 1980s, are considered the basis for the widespread, systematic denial of housing loans for Black Americans, known as redlining, a term referring to officials drawing red lines around specific neighborhoods.
HOLC began research for the maps in the mid-1930s. Working with local realtors and banks, the organization painstakingly divided 239 American cities, including what were then the 7 largest cities in Indiana – Indianapolis, Fort Wayne, Gary, Muncie, Terre Haute, Evansville, and South Bend – into neighborhoods, assigning each neighborhood a grade of “A” through “D.” “A” being what they considered to be the best, and “D” the worst – kind of like school. Each grade corresponded with a color on the security map – green for “A,” blue for “B,” yellow for “C,” and red for “D.”
Many features of a neighborhood were considered when assigning these grades. Building type and age, proximity to shopping and business districts, sales histories…and “infiltration of inharmonious racial groups.” The Underwriting Manual, which served as a comprehensive guide to those deciding who was to receive HOLC loans stated that:
Voice actor reading from HOLC handbook: “If 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 [home] values.”
Beckley: If the valuator judged an area to even be in danger of “infiltration,” they were instructed to downgrade the rating of the whole neighborhood. And those ratings were incredibly important. White families seeking a mortgage in a green or blue area were nearly always approved. In yellow areas, the chances of approval dropped dramatically. And if were looking to purchase a property in a red area, their chances were slim to none. For Black families, the possibility of obtaining a mortgage in any area was close to zero.
If you’re Black, you can only live in specific all black neighborhoods. Banks won’t approve mortgages for any homes in that area due to redlining. But you can’t get a loan for a house in other neighborhoods because you’re Black. Ta-Nehisi Coates quotes Melvin Oliver and Thomas Shapiro’s books Black Wealth / White Wealth on this topic:
Voice Actor: “African Americans who desired and were able to afford home ownership found themselves consigned to central-city communities where their investments were affected by the “self-fulfilling prophecies” of the FHA appraisers: cut off from sources of new investment[,] their homes and communities deteriorated and lost value in comparison to those homes and communities that FHA appraisers deemed desirable.”
Beckley: Making it even more difficult for minority families to purchase property, many neighborhoods had what were called racially restrictive covenants. These covenants were written into the deed for the property, and they could be very specific about who could and could not purchase the home in the future.
Voice Actor: “No person other than one of the Caucasian race shall reside on any of said described premises excepting that a domestic servant in the actual employ of an occupant may reside in the home of his master.”
“Said tract shall not be sold, leased, or rented to any person or persons other than of white race nor shall any person or persons other than of white race use or occupy said tract.”
Beckley: Both of those are examples of real covenants in deeds from the 1930s and 40s in Seattle, Washington. Similar covenants existed across America.
Beckley: Together, redlining and racially restrictive covenants all but excluded minority families from participating in the American dream. The dream owning a home that could be passed down through the generations. This has had long term effects – access to home mortgage loans is an underpinning of wealth building in America, meaning that these practices hindered the upward mobility of all Black Americans. In fact, Mapping Inequality states that:
Voice Actor: “More than a half-century of research has shown housing to be for the twentieth century what slavery was to the antebellum period, namely the broad foundation of both American prosperity and racial inequality.”
Beckley: In the early 1950s in South Bend, Indiana, 23 families challenged this inequality with bravery and ingenuity.
Most of South Bend’s African American population had arrived during the Great Migration, a period from around 1916 to 1970 when many Black Americans moved from the rural south to northern cities to fill the need for industrial workers during the first and second world wars.
Newsreel: America is many things to many people.
Beckley: Before this time, very few Black families lived in South Bend.
Newsreel: It’s all races, creeds, and religions.
Beckley: Those few families of color who did live in the city lived alongside their white neighbors, without much segregation.
Newsreel: Freedom to own property.
Beckley: As the black population began to rise, though, this changed dramatically.
