The Racial Shape Of Atlanta
The 2008 housing collapse has brought to the forefront yet another crisis of modern America: the persistent effects of institutionalized racism in housing policy. Following the collapse, majority-black zip codes all around the nation are facing slow recovery, exemplifying a continuing disparity between black and white homeownership, which dates back to the “homeowner revolution” of post-World War II America.
Atlanta is an especially vivid example of these disparities. The 2000 census classifies this Southern city as “hypersegregated” in terms of the location of black and white homeownership.
Since its earliest roots as a railroad city assembled from the ruins of the American Civil War, Atlanta has been a model of intentional segregation and racism: a paradigm that the creation and implementation of government housing policies has only bolstered. Even today, years after the 2008 housing collapse, the effects of those racist policies are still evident. In Atlanta, race is the largest indicator of recovery potential in the wake of the collapse.
By 1910, Atlanta was already behind in the nationwide push towards homeownership. While the national homeownership rate hovered at about 40%, in Atlanta it was approximately 20% due, in large part, to the lucrative home rental market, which encouraged renting instead of buying, according to Leeann Lands. As Atlanta continued to trail behind nationwide trends towards home ownership, World War I pulled the nation’s focus towards war. The subsequent housing crisis immediately following the war created the perfect conditions for government intervention in the housing market and, as a result, led to the creation of the U.S Housing Corporation and a governmentally backed push towards homeownership. While homeownership rates gradually increased following government intervention after WWI, an increase in state action after the Second World War was what truly set the stage for the creation of the homeowner based housing market sill present today.
Following the Second World War, two main federal actors in the housing market were the VA and the Federal Housing Administration. Both of these programs helped make owning a home more affordable by offering low-cost mortgages and loans, setting standards for underwriting loans, and insuring loans made by banks and other providers. The VA programs, especially the GI Bill of Rights, extended housing opportunities to returning veterans as a way to both reward their service and mitigate some of the pressure placed on the housing market with the return of a large portion of the population. The FHA, although not bound by the necessity of military service, also experienced large growth in the years following World War II, both in response to and as a source of the growing trends towards homeownership.
While there is clear evidence that these programs increased homeownership rates, as well as the availability of affordable housing, the program’s outreach was narrow in its scope. Not everyone had access to the benefits of these programs. In particular, both the VA and the FHA policies created unequal access for African Americans and other minorities. The VA, by placing racial quotas on military service for African Americans, as well as racialized criteria for who qualified for parts of their programs, restricted access to the prosperity that these programs brought. There were similar problems with the FHA, whose purpose was to underwrite mortgages and insure loans in an effort to reach working and middle-class Americans excluded from the housing market. However, the FHA operated on a racialized rating system for property risk, which purposely and explicitly excluded blacks and other minorities from taking advantage of their programs. 98% of the mortgages that the FHA underwrote were granted to white people. At the same time, the FHA defined the movement of black people into an area as an “adverse circumstance” and thus structurally discouraged desegregation.
Consequently, these programs led to blatant and systematic racism that prevented black Americans and other minorities from prospering in the post-World War II housing boom. This problem was further magnified in Atlanta due to their delayed entry into the homeowner based market. While the white population moved into “suburbia” after the war, the city’s black population was prohibited from moving to these new developments. These practices cemented racial segregation in cities and increased the racial disparity in homeownership.
In Atlanta especially, these problems were compounded by a lack of new infrastructure during wartime and highway development that destroyed black housing in the 1950s and 1960s. As Ronald Bayor shows in Race and the Shaping of Twentieth- Century Atlanta, these highway development projects were intended to create a physical boundary between white and black residential areas. This physical form of segregation led to an increasingly critical need for new housing for African- Americans, motivating a group of black community leaders and real estate developers to create the Atlanta Housing Council, which aimed to find areas for peaceful black development. In the end, only six areas were designated for black housing expansion, which were only approved near existing areas of black housing.
Even as the VA and FHA policies became less explicitly racist following national trends towards equality in the wake of the civil rights movement of the 1960s, the effects of these historical policies on the makeup of Atlanta and other cities around the South were not forgotten, nor were they especially mitigated. Because of this, even today the effects are evident in housing prices, net worth, and city makeup. The inability of the black Americans to move into “suburbia”, including Mt. Paran, Northside, and Chastain Park near Atlanta, has been part and parcel of these long-lasting effects. After World War II, housing values in suburban areas increased rapidly. The racial differences in mortgage access not only prevented the city’s black residents from benefiting from this flight to suburbia; it also created a long-term racial divide in the ability to accumulate wealth.
The discrimination continued when, after being excluded from the mortgage housing market for decades because of FHA and VA policies, minority communities became targets for subprime loans. While minority communities were continually passed over for mortgage underwrites and traditional loans, Allen Fishbein and Harold Bunce show that these communities were also explicitly targeted for risky subprime loans. With higher interest rates, many people with subprime loans were not able to keep up with their loan payments, which led to mortgage delinquencies and foreclosures. This economic trouble was magnified after the housing bubble burst and housing prices plummeted. While many Americans struggled in the face of the collapse, minority communities were overrepresented in this crisis. Thus, despite current ideals of equality, minority communities are still being disproportionately affected by the discriminatory past of US housing policy. This disparity is just one of the reasons that majority black communities in Atlanta have been so slow to recover in the years following the housing collapse.
After the collapse in 2008, following a movement away from risky subprime loans, which explicitly contributed to the collapse, the FHA made a comeback to levels unseen since the period after World War II. Although these new institutions and policies lacked the explicit linguistic racism exhibited in the immediate postwar period, the odds of a loan being backed by the FHA increased substantially when going from a predominantly white zip code in Atlanta to an otherwise similar predominantly black neighborhood. While FHA loans continue to bring white communities housing security, they also continue to systematically marginalize the black community in a time in which all Americans need support.
As much as Atlanta is seen as a progressive, modern Southern city it was built, and continues to be a product of, racially disproportionate policy. The housing history of Atlanta, and of the South continues to show the region as a built landscape that bears the imprint of far-reaching racism. To that end, to understand the South without considering the institutions which built it is to deny the continued suffering of millions of Americans who endure the consequences of them.
