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46-403: The HOLC created a housing appraisal system of color-coded maps that categorized the riskiness of lending to households in different neighborhoods. While the maps relied on various housing and economic measures, they also used demographic information (such as the racial, ethnic, and immigrant composition of neighborhoods) to categorize creditworthiness. Since Kenneth T. Jackson's work in the 1980s,

92-640: A luxury, but a necessity of the American middle class." "The changing ethnic composition of the urban population also increased middle-class antipathy to the older neighborhoods, as Poles, Italians, Russians, and assorted Eastern and Southern Europeans, most of them Jews or Catholic, poured into the industrialised areas after 1880. Although only one-third of all Americans lived in cities in 1890, two-thirds of all immigrants did. By 1910, about 80 percent of all new arrivals at Ellis Island were remaining in cities, as were 72 percent of all of those ' foreign born '. Toward

138-460: A new type of building appeared, ' balloon frame ,' that "would absorb most of the population growth of the United States over the next one hundred and fifty years." A "new structure could be erected more quickly by two men than the [European-style] heavy timber frame by twenty… [so that] many poorly paid immigrant groups had homeownership rates as high [as] white Americans." "For the first time in

184-594: A number of studies have found that HOLC was a key promoter of redlining and a driver of racial residential segregation and racial wealth inequality in the United States. HOLC was established as an emergency agency under Federal Home Loan Bank Board (FHLBB) supervision by the Home Owners' Loan Act of 1933, June 13, 1933. It was transferred with FHLBB and its components to the Federal Loan Agency by Reorganization Plan No. I of 1939 , effective July 1, 1939. It

230-450: A personal bastion against society, a place of refuge, free from outside control," with "the emerging values of domesticity, privacy, and isolation reach[ing] fullest development in the United States. The big, mean city, with its confidence men and squalor, did not promise the same haven as the suburbs. The "ideal house came to be viewed as resting in the middle of a manicured lawn or picturesque garden ." In 1833 in newly rebuilt Chicago ,

276-409: Is a long-standing and almost universal process. They primarily argue that as incomes rise, most people want the range and choice offered by automobiles. In addition, there is no significant evidence directly linking the development of highway systems to declining urban populations. Price V. Fishback Price V. Fishback (born c. 1955) is an economic historian. He is a professor of economics at

322-633: The Bancroft Prize , given by Columbia University for the year's best work of history, and the Francis Parkman Prize , awarded by the Society of American Historians. Other writers and academics have written on the subject of the increasing suburbanization of the USA. For instance, some social scientists point out the role played by racism. During World War I, the massive migration of African Americans from

368-490: The Industrial Revolution , every major city was a "point" on a map that could be walked from edge to centre in two or three hours. Cities had five characteristics: “Suburbs, then, were socially and economically inferior to cities when wind, muscle, and water were the prime movers of civilisation… Even the word suburb suggested inferior manners, narrowness of view, and physical squalor." Between 1815–1875, however,

414-700: The University of Arizona and a research associate at the National Bureau of Economic Research . His research on American economic history has included employment and labor in the nineteenth and early twentieth centuries especially in the coal industry , and government programs of the New Deal . His work has been recognised by the Cliometric Society via their awarding him a Clio Can in recognition of his "exceptional support of cliometrics ". Prior to arriving to

460-463: The automobile was initially slow, so that even "as late as 1918 the War Industries Board could regard the shutdown of the entire [automobile] industry as a mere inconvenience." However, "of even greater significance …was the truck [which] could do four times the work of a horse-drawn wagon which took up the same street space." Building roads to facilitate the "removal of horses from cities

506-404: The American suburb is a remarkable and probably lasting achievement." However, due to the energy inefficiency of the suburb, Jackson believed that the "long process of suburbanization, which has been operative in the United States since about 1815, will slow over the next two decades and that a new kind of spatial equilibrium will result early in the next century." Crabgrass Frontier won both

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552-719: The American suburban experience, which he views as unique. He states that "the United States has thus far been unique in four important respects that can be summed up in the following sentence: affluent and middle-class Americans live in suburban areas that are far from their work places, in homes that they own, and in the centre of yards that by urban standards elsewhere are enormous. This uniqueness thus involves population density, home-ownership, residential status, and journey-to-work." His working definition of suburbs has four components: function (non-farm residential), class (middle and upper status), separation (a daily journey-to-work), and density (low relative to older sections). Also dominant in

