Some of My Best Friends Are Black (19 page)

J. C. Nichols was so intimately involved with the formation of the FHA that he was called to consult privately with FDR in the Oval Office. When America’s housing policy was drafted, whole chunks were lifted straight out of the Nichols Company handbook, practically word for word. Through the HOLC, the federal government developed a four-tiered classification system for neighborhoods: high-end, all-white neighborhoods were given the highest rating; white working- and middle-class neighborhoods were given a secondary rating; Jewish and ethnically mixed areas were rated third; and the lowest possible rating was given to black neighborhoods—regardless of the quality of the housing stock or the income of the inhabitants. Then the HOLC went through every block on every map of every city in America, giving each neighborhood a color-coded designation. Black neighborhoods were coded red.

The four-tiered rating system devised by the HOLC had been intended as a metric to assess credit risk and therefore assign a proper rate of interest, but black neighborhoods were not simply assigned higher interest rates. They were not assigned anything. In a process that became known as redlining, the FHA cordoned off black neighborhoods and designated them wholly ineligible for federal subsidies and mortgages. According to the federal law of the United States, a black person anywhere was now a threat to property values everywhere. This was a policy
based on nothing more than the say-so of the men who stood to profit from it.

Once the FHA guidelines were in place, private lending institutions adopted them as their standard, too. So did insurance companies. If the government was unwilling to cover the risk, why should they? Once a neighborhood was redlined, residents found it virtually impossible to get any kind of legitimate mortgage, home owners’ insurance, or home improvement loan, even if those instruments weren’t federally insured. Inevitably, the legal embargo against fair lending in redlined neighborhoods sped the growth of predatory lending; blacks could get mortgages, but usually at grossly inflated rates and with no consumer protections against fraud.

During the late 1930s and early 1940s, though still hampered by the Depression and World War II rationing, new home construction made a slow and steady return. FDR’s New Deal had laid the groundwork for the ultimate public-private partnership: an endless river of construction subsidies and federally backed mortgages, issued with almost no oversight and minimal preconditions. In fact, the only real restriction on FHA monies was that they be used in racially homogenous neighborhoods. The FHA’s official underwriting manual explicitly directed its agents to grant subsidies and back mortgages only in areas protected by restrictive covenants. “If a neighborhood is to retain stability,” the manual stipulated, “it is necessary that properties shall continue to be occupied by the same racial and social classes. A change in social or racial occupancy generally leads to instability and a reduction in values.” In the suburbs, it became completely irrelevant that the government couldn’t impose racial zoning laws. Cities no longer planned themselves—corporations did most of the work. Thanks to the FHA, private developers had access to billions of dollars in nearly risk-free capital, which allowed them to buy up vast tracts of land and operate them as they saw fit, with a unilateral say on what could be built and who could live in it.

As the veterans of World War II returned home and the baby boom took off, America’s High-Class Developers shifted gears and started cashing in on the surging demand for middle-class housing. The “refinement of the suburban estate” was no longer a luxury for the well-to-do; it
was a mass-produced consumer good for everyday use. Developers built two- and three-bedroom starter homes, identical Cape Cods and ranch houses stamped out block after block. America had started to sprawl.

In 1947, the developers of Long Island’s Levittown perfected an assembly line technique for home building. FHA subsidies enabled them to clear a bunch of empty potato fields and start plopping down houses at a rate of thirty per day. Outside Los Angeles in 1950, the entire town of Lakewood simply rose up in a matter of months out of an old 3,300-acre lima bean farm. And in Johnson County, Kansas, just adjacent to the million-dollar mansions of Mission Hills, J. C. Nichols opened up Prairie Village, an everyman’s Country Club District of modest homes with all the modern conveniences. Nichols even updated his sales pitch for the Cold War generation. “When you rear children in a good neighborhood,” he told a reporter from
Time
magazine, “they will go out and fight communism.”

After the war, the heroes of Normandy and Okinawa were duly rewarded by their country. The GI Bill gave low-interest, zero-percent-down mortgages to all returning servicemen—a chance to buy a piece of the American Dream. John and Jane Veteran came home from the war and flocked to suburbia, racing to grab their slice of white-picket paradise. At least, that’s what America likes to believe about itself. In truth, GI loans were simply FHA loans by another name, subject to the same redlining restrictions. When the whites of the Greatest Generation went looking for a place to call home, it was all but illegal for them to buy a home in a subdivision that didn’t exclude blacks. Realtors didn’t show white people anything else, because their money wasn’t any good anywhere else. Black veterans, on the other hand, could use their housing vouchers only in all-black areas; even with the GI Bill, many were still denied loans.