By the time the families we’ll be following for this episode were living and working in South Bend, Jim Crowism, a term used to describe the racist attitudes, policies and laws from the late 1800s to the 1960s, was a strong force in cities throughout America, including South Bend. In Better Homes of South Bend, author Gabrielle Robinson writes of the Black citizens of her city:
Voice actor reading from Better Homes of South Bend: “They met Jim Crow at every step; whether they were at work… or at home…whether they were shopping and served only after white customers had been helped or could enter city hotels and restaurants only as bellboys and waiters.”
Beckley: Decades of redlining had forced the majority of South Bend’s Black population into rentals in the area surrounding the Studebaker plant, which was also one of the main employers of African Americans in South Bend. In two developments just one block from the immense, smoking factory – Maggie’s Court and Horse’s Alley – 54 families were crowded together in 44 small rental houses.
Beckley: Those who didn’t live in that most densely populated areas often rented nearby federal defense homes.
These homes had been built to accommodate the rapidly expanding African American population during World War II and were prefabricated homes supplied, as their name suggests, by the federal government. These were meant to be temporary structures, constructed quickly and to be torn down after the war. That had never happened due to the continued lack of housing for African Americans in South Bend and the refusal of white residents to allow desegregation.
Beckley: Even if white residents were willing to sell their homes to a Black family, they would have been hard pressed to find a realtor willing to help navigate the process. Up until 1950, the official code of ethics of the National Association of Real Estate Brokers stated,
Voice actor reading from Code of Ethics: “A realtor should never be instrumental in introducing into a neighborhood a character of property or occupancy, members of any race or nationality, or any individual whose presence would clearly be detrimental to property values in the neighborhood.”
Beckley: After 1950, this portion of the code was amended to remove “race or nationality,” but that didn’t lead to any change in their practices – redlining, racially restrictive covenants, and general racism worked together to keep the Black families of South Bend from owning land in large swaths of the city.
It was in this context that several families gathered after church on Sunday, May 21, 1950 to take matters into their own hands. Their plan was to form a housing cooperative. Through this co-op, which they named Better Homes of South Bend, the families hoped to achieve what few had done before – own their own homes, outside of the industrial slums they had been relegated to for their whole lives. The idea was for them to pool their money and resources to purchase several undeveloped lots. The co-op would obtain a mortgage loan to start the construction and then each individual family would, with the co-ops help, obtain their own mortgage to finish construction.
By and large, the people of Better Homes were just like the vast majority of the Black residents in South Bend. Many had moved to the north seeking employment and better opportunities for their families. Almost all of the men worked at the Studebaker plant in one position or another. And they had all struggled to find adequate housing for their families.
Now, I’m going to get into the actual nuts and bolts of how the Better Homes of South Bend hoped to achieve their goals – bear with me, I promise the payoff is worth it.
Beckley: Like any new organization, the members of Better Homes of South Bend started by electing officers, hiring a lawyer, and drawing up incorporation papers. Their lawyer, noted African American civil rights advocate J. Chester Allen, advised the group that forming a corporation gave them the best chance of success. So, that’s what they planned to do. He also estimated that the group would need at least $2,000 for startup money. This money came from the founding families themselves, who would pay an initial amount of $100 to secure their spot and another $300 payment as soon as they were able to. Considering one Studebaker worker reported his income as $72 per week, these sums were nothing to be scoffed at.
After the initial meeting, things moved quickly for a time. Less than a month later, they were able to successfully place an option on 26 undeveloped lots on North Elmer Street. Leroy Cobb, the youngest member of the Better Homes group, recalls the first time he saw the Elmer Street site over 60 years later. He and a friend took a bus to the area and, after getting lost, he finally set eyes on the empty street that would become his neighborhood. Little did he know that acquiring the land would be the easiest part of the process.
Every step after that was slowed by bureaucratic red tape, discriminatory practices, and the normal problems that can creep up when taking on a project of this size.
Since these were totally undeveloped lots, one of the first hurdles was getting the city to install sewage and water lines, a task that took years to complete. The next, more obvious task was to hire a contractor, but the local contracting companies were notorious for using sub-par materials for homes being built for African Americans. When they finally found what they thought was a suitable contractor, he delayed and made excuses and changed prices so often that it was hard to attribute it just to bad business practices. And later, once the families moved in, the discrimination continued. One Better Homes resident recalled that the local little league changed the borders of the district to stop just a few blocks before Elmer Street, apparently to exclude Black children.