598-629: The FHA-insurability of their properties in ads for prospective buyers. Redlining was an established practice in the real estate industry before the federal government had any significant role in it; to the extent that any federal agency is to blame for perpetuating the practice, it is the Federal Housing Administration and not the Home Owners' Loan Corporation. Crabgrass Frontier Crabgrass Frontier: The Suburbanization of

644-551: The HOLC gave federal support to real-estate practices that helped segregate American housing throughout the 20th century. The effects of redlining, as noted in HOLC maps, endures to the present time. A study released in 2018 found that 74 percent of neighborhoods that HOLC graded as high-risk or "hazardous" are low-to-moderate income neighborhoods today, while 64 percent of the neighborhoods graded "hazardous" are minority neighborhoods today. "It's as if some of these places have been trapped in

690-525: The HOLC used the FHA's discriminatory guidelines for its maps. As for private lenders, though Kenneth T. Jackson 's claim that they relied on the HOLC's maps to implement their own discriminatory practices has been widely repeated, the evidence is weak that private lenders had access to the maps. By contrast, it is well documented that private lenders understood which neighborhoods the FHA favored and disfavored; suburban greenfield developers often explicitly advertised

736-470: The South resulted in an even greater residential shift toward suburban areas. The cities became seen as dangerous, crime-infested areas, while the suburbs were seen as safe places to live and raise a family, leading to a social trend known in some parts of the world as white flight . This phenomenon runs counter to much of the rest of the world, where slums mostly exist outside the city, rather than within them. With

782-416: The United States is a book written by historian Kenneth T. Jackson and published in 1985. Extensively researched and referenced, the book takes into account factors that promoted the suburbanization of the United States , such as the availability of cheap land, construction methods, and transportation, as well as federal subsidies for highways and suburban housing. Jackson attempts to broadly interpret

828-410: The United States was to segregate the races, to concentrate the disadvantaged in inner cities, and to reinforce the image of suburbia as a place of refuge for the problems of race, crime, and poverty." By grading certain areas based on "desirability" i.e., more recently constructed and lacking of minorities, the government, through Home Owners Loan Corporation encouraged middle class white flight from

874-592: The University of Arizona, Fishback was an Assistant and later Associate Professor at the University of Georgia . Fishback received a B.A. with honors in Mathematics and Economics from Butler University in 1977. He then received his M.A. and Ph.D. from the University of Washington in 1979 and 1983, respectively. His Ph.D. Thesis was entitled "Employment Conditions of Blacks in the Coal Industry, 1900-1930." His advisor

920-436: The bonds to purchase mortgage loans from lenders. The loans purchased were for homeowners who were having problems making the payments on their mortgage loans "through no fault of their own". The HOLC refinanced the loans for the borrowers. Many of the lenders gained from selling the loans because the HOLC bought the loans by offering a value of bonds equal to the amount of principal owed by the borrower, plus unpaid interest on

966-408: The book is the notion that the wealthy began the flight from the city first—something that the middle classes eventually emulated as city tax rates gradually increased to pay for resulting urban problems—as the poorer classes remained in the older central urban areas. From ancient times, the city's primary function was as a central meeting place to conduct business. Jackson argues that before 1815 and

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1012-516: The building of the Interstate Highway System , and have concluded that it and other policies of the Federal government played a significant role in American suburbanization. The building of an efficient network of roads, highways and superhighways, and the underwriting of mortgages for suburban one-family homes, had an enormous influence on the pace of suburbanization. In effect, the government

1058-598: The city. Meanwhile, the Federal Housing Administration "helped to turn the building industry against the minority and inner-city housing market, and its policies supported the income and inner-city housing market." FHA avoided providing mortgages to those in ethnic or minority neighborhoods, further promoting white flight . "To this fear were added specific programs to tax property so as to create public improvements and jobs to benefit working class voters. The observation of Lord Bryce that municipal government

