The digital lab at the University of Richmond put the Home Owners' Loan Corporation's records into an online database in 2016. (Map courtesy University of Richmond Digital Scholarship Lab)
Many of the predominantly African-American neighborhoods in Richmond that were redlined — a discriminatory federal practice that started in the 1930s and systemically reduced home ownership and lending in those areas based on race — have been gentrified or are facing gentrification, which translates to rapidly rising property values and longtime residents being squeezed out by higher taxes or rents, leaving the region scrambling to address the problem.
An Urban Institute study shows black homeownership rates in Richmond back to levels from 50 years ago, when housing discrimination was legal. (In 2015, the black homeownership rate was just over 40 percent, virtually unchanged since 1968 and 30 points behind the white homeownership rate, which saw modest gains over the same period.)
In January, two of these formerly redlined Richmond neighborhoods — Manchester and Blackwell — received $1 million from the Altria corporation to help address the need for affordable housing. The Maggie Walker Community Land Trust (MWCLT), formed in 2016, will use that $1 million to buy land and houses in an effort to create and maintain affordable housing in those specific areas.
In coordination with other housing nonprofits, MWCLT helps to acquire land and build or rehabilitate single-family homes. The trust retains ownership of the land beneath the house so that it can be sold below market value. Each year, the homeowner pays a modest lease to the land trust, and when they eventually sell the house, the homeowner agrees to pocket only half of its appreciation value. To qualify, a prospective buyer can earn only 50 to 115 percent of the area’s median income (for a family of four, that’s $61,900 to $89,000 a year) and must agree to these unique conditions. The remaining equity stays in the house, making it affordable for the next buyer, who then agrees to the same terms — thus ensuring that the house remains affordable in perpetuity.
“Now is the time to focus attention on Manchester and Blackwell — two neighborhoods that are beginning to experience rising real estate values,” says Laura Lafayette, the land trust’s board chairman.
This is but one component of an effort to provide the region with at least 15,000 more affordable housing units (rented and owned) — a goal cited in 2015 by the Richmond-based Partnership for Housing Affordability. Another is the distribution of unoccupied homes and lots once owned by the Richmond Housing and Redevelopment Authority to a variety of house-building nonprofits, which are renovating them and selling them to buyers making between 30 to 110 percent of the area’s adjusted median income.
But let’s go back to the 1930s, when generational wealth gains began to be stymied because of discriminatory lending practices by the government-sponsored Home Owners’ Loan Corporation (HOLC). In Richmond, a map (now online through the University of Richmond’s Digital Scholarship Lab) was drawn that put all of the predominantly African-American neighborhoods and just two white neighborhoods into red-shaded or “D” classified zones, meaning homeowners in those areas were the least likely to be approved for loans.
“The underlying racism of the HOLC grading system, and the resulting lack of private investment in predominantly African-American neighborhoods, set us up with valuation systems for properties that still haunt us today,” Heather Crislip of Richmond-based Housing Opportunities Made Equal said during a 2015 public square held by the Richmond Times-Dispatch. “Jackson Ward … was home to fabulous housing stock and gainfully employed residents. But it was graded D and ineligible for public underwriting for mortgages. Then came another federal move: Harry Truman’s Fair Deal, the Housing Act of 1949, which concentrated poverty in the inner city through the construction of public housing. By and large, public housing units were constructed in neighborhoods receiving a grade D by the HOLC.”
Richmond has six large public housing communities. Four — Creighton, Mosby, Whitcomb and Fairfield courts — are within 1 square mile of one another in the city’s East End. A mile and a half west, near Belvidere Street and Interstate 95, lies Gilpin Court. The sixth, Hillside Court, a South Side outlier intended for whites that is now a majority African-American community just as the others are, sits off Commerce Road. These communities are home to about 9,000 residents, a little more than half of whom are 17 and younger. Here, as it is elsewhere in the country, public housing is primarily home to very poor women and children.
This was not what the creators of public housing had in mind. Over time, the vision for slum eradication and workforce housing was gutted by changing federal, state and local policies influenced by Jim Crow sentiment and a powerful real estate lobby that wanted no government competition in the housing market. Income thresholds dropped. Maintenance budgets were gutted. Working-class whites, wooed by home loans, left for suburbia. Working-class blacks, penned in by restrictive sales covenants and redlining, had no such option.
Public housing in Richmond quickly became a tool to reinforce segregation.
“You cannot separate the history of public housing in Richmond from race,” says the Rev. Ben Campbell, who writes about that history in his book, “Richmond’s Unhealed History.” “It is the white establishment deciding what they want to do with predominantly black neighborhoods and using language that suggests they are trying to help improve them, while the actual fact is much darker than that.”
By the end of the 1950s, Campbell writes, the city had destroyed 4,700 housing units in black neighborhoods, including Navy Hill and Jackson Ward, both gutted by construction of the Richmond-Petersburg Turnpike. In their stead arose the public housing projects. Only Gilpin predates World War II. The rest came online from 1952-62.
In December 2018, the Partnership for Smarter Growth gathered government and nonprofit leaders from around the region to give reports on transportation, housing and preservation. Mentioned was the beginning of a new regional affordable housing study for which the top administrators from Richmond, Chesterfield, Henrico and Hanover have been at the table. That evening, Greta Harris of the Better Housing Coalition finished her presentation on affordable housing with an impassioned plea “Until we as a community can have really challenging conversations about race and our rich and complex history as a