However, there were reasons for celebration alongside the frustrations. Milestones that were scattered throughout that same time included divvying up the lots, hiring contractors, and obtaining mortgages. That last one was especially important since local banks were well known for denying black families mortgages, especially in non-black neighborhoods. Leroy Cobb recalled the meeting with the bank executives:
Voice actor: “Here I am, just a bit over twenty years old, sitting in one of those fancy board rooms and facing all these white men in their suits.”
Beckley: DeHart Hubbard was an African American man and the race relations adviser for the Federal Housing Authority. Leroy Cobbs recalled Hubbard helping the group navigate the mortgage process, saying:
“What I was really proud of was that here was a black man standing up to white executives and telling them that Better Homes wants to have a fair shake. That inspired me.”
Beckley: And really, the whole experience must have been inspiring. The process, though long and sometimes demoralizing, was ultimately successful.
Beckley: All told, 22 homes were built through the Better Homes of South Bend Co-op. The first family was able to move into their home sometime in 1952, but it wasn’t until 1954 that all Better Homes members were listed in their Elmer Street residences in city directories.
[Music. Bird song]
Beckley: Just think about what that meant to those families. They were able to obtain what had seemed unobtainable – a piece of the American dream. The families celebrated their accomplishments with a community picnic in the summer of 1954, and let me tell you, looking at the group photo from that picnic is something special. A group of well dressed, smiling people, kids fidgeting, eyes squinted in the bright light of a beautiful summer afternoon, posing with the roofs of the homes they had worked so long to secure visible in the background. It’s beautiful. And it’s lasting.
That picnic wasn’t the only community celebration in the years to come. Picnics were held every summer. There were neighborhood parades, where a King and Queen were crowned. The children grew up together – they were the only African American students to attend the nearby Marquette Elementary School, just as their families were the only African American families to live in that area of the city. The success of Better Homes went beyond the immediate reality of living in a new neighborhood though.
Home ownership is a foundation of generational wealth and security in America. The Better Homes families built more than just houses in that empty space – they built a community and, even more than that, they built a legacy. When Better Homes of South Bend author Gabrielle Robinson spoke to the children of the members of the organization, she discovered the true importance of the project. Beyond breaking color barriers or defying racism, the members created a safe, happy place for their children to grow up and those children reflected fondly on their childhoods on Elmer Street.
Voice actor: “It was a wonderful neighborhood to grow up in.”
“We had hedges between our homes, and flowers in the yard. On Saturdays you could hear the lawnmowers in the yards.”
“We were proud of where we lived.”
“You couldn’t get away with anything…On Elmer Street, I had many dads.”
Beckley: These children went on to become lawyers, teachers, principals, nurses, and more. At a time when 70-75% of African Americans in the nation graduated high school, 100% of the Better Homes children graduated and 13 went on to graduate from college. And today, some of them can still be found right there on Elmer street, living in the same one story homes with flowers in the yards and hedges on the fence line that their parents built all those years ago.
The Better Homes of South Bend Co-op was a success. It afforded those families the opportunity to live in a nice area. The children of Better Homes members integrated their schools and went on to successful professional careers. And some other families were even able to move into the same area after the Better Homes blazed the path for them. Unfortunately, this success did not spread far from those few blocks on Elmer Street.
Redlining and other exclusionary practices have left a lasting effect on South Bend. Today, 83% of families living in areas that received “D” ratings on the 1937 Security Maps fall in the low to moderate income bracket while 95% of families living in areas that received “A” ratings earn mid to upper incomes. Simply put, neighborhoods that were redlined in 1937 are economically depressed today. The same holds true for the vast majority of cities where Security Maps were developed.