By 1950, new houses in America were going up at an average rate of four per minute, 75 percent of them in the suburbs, and nearly half of them bought under the GI Bill. By 1960, the population of Levittown had gone from zero to 80,000, all of it white. Lakewood, California, had gone from zero to 67,000, all of it white. And in 1960, Prairie Village, Kansas, was home to just over 50,000 white people. Some form of racial restriction
was used in over 50 percent of all subdivisions nationwide. They were so pervasive that when the Supreme Court finally ruled on the matter again, in 1948’s
Shelley v. Kraemer
, three of the justices had to recuse themselves because they lived in restricted neighborhoods. So it was by a vote of six to zero that the court finally struck them down.

But the court’s narrowly written opinion didn’t say that racial covenants couldn’t be used, just that they were not enforceable in a court of law—and good luck finding black home owners willing to take that issue to trial in the late 1940s. In the Kansas City metropolitan area, more racial housing covenants were used in the decade after 1948 than in all four decades prior. The last one was written in 1962. The residential color line in suburban Johnson County would not be broken until 1965.

In the history of race, slavery and segregation are always called out for what they did to blacks’ human and civil rights. Redlining and racial covenants never seem to get the same amount of play, despite the damage they did to blacks’ property rights. Slavery and segregation can’t be kept out of the history books; they’re too big. But the story of real estate is buried in the ground, so it’s easier to pretend it never happened. We get to act like all that money out in the suburbs came from nothing but honest, American hard work, and not a big, fat, racist handout from Uncle Sam.

The suburban landgrab of the twentieth century was one of the single greatest engines of wealth creation in human history. It took a country of second- and third-generation white-ethnic immigrants, vaulted them into the middle class, and sent all their kids to college. In 1946, you could buy a brand-new Prairie Village starter home for $6,000. That same home is worth around $375,000 today, which, adjusted for inflation, represents a return of well over 500 percent.

J. C. Nichols died in 1950, but his plan for permanence lives on. His racial covenants are still with us, auto-renewing year after year, like some horrible gym membership we’ll never get out of. Illegal and unenforceable, yes, but they can’t be stripped out. Not without the unanimous, notarized consent of every single member of every single home owners’ association collected and filed five years ahead of the original deed’s renewal date. A report by the
Kansas City Star
in 2005 found racial
covenants still on the books in more than a dozen Country Club District developments. Acreage-wise, the Country Club District is the largest contiguous parcel of land ever developed by a single company in the history of the United States. As of the mid-1990s, the Nichols Company’s assets were valued in excess of $500 million.

For blacks, however, the good times were not nearly so good. Between 1908 and 1948, racial covenants were used to exclude them from 62 percent of all new housing developments in Jackson County, Missouri (home of Kansas City proper). During that same period, racial covenants had excluded them from 96 percent of all new housing developments in Johnson County, Kansas. And between 1934 and 1962, the Federal Housing Authority backed mortgages for more than 77,000 homes in the Kansas City area; less than 1 percent of those loans went to blacks.

And they could have used them. In 1945, a survey showed that 85 percent of housing inhabited by blacks in Kansas City was substandard or borderline uninhabitable. By 1950, the black population of Kansas City had more than doubled once again, to more than 55,000. Eighteenth and Vine was bursting at its seams, yet it had expanded by only a few blocks to the east. There was nowhere for black people to go. Pretty soon, Bob Wood would show up knocking on their door, and he’d make them an offer they couldn’t refuse.

Susan Kurtenbach was still a young girl when the first black family moved to her neighborhood. It was in 1969, or maybe 1970. The Kurtenbachs were a working-class Catholic family. It was Susan, her parents, and her two older brothers, and they lived in the 5100 block of Lydia Avenue in a little tree-lined pocket neighborhood called Troostwood. Troostwood was right on the wrong side of the Berlin Wall of Kansas City, and Lydia Avenue was on the most vulnerable, easternmost frontier. Looking out Susan’s backyard, just a block across Paseo, was Norman Roetert’s Blue Hills, the neighborhood that was currently “in transition.”