For decades, the United States institutionally enforced racist policies that intentionally left BIPOC people out of crucial housing programs and benefits, preventing these communities from building wealth and equity and causing long-term social and economic damage that continues to be felt today. This timeline offers a snapshot of the federal policies that laid the groundwork for systemic racism and discrimination in housing.
The Home Owners’ Loan Corporation (HOLC)
The Home Owners’ Loan Corporation (HOLC) was created as one of President Franklin D. Roosevelt’s New Deal programs, which aimed to address the multiple crises and negative effects of the Great Depression. The goal of the HOLC was to stabilize the mortgage lending system and assist homeowners who were facing foreclosure on their homes. The HOLC created “Residential Security” maps of major U.S. cities that outlined the mortgage lending risk of different areas. The neighborhoods that were considered high-risk or “hazardous” were “redlined” by lending institutions, which denied access to capital investment in these neighborhoods. This practice limited opportunities for homeownership and economic mobility. The neighborhoods that were redlined were mostly low-income and BIPOC communities, deepening segregation and inequality.
The Federal Housing Administration
In response to the housing crisis caused by the Great Depression, President Roosevelt created the Federal Housing Administration (FHA) as part of the New Deal. The goal of the FHA was to help middle-class renters become homeowners, but the agency refused to insure homes in or near Black neighborhoods. This barred Black people from becoming homeowners and established redlining as an industry practice by systematically withholding credit from homebuyers in Black neighborhoods.
The Federal National Mortgage Association
Congress created the Federal National Mortgage Association (known as “Fannie Mae”) to boost the failing single-family housing finance system by making low-cost loans widely available. In order to do this, Fannie Mae buys mortgages from local banks and securitizes them, freeing the banks to increase mortgage lending. The FHA guidelines severely limited Black access to mortgages, and only 2 percent of the $120 billion that went to subsidized housing between 1934 and 1962 went to nonwhites. The institutionalized racism embedded in the lending patterns and guidelines of these programs in the 1930s prevented Black families from building wealth and equity through homeownership like their white counterparts, and these practices still exist today.
The GI Bill’s Promise
The GI Bill, which was designed to support returning servicemen following World War II, promised many benefits, including low-interest home loans, but the program excluded Black servicemen from accessing these benefits. Black veterans were left out of the post-war housing boom, which was a key period for white families, who were able to build intergenerational wealth and equity through homeownership.
The American Housing Act
The American Housing Act of 1949 increased the federal government’s role in housing. It included significant funding and authorized the use of eminent domain to clear slums, which would pave the way for future urban renewal.
The U.S. Interstate System and the Destruction of Black Communities
The National Interstate and Defense Highways Act funded the construction of the Interstate Highway System with $25 billion for 10 years, making it the largest public works project in U.S. history. Highway construction increased the development of the suburbs greatly, mostly benefitting white families. The highways that were built under the act cut through and destroyed urban, mostly Black, neighborhoods and communities, contributing to displacement and pushing the mostly BIPOC residents living in these areas further into poverty.
The Fair Housing Act expanded protections and prohibited discriminatory practices in the sale, rental, and financing of housing based on race, religion, national origin, sex, and – following later amendment – handicap and family status. Despite the progress represented by the act, the rate of BIPOC homeownership is still below the rate of white counterparts. As of 2019, white homeownership rates were still soaring compared to rates for nonwhites. In fact, white households are 71% more likely to own their homes.
Affirmatively Furthering Fair Housing
The U.S. Department of Housing and Urban Development (HUD) established a new regulation to enforce the Affirmatively Furthering Fair Housing (AFFH) requirements outlined in the Fair Housing Act. This move was made to address the effects of longtime segregation, to combat discrimination in housing, and to ensure local governments and public housing authorities did not use discriminatory practices in their housing programs.
Preserving Community and Neighborhood Choice rule
Under HUD Secretary Ben Carson, the AFFH rule was repealed and replaced, stripping guidance in the Fair Housing Act for how states and localities should address discriminatory housing practices and undo the harms caused by segregation, housing discrimination and disinvestment in BIPOC communities.
“Color of Law: A Forgotten History of How Our Government Segregated America,” page 64, 4th paragraph;
NPR. A 'Forgotten History' Of How The U.S. Government Segregated America, May 3 2017.
Erin Blakemore. How the GI Bill’s Promise Was Denied to a Million Black WWII Veterans, History.com, June 21, 2019. https://www.history.com/news/gi-bill-black-wwii-veterans-benefits
Katie Nodjimbadem. The Racial Segregation of American Cities Was Anything but Accidental, Smithsonian Magazine, May 30, 2017.
Massachusetts Budget and Policy Center. ‘A History of Racist Federal Housing Policies’, August 6, 2021. https://massbudget.org/2021/08/06/a-history-of-racist-federal-housing-policies/
Bruce Mitchell and Juan Franco. HOLC “Redlining” Maps: The Persistent Structure Of Segregation And Economic Inequality, National Community Reinvestment Coalition, March 20, 2018.
National Low Income Housing Coalition. HUD’s Interim Final Rule Reinstating AFFH Definition Published in Federal Register, Memo to Members and Partners, June 14, 2021. https://nlihc.org/resource/huds-interim-final-rule-reinstating-affh-definition-published-federal-register
National Low Income Housing Coalition. Trump Administration Eliminates Affirmatively Furthering Fair Housing Rule, NLIHC and other Advocates Condemn Action, Rhetoric, Memo to Members and Partners, July 27, 2020. https://nlihc.org/resource/trump-administration-eliminates-affirmatively-furthering-fair-housing-rule-nlihc-and-other
PBS. Go Deeper, Where Race Lives, Race - The Power of an Illusion. 2003. https://www.pbs.org/race/000_About/002_06_a-godeeper.htm
Stephen J. Dubner. The Controversial Legacy of Slum Clearance, Freakonomics, September 30, 2011. https://freakonomics.com/2011/09/the-controversial-legacy-of-slum-clearance/