1104-558: The doctrine of forcible annexation ." However that would change toward the end of the century: "the first really significant defeat for the consolidation movement came when Brookline spurned Boston in 1874. [Thereafter] virtually every other Eastern and Middle Western city was rebuffed by wealthy and independent suburbs." By the turn of the 19th century, a middle class expectation of having residential space had emerged, which Jackson attributes to work of Andrew Jackson Downing , Calvert Vaux , and Catharine Beecher . "Family came to be

1150-463: The end of the nineteenth century, mayors in New York, Chicago, and Boston were being elected by immigrant votes, and the possibility was raised that urban officials might be unwilling to use the police against labor radicals , most of whom came from Europe. Jackson examined the New Deal 's contributions to public housing and concludes that "the result, if not the intent, of the public housing program of

1196-440: The full-term of 20 to 30 years. Before that, "first mortgages were limited to one-of or two-thirds of the appraised value of the property", and loans had to be renewed every five years and interest rates were subject to revision every renewal. After World War II , encouraged by the emergence of new cities of wartime production and government assistance for veterans , increasing numbers of Americans could afford to buy homes. Given

1242-578: The history of the world, middle class families in the late nineteenth century could reasonably expect to buy a detached home on an accessible lot… the real price of shelter in the United States was lower than in the Old World." Intended to spur housing construction after the Great Depression , President Roosevelt 's Federal Housing Administration established minimum standards for home construction and low down-payment amounts, and home loans amortized for

1288-425: The increasing population of the older, more established suburban areas, many of the problems which were once seen as purely urban ones have manifested themselves there as well. These social scientists suggest that the historical processes of suburbanization and decentralization are instances of white privilege that have contributed to contemporary patterns of environmental racism . One team of writers have analysed

1334-445: The loan, plus taxes that the lender paid on the property. This value of the loan was the amount of the loan that was refinanced for the borrower. The borrower gained because they were offered a loan with a longer time frame at a lower interest rate. It was rare to reduce the amount of principal owed. Between 1933 and 1935, the HOLC made slightly more than one million loans. At that point it stopped making new loans and then focused on

1380-438: The loan. When the HOLC foreclosed, it typically refurbished the home. In many cases it rented out the home until it could be resold. The HOLC tried to avoid selling too many homes quickly to avoid having negative effects on housing prices. Ultimately, more than 800,000 people repaid their HOLC loans, and many repaid them on time. HOLC officially ceased operations in 1951, when its last assets were sold to private lenders. HOLC

1426-413: The massive growth of affordable dwellings accessible by the highway and train, families flocked to planned towns such as Levittown where all the details such as schools and public works were already in place so that builders could erect as many as thirty homes a day to meet demand. Most importantly, the decentralization of post-World War II American cities led to the self-sufficiency of the suburbs around

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1472-570: The means to live in bucolic surroundings, to socialize in country clubs and still commute to work downtown; these were the railroad suburbs . However, "railroad commuting was not only expensive but… the steam engine generated speed slowly [so] that railroad suburbs were usually discontinuous and separated by …open space." After the American Civil War came the Age of the Trolley bringing commuting to

1518-463: The middle class and expanding the city. The "extraordinary prosperity and vitality of most urban cores between 1890 and 1950 cannot be understood without reference to the streetcar systems… by the turn of the century, a 'new city,' segregated by class and economic function and encompassing an area triple the size of the older walking city had clearly emerged… [so that] by 1904 inventor Frank Sprague could reasonably claim: "The electric railway has become

1564-403: The most potent factor in our modern life." "In 1890, the number of passengers carried on American street railways (including cable and elevated systems) was more than two billion per year, or more than twice that of the rest of the world combined." Tracks "radiated out from the centre like spokes [forcing] anyone using public transit to rely on the central business district ." The influence of

1610-501: The neighborhood evaluations largely align with race and with ongoing disparities, it is unclear exactly how much of an effect HOLC itself had. According to a paper by economic historian Price V. Fishback and three co-authors, issued in 2021, the blame placed on HOLC is misplaced. Far from "ironically" issuing a few loans to African-Americans in an "initial phase" and then becoming a major promoter of redlining, HOLC actually refinanced mortgage loans for African-Americans in near proportion to

