The Great Depression prompted the federal government to intervene in housing markets in new ways, both to provide more affordable housing options for citizens in need as well as to stimulate the economy through new construction. State-sanctioned segregation, however, ensured that opportunities for BIPOC to benefit from these new housing options were limited, while federally-backed lending programs designated most communities of color as unfavorable for public and private investment. Even in the run up to World War II, as increased demand for labor in new parts of the country kicked off a second great migration, BIPOC continued to face discrimination across housing markets.

Legend

  •   Hindered racial equality
  •   Mix of helped and hindered racial equality
  •   Helped advance racial equality
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    The first public housing developments were built as part of a pilot program to stimulate construction and replace older, run-down housing and neighborhoods. Administered under the Public Works Administration (PWA), these developments represented the first major investment in housing by the federal government. They were also notable for who they were built to serve: working class families of all races, with one-third of units going to Black families. Though these public housing units were racially segregated to align with the racial composition of the neighborhoods in which they were located, they nonetheless offered thousands of Black families a chance to live in affordable, better-quality housing.

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    The Federal Housing Administration (FHA) was created to bring stability to the banking system during the Great Depression by insuring and subsidizing home mortgages. This allowed banks to lend and households to purchase homes more securely and affordably than ever before and expanded access to homeownership to a larger share of the American population. To protect against value loss on insured properties, however, the FHA used color-coded maps developed by local real estate groups to designate the neighborhoods in which it would insure mortgages, generally excluding those with a high share of multifamily housing and/or mixed or majority BIPOC populations, a practice called ‘redlining’.

  • mixed

    As a compliment to the FHA’s mortgage lending program, the federal government also passed Section 207 of the 1934 National Housing Act to offer similar mortgage insurance benefits to owners of multifamily rental housing. However, while the FHA program emphasized new construction, Section 207 was only applicable to the purchase or rehabilitation of existing housing. It also defined multifamily housing as five or more units, excluding many smaller property owners from using this program to upgrade or preserve their affordable rental units. Properties owned by or located in areas with large BIPOC communities were also generally blocked from accessing this benefit.

  • mixed

    The 1937 Act permanently authorized the United States Housing Authority (USHA) to fund the large-scale construction of affordable housing. This USHA differed from the PWA public housing pilot program by lending funds to local authorities to build the housing to best meet the needs of their low-income residents, which gave municipalities more leeway in determining the type, quality and locations of this housing. The Act retained, however, the requirement that public developments be segregated by race according to the population in the neighborhoods where they were built. Many cities thus built higher-quality housing in majority-white neighborhoods with better schools and employment opportunities, while siting Black-only developments in areas with few amenities and in greater proximity to industrial facilities and environmental hazards.

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    The second mass migration more than tripled the number of Black Americans who left the South during the first migration, with hopes of better economic opportunity and an escape from Jim Crow laws again attracting many of the 5 million migrants to cities in the North and West. Most of those cities, however, now had restrictive zoning laws in place that severely limited housing options available to BIPOC-led households. In the few remaining integrated neighborhoods, the influx of large numbers of Black households prompted many white families to move elsewhere, kicking off the first wave of ‘white flight’ out of increasingly segregated urban neighborhoods.

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    The outbreak of World War II shifted residential patterns in the U.S. as new industrial facilities were developed across the country to produce needed military supplies. Black and white workers alike were encouraged to relocate to these new employment centers, where they often worked together in integrated factories and shipyards. Yet the housing provided by the Department of Defense to shelter war workers and their families remained segregated, and where demand for housing exceeded supply, Black workers were generally excluded altogether from these developments and forced to live farther from employment opportunities. Many Black families stayed in these neighborhoods after the war, building communities that would later become targets for urban renewal efforts.

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    Known as the GI Bill, this Act offered low-cost mortgages to returning servicemembers to purchase homes in FHA-approved neighborhoods. Properties in those neighborhoods, however, tended to be available only to white households, leading to a boom in white property ownership that not only exacerbated neighborhood segregation, but also gave white households access to an appreciable asset from which they could build wealth. Meanwhile, households of color, unable to benefit from these opportunities, became even further concentrated in neighborhoods with substandard housing, low appreciation, and a lack of public and private investment.

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