In those instances where a formerly “D” rated area now contains a high number of mid to upper income earners, it is by and large the result of gentrification, which comes with its own set of problems. When an area is gentrified, the people who have lived in the area for generations – often minorities – are forced out by inflated property taxes and higher living costs. This leads to the question posed by National Community Reinvestment Coalition researcher Bruce Mitchell:
Voice actor: “Is Gentrification promoting sustainable desegregation? Or is it just a movement towards increased segregation in the next census period?”
Beckley: If gentrification is a movement towards increased segregation, it’s likely join the likes of slavery and redlining in history books as the basis for widespread wealth building for white Americans and widespread inequality for Black Americans.
However, redlining is effecting our communities in more direct ways than its relationship with gentrification. In fact, just this year, in June of 2019, First Merchants, an Indiana based bank, settled a redlining lawsuit brought against them by the Department of Justice. Although it settled out of court, the case was strong and made it more evident than ever that redlining is more than just a footnote in history – it’s an ongoing injustice in American cities.
Beckley: Once again, I’m Lindsey Beckley and this has been Talking Hoosier History. Talking Hoosier History is a product of the Indiana Historical Bureau, a division of the Indiana State Library. My main secondary source for the information on Better Homes of South Bend in this episode came from Gabrielle Robinson’s Better Homes of South Bend: An American Story of Courage. If you would like to see all of my sources, visit blog.history.in.gov and click “Talking Hoosier History” at the top to see a full transcript and show notes. Talking Hoosier History is written by me, Lindsey Beckley. Production and sound engineering by Jill Weiss Simins. We’d like to thank Brenna young, Carrie Reiburg, Alleah Varnett of Shortridge High School, Sam Smith of Butler University, and Justin Clark of the Indiana Historical Bureau for lending their voices to the podcast. Find us on twitter and Facebook as the Indiana Historical Bureau. And please, take a moment to like, rate, and review us wherever you get your podcasts. As always, thanks for listening.
Redlining Show Notes
Jackson, Kenneth, Crabgrass Frontier: The Suburbanization of the United States, New York: Oxford University Press, 1985.
Lipsitz, George, The Possessive Investment in Whiteness: How White People Profit From Identity Politics, Philadelphia: Temple University Press, 2006.
Robinson, Gabrielle, Better Homes of South Bend: An American Story of Courage, Charleson: The History Press, 2015.
Tindall, George and David Shi, America: A Narrative History, New York: W.W. Norton and Company, 2013.
Underwriting Manual: Underwriting and Valuation Procedure Under Title II of the National Housing Act, Washington D.C.: Federal Housing Administration, 1936 accessed Hathai Trust: https://babel.hathitrust.org/cgi/pt?id=mdp.39015018409246&view=1up&seq=5
“Thousands Ask U.S. Home Loans on First Day,” Chicago Tribune, August 2, 1933, p.9.
Mitchell, Bruce and Juan Franco, HOLC “Redlining” Maps: The Persistent Structure of Segregation and Economic Inequality, National Community Reinvestment Coalition, 2018, Accessed: https://ncrc.org/wp-content/uploads/dlm_uploads/2018/02/NCRC-Research-HOLC-10.pdf.
Welsh, Nancy, “Racially Restrictive Covenants in the United States: A Call to Action,” Agora Journal of Urban Planning and Design, 2018, Accessed: https://deepblue.lib.umich.edu/bitstream/handle/2027.42/143831/A_12%20Racially%20Restrictive%20Covenants%20in%20the%20US.pdf?sequence=1&isAllowed=y.
Mapping Inequality: Redlining in New Deal America: https://dsl.richmond.edu/panorama/redlining/#loc=5/36.721/-96.943&opacity=0.8&text=intro
Racial Restrictive Covenants: Neighborhood by Neighborhood Restrictions Across King County, “The Seattle Civil Rights & Labor History Project:” https://depts.washington.edu/civilr/covenants.htm
“T-RACES: a Testbed for the Redlining Archives of California’s Exclusionary Spaces”
R. Marciano, D. Goldberg, C. Hou: http://salt.umd.edu/T-RACES/
The Indiana Historical Bureau. “Better Homes of South Bend” Historical marker file.