Federal Housing Administration (FHA) Term Analysis

The director of the Federal Housing Administration supported Tenerowicz, stating that the presence of African Americans in the area would threaten property values of nearby residents. Foreman was forced to resign. The Federal Works Agency then proposed a different project for African Americans on a plot that the Detroit Housing Commission recommended, in an industrial area deemed unsuitable for whites. It soon became apparent that this site, too, would provoke protests because it was not far enough away from a white neighborhood. First Lady Eleanor Roosevelt protested to the president. The FWA again reversed course and assigned African Americans to the Sojourner Truth project. Whites in the neighborhood rioted, leading to one hundred arrests (all but three were African Americans) and thirty-eight hospitalizations (all but five were African Americans).

The full cycle went like this: when a neighborhood first integrated, property values increased because of African Americans’ need to pay higher prices for homes than whites. But then property values fell once speculators had panicked enough white homeowners into selling at deep discounts.
Falling sale prices in neighborhoods where blockbusters created white panic was deemed as proof by the FHA that property values would decline if African Americans moved in. But if the agency had not adopted a discriminatory and unconstitutional racial policy, African Americans would have been able, like whites, to locate throughout metropolitan areas rather than attempting to establish presence in only a few blockbusted communities, and speculators would not have been able to prey on white fears that their neighborhoods would soon turn from all white to all black.

The Fair Housing Act of 1968 prohibited future discrimination, but it was not primarily discrimination (although this still contributed) that kept African Americans out of most white suburbs after the law was passed. It was primarily unaffordability. The right that was unconstitutionally denied to African Americans in the late 1940s cannot be restored by passing a Fair Housing law that tells their descendants they can now buy homes in the suburbs, if only they can afford it. The advantage that FHA and VA loans gave the white lower-middle class in the 1940s and ‘50s has become permanent.