The Ghetto, Public Policy, and the Jewish Exception

The other day I wrote about differences in how two sectors of Chicago's white community responded to the prospect of integration. I contrasted the response of Chicago's upper-class whites with its working class white ethnics. I am coming to hate all of these terms for their lack of precision. Chicago's white Jewish community demonstrates the problem. When I was researching my article on Detroit, African Americans generally told me that it was usually in the Jewish communities where desegregation began. Jews proved much more open to renting or selling to black families than other whites. I won't go so far as to say that there were no Jewish race riots in the mid-20th century, but I haven't read about a single one. 

What's more, I don't know how much should be made about the fact that Jews, like other whites, ultimately left after large number of blacks moved in. It is increasingly clear to me that white flight was not a mystical process for which we have no real explanation or understanding. White flight was the policy of our federal, state, and local government. That policy held that Americans should enjoy easy access to the cities via the automobile and live in suburbs without black people, who by their very nature degraded property and humanity.

I wish I were exaggerating. From Beryl Satter's Family Properties:

In the 1930s, the U.S. appraisal industry opposed the "mixing" of the races, which it believed would cause "the decline of both the human race and of property values." Appraisers ensured segregation through their property rating system. They ranked properties, blocks, and even whole neighborhoods according to a descending scheme of A (green), B (blue), C (yellow), and D (red). A ratings went to properties located in "homogenous" areas -- ones that (in one appraiser's words) lacked even "a single foreigner or Negro." Properties located in neighborhoods containing Jewish residents were riskier; they were marked down to a B or C. If a neighborhood had black residents it was marked as D, or red, no matter what their social class or how small a percentage of the population they made up. These neighborhoods' properties were appraised as worthless or likely to decline in value. In short, D areas were "redlined," or marked as locations in which no loans should be made for either purchasing or upgrading properties.

The FHA embraced these biases. It collected detailed maps of the present and likely future location of African Americans, and used them to determine which neighborhoods would be denied mortgage insurance. Since banks and savings and loan institutions often relied upon FHA rating maps when deciding where to grant their mortgages, the FHA's appraisal policies meant that blacks were excluded by definition from most mortgage loans. 

The FHA's Underwriting Manual also praised restrictive covenants as "the surest protection against undesirable encroachment" of "inharmonious racial groups." The FHA did not simply recommend the use of restrictive covenants but often insisted upon them as a condition for granting mortgage insurance....the FHA effectively standardized and nationalized the hostile but locally variable racial biases of the private housing industry.

In 1954, FHA official George W. Snowden told the Mortgage Bankers Association that since black home purchasers had an excellent credit record, it would be logical for mortgage bankers to use a "uniform, single-standard lending policy" for blacks and whites. The association's trade journal, Mortgage Banker, derided Snowden's comments as "one of the most remarkable statements ever heard from an MBA rostrum." In short, on the rare occasions that private bankers and savings and loan officials were presented with evidence of black creditworthiness, they rejected the information.
In Chicago, by the 1940s restrictive covenants covered "approximately half of the city's residential properties." There's nothing shadowy or overly complicated here. We do not need telepathy, nor do we need to look into the hearts of our government's officer to discern whether they were good people or not. It matters not whether the executors of these polices refrained from kicking the dog on the way out the door. The policies they proffered were patently racist. Their effects are unsurprising.

Satter's book is a mix of memoir and history chronicling the fleecing of Chicago's black community by the city's mortgage industry and her father's complicated efforts to fight that fleecing. Beryl Satter's father, Mark Satter, was Jewish. In his story and the stories of his neighbors in the Jewish enclave of Lawndale, we see two impulses born of oppression.

The first is genuinely sympathetic. Many of the Jews in Lawndale held fresh memories of their own discrimination, and could not fathom doing to blacks precisely what had been (and to some extent still was being) done to them:

Several of Lawndale's first black families were encouraged to seek housing there by Jewish friends. If viewed without prejudice, they had the makings of ideal neighbors. Most were Chicago-born middle-class men and women who purchased their buildings with substantial down payments. They managed to get modest mortgages to finance their purchases, and several paid off their mortgages early. The new black residents of Lawndale not only maintained their buildings but upgraded them.

The second impulse was darker:

...If many of Lawndale's residents were unsettled by the new arrivals from Mississippi, a small group of men saw something else in the faces of the hardworking new people now streaming into the area. They saw an opportunity.

Lawndale's operators, its schemers and hustlers, had much in common with the area's idealists. Like my father, several of them were first-or second-generation immigrant Jews. Their early years, like those of my father, were marked by anti-Semitism and poverty. But while my father's childhood disability and exposure to his father Isaac's social idealism inspired in him a profound empathy for the oppressed, these men drew very different conclusions from the harsh realities they had witnessed during the Depression. They had observed a world of victims and of victimizers, of those who "worked the system" and those who were destroyed by it. And they knew which side of that divide they wanted to be on.