1656-419: The next 30–35 years, and suffered long-run declines in home ownership, house values, and credit scores. HOLC's evaluation of neighborhoods in the 1930s correlates with "health, employment, education, and income measures" in these same neighborhoods decades later. Since the rediscovery of HOLC documents in the 1980s, there has been considerable debate about the exact role of HOLC and its maps in redlining: even as

1702-623: The past, locking neighborhoods into concentrated poverty," said Jason Richardson, director of research at the NCRC, a consumer advocacy group. A 2020 study in the American Sociological Review found that HOLC led to substantial and persistent increases in racial residential segregation. A 2021 study in the American Economic Journal found that areas classified as high-risk on HOLC maps became increasingly segregated by race during

1748-412: The repayments of the loans. The typical borrower whose loan was refinanced by the HOLC was more than 2 years behind on payments of the loan and more than 2 years behind on making tax payments on the property. The HOLC eventually foreclosed on 20 percent of the loans that it refinanced. It tended to wait until the borrower had failed to make payments on the loan for more than a year before it foreclosed on

1794-477: The share of African-American homeowners. The pattern of loans had basically no relationship to the "redlining" maps because the program to create the maps did not even begin until after 90% of HOLC refinancing agreements had already been concluded. However, the HOLC shared their maps with the other major New Deal housing program, the Federal Housing Administration . But, the FHA already had its own discriminatory program of systematically rating urban neighborhoods and

1840-406: The situation began to change in the United States. With new transportation alternatives such as the steam ferry, omnibus , the commuter railroad, the horsecar , the elevated railroad , and the cable car came "an exodus that would turn cities inside out and inaugurate a new pattern of suburban affluence and centre despair." The steam locomotive in the mid 19th century provided the wealthy with

1886-510: The urban core, both as the place of work and place of dwelling. "Recent changes in Europe support the thesis that suburbanization is a common human aspiration and its achievement is dependent upon technology and affluence. Since William Levitt erected his first houses outside Paris in 1965, the European landscape has become littered with all the trappings of suburban America." "For better or worse,

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1932-400: Was 'The conspicuous failure of the United States' was often quoted. The import of such projections was not lost on middle-class families, who often took the opportunity that low price and good transportation afforded to move beyond city jurisdictions." "Throughout the nineteenth century… American cities annexed adjacent land and grew steadily… the predominant view in the nineteenth century was

1978-778: Was assigned with other components of abolished FHLBB to the Federal Home Loan Bank Administration (FHLBA), National Housing Agency , by EO 9070, February 24, 1942. Its board of directors was abolished by Reorganization Plan No. 3 of 1947, effective July 27, 1947, and HOLC was assigned, for purposes of liquidation, to the Home Loan Bank Board within the Housing and Home Finance Agency . It was terminated by order of Home Loan Bank Board Secretary, effective February 3, 1954, pursuant to an act of June 30, 1953 (67  Stat.   121 ). The HOLC issued bonds and then used

2024-433: Was encouraging the transfer of the middle-class population out of the inner cities and into the suburbs, sometimes with devastating effects on the viability of the city centres. However, some argue that the effect of Interstate Highway Systems on suburbanization is overstated. Researchers holding this view believe city centre populations would have declined even in the absence of highway systems, contending that suburbanization

2070-901: Was only applicable to nonfarm homes, worth less than $ 20,000. HOLC also assisted mortgage lenders by refinancing problematic loans and increasing the institutions' liquidity. When its last assets were sold in 1951, HOLC turned a small profit. HOLC is often cited as the originator of mortgage redlining . HOLC maps generated during the 1930s to assess credit-worthiness were color-coded by mortgage security risk, with majority African-American areas disproportionately likely to be marked in red indicating designation as "hazardous." These maps were made as part of HOLC's City Survey project that ran from late 1935 until 1940. Perhaps ironically, HOLC had issued refinancing loans to African American homeowners in its initial "rescue" phase before it started making its redlining maps. The racist attitudes and language found in HOLC appraisal sheets and Residential Security Maps created by

2116-402: Was widely considered a proper object for the expenditure of public funds. Indeed, the private car was initially regarded as the very salvation of the city, a clean and efficient alternative to the old-fashioned, manure-befouled, odoriferous, space-intensive horse." This effort was so successful that "as Sinclair Lewis ' popular 1922 novel Babbitt indicated, the private car had become no longer

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