In the 1930’s the United States was faced with a housing shortage. The solution by the government was to create the Federal Housing Administration. Most notably they gave out loans for houses and provided public housing. This program was instrumental in creating modern American suburbia as after the Second World War many returning GI’s secured home loans that were extremely affordable. The new suburbs were larger and in better condition than housing in the city but it was also cheaper (Herbes, Smith and Strain 2003).   

The FHA program let millions of Americans own a home thus the families gained equity. Home ownership is the largest source of wealth for Americans and it enabled many Americans to gain significant amounts of wealth. This was instrumental to the middle class as the equity allowed families to better able to send their children to college for example.. (Gross 2017). However, this program was flawed as it was not available to all Americans. Essentially only white Americans were able to access these benefits in a meaningful way. (Madrigal 2014). Sadly this was not a bug caused by an oversight but a feature that was carefully crafted.

    A key way Black Americans were left out was from a process called redlining. Redlining refers to maps made by the FHA to determine what communities would be able to access mortgages. Communities were graded A-D and black communities were almost universally rated D which was the lowest grade. These maps were color coded with grade D being red hence the name. (Madrigal 2014). Neighborhoods that were mixed also had lower ratings. There is a famous story of a neighborhood in Detroit that was majority white that the FHA did not want to insure due to its proximity to an African American community. A 6 foot high wall was built and the FHA insured the neighborhood. What this exclusion meant was that Black Americans were not able to access the insured mortgages which gave them a far harder time to obtain a mortgage. (Gross 2017). The redlining map of Philadelphia is seen below.

Even if black families were able to afford houses without favorable loans they faced further discrimination. The quintessential post war suburbs are the levittowns built around major American cities. Some of the best known are located outside of New York and Philadelphia. These developments were able to be built due to the loans available by the FHA and the government providing infrastructure such as highways. This was great for many Americans but, Levittowns were designed to be all white. Realtors could not sell to black families. In fact, people selling their houses explicitly were not allowed to sell them to a black family. This however, was not simply the work of  private business as the FHA encouraged neighborhoods to be segregated. This caused many black Americans to both not only be restricted from the means many needed to be able to purchase a suburban house, but also even the chance to. (Herbes, Smith and Strain 2003).

Below is a documentary that explains redlining and the FHA in greater detail.