In finding their way onto the proper side of the divide, Satter's operators hit upon the contract scheme: A speculator would purchase a home at a low price, and then offer it to a black family at a much steeper price. Except no deed would be transferred. The new black "buyer" would be responsible for monthly payments with high interest attached. Moreover, they would be responsible for any repairs and for all code violations. If one payment was missed the contractor would immediately move to evict, and the black "buyer" would forfeit not just their down-payment, but every payment they'd made since, and any money they'd put into upkeep. The speculator would then wash and repeat.

The scheme was dirty all the way through. Often the speculator would present himself to the family as a "broker" seeking the best deal on their behalf, concealing the fact that he was also the owner. He might steer the family to a lawyer who was in on the scheme, or a construction crew also in on the take. 

An illustrative example:

In 1953, for example, Sallie Bottom and her daughter, Jessie Jackson, bought a two-flat apartment on contract for $28,000, with a hefty down payment of $6,000. Their broker, Frank Bishofberger, concealed the fact that he was the building's owner and that he had purchased it only a few weeks before, for $17,000. By 1959, Bottom and Jackson had paid Bishofberger an additional $16,800. At that point, despite having made a down payment of over one-third of the building's true value--plus additional monthly installments that more than covered what Bishofberger had paid for the building--the two women fell behind, and Bishofberger moved to evict them.

And subsequently "sell" the building again to another black family. Satter estimates that some 85 percent of all properties sold to blacks in Chicago was done on contract. And there was no shortage of black buyers.  From Hirsch:

There is no doubt that many blacks were ready to take advantage of the new housing opportunities as they appeared. Both during and after the war, sustained economic gains permitted an increasing number of blacks to better their situation. Adjusting for inflation, an income of $5,000 in 1950 was roughly equivalent to earning $6,000 in 1960. In 1950, 10,200 (8.9%) of Chicago's nonwhite families earned $5,000 per year. Ten years later, 63,100 (34.1%) of the city's nonwhite families earned $6,000 or more. 

By the mid-1950s, the National Housing Inventory found 45,000 black families in Chicago in the market for middle- or upper-income housing. The augmented financial resources of at least some blacks were crucial to the destabilization of old racial borders. The high degree of residential segregation in Chicago produced a dual housing market: one for  whites, another for blacks. 

The restricted black housing supply and the overwhelming demand for new homes combined to inflate the cost of black housing. Rents in black areas ranged from 15% to 50% higher than that paid by whites for similar accommodations, the Illinois Inter-Racial Commission wrote in 1944. The difference was especially great, they added, in areas just beginning the process of racial succession. By 1960, even after a decade of new construction, the rents paid by blacks were still 10% to 25% higher than those paid by whites for equivalent shelter. Not only were rents higher, but the cost of purchasing housing was greater for blacks.

In mid-20th century Chicago, black people were, like most Americans, enthralled with homeownership. But the federal government which helped whites achieve the dream, worked to hinder black achievement. In the private sector, slum clearance schemes were hatched to destroy entire neighborhoods with minimal attendance to new housing. The city's aldermen worked overtime to guarantee that this new housing be erected only in the already overcrowded ghettoes. Out in the streets mobs of whites, thousands deep, rioted at the mere hint of integration. The unlucky black family caught in the sights of such a mob enjoyed only whimsy police protection. 

Taking all this in, it is hard to not conclude that in mid-20th century Chicago, black existed beyond the usual protections of the state. And so it was hunting season:

According to Favil Berns, the speculators saw their customers as "on their own. If you can survive in the wilderness, survive. If you can't, you go by the wayside, that's all. It is survival of the fittest." Selling on contract was closer toa blood sport than a livelihood. As Berns said, explaining why speculative contract sellers kept at the business despite having already made huge amounts of money, "It was like people who like to go out and shoot lions in Africa. It was the same the thrill...the thrill of the chase and the kill."

I am tempted to read something into this regarding the results of oppression, given that the speculators Satter is discussing are almost all Jewish, but I think that might be too far afield for me. And yet I think there is something instructive here, given that the Jewish reaction to integration is different. The race riots were not the result of few bad apples, but whole communities engaging in terrorism. Speculation and selling on contract is not a communal act, but the act of individuals. It's fair to say that the terrorists of Cicero--at times numbering some 4,000--represented a communal will. You can't really draw the same conclusion from the Jewish speculators. It's much easier to argue for "bad apples" in those cases.

And to argue for the great harm that the concept of whiteness has done to this country, because what you do find among the Jewish contractors is the same racism that you would see in Cicero. Satter reports one contractor asking a question of black people, that any bigot of Mississippi would have posed at the time, "How are young going to educate dumb animals?"