Throughout history home ownership has played an important role in achieving the American Dream and generational wealth accumulation. And yet, the gap in homeownership between white and black Americans is larger today than it was more than 50 years ago.
The events described below are intended to provide essential context because we believe that the more we understand our past, the better equipped we will be to drive meaningful, lasting change for generations to come.
- Federally chartered savings bank designed for a population of four million newly emancipated American slaves
- During the Bank’s existence, it had over $57 million in deposits and over 70,000 depositors
- In 1874 due to overexpansion, mismanagement, abuse and fraud the Bank was shut down leaving 61,144 depositors with losses of nearly $3 million
- Prohibited discrimination based on race
- Fortified by the 14th Constitutional Amendment, “No state shall make or enforce any law which shall…deprive any person of life, liberty, or property…nor deny to any person…equal protection of the laws.”
U.S. Supreme Court rules that “Separate but Equal” is lawful.
- In 1921, Tulsa’s Greenwood District had a population of 10,000 and thrived as the epicenter of African American business and culture. Known as “Black Wall Street,” it was the wealthiest black community in the United States at that time.
- In a two-day massacre (known as the Tulsa Massacre) occurring in May of that year, a mob of white residents destroyed more than 35 blocks of the district, killing or seriously injuring hundreds of Black Americans and causing millions of dollars in property damage.
- Include context that this is one of many/representative of other devastating events
- The Jim Crow laws were a collection of state and local statutes that legalized racial segregation.
- The laws—which existed for about 100 years, from the post-Civil War era until 1968—were meant to marginalize African Americans by denying them the right to vote, hold certain jobs, or get an education.
- Those who attempted to defy Jim Crow laws often faced arrest, fines, jail sentences, violence and death.
1930 - 1960
- The economic collapse of the early 30’s led to the implementation of a series of programs, reforms and regulations known as The New Deal. The New Deal, which included the creation of the Federal Housing Administration (FHA), was designed by then President Franklin Roosevelt to address a variety of economic concerns, including a depressed housing market.
- The policies of the FHA, however, exacerbated the existing racial divide. The FHA insured only mortgages to primarily white neighborhoods on the edges of metropolitan neighborhoods. African Americans and other people of color were excluded from the new suburban communities and pushed instead into inner city housing. At the same time, the FHA was subsidizing builders who were mass-producing entire subdivisions for whites — and requiring that none of the homes be sold to African Americans (who were considered “high risk”). These policies led to the then-standard practice of redlining.
- The GI Bill was passed by Congress in 1944 to create assistance programs for US military veterans.
- While the GI Bill’s language did not specifically exclude African American veterans from its benefits, it was structured in a way that ultimately shut doors for the 1.2 million Black veterans who had bravely served their country during World War II.
- In many cases, benefits were administered by an all-white Veterans Administration at the state and local level. Local banks in the south often refused to lend money to African Americans to buy a home, even with the government backing the loan. And many of America’s new, suburban neighborhoods prohibited African Americans from moving in.
- In addition, from 1924 to 1950, The National Association of Realtors Code of Ethics forbade realtors from integrating neighborhoods, and state licensing authorities could revoke licenses for violating the Code of Ethics.
- Those discriminatory practices further segregated housing communities and prevented people of color from accumulating wealth through homeownership. “African American families that were prohibited from buying homes in the suburbs in the 1940s and 50s, and even into the 1960s, by the Federal Housing Administration gained none of the equity appreciation that whites gained,” says historian and academic Richard Rothstein in the film Segregated by Design, which is based on his acclaimed book, The Color of Law.
- Signed by President Kennedy, this order prohibits discriminatory practices related to the sale, leasing, rental, or other disposition of properties and facilities owned or operated by the federal government or provided with federal funds.
Enacted by Congress, Title VI of the Act ratified and expanded Kennedy’s order by prohibiting discrimination on the basis of race, color, or national origin in programs and activities receiving federal financial assistance, including any housing receiving federal funding.
Title VIII of the Civil Rights Act of 1968 – the Fair Housing Act - is enacted. It expanded on the protections and prohibitions of the 1953 Act and added enforcement provisions.
The Truth in Lending Act, Title I of the Consumer Credit Protection Act, (P.L. 90-321) becomes law. The act requires lenders, including lenders in the mortgage industry, to disclose terms and cost of loans so that consumers can make informed choices about credit.
- President Clinton issues Executive Order No. 12892, requiring federal agencies to "affirmatively further fair housing" in their housing programs, makes the Secretary of HUD responsible for coordinating that effort, and establishes the President's Fair Housing Council to assess the success of federal programs in promoting integrated housing.
- Congress enacts the Home Ownership Equity Protection Act to address abusive lending practices.
Congress passes the Secure and Fair Enforcement for Mortgage Licensing Act of 2008, Title V of the Housing and Economic Recovery Act, to improve underwriting standards by the establishment of a registration system for mortgage originators.
Congress initiates a major overhaul of the nation's financial system through the Dodd-Frank Wall Street Reform and Consumer Protection Act. Title X of the Act creates the Bureau of Consumer Financial protection. Title XIV of the Act, also known as the Mortgage Reform and Anti-Predatory Lending Act, amends the Truth in Lending Act and other consumer financial laws to prevent mortgage-related abuses and ensure the availability of responsible, affordable mortgage credit. Several members of the Congressional Black Caucus contribute language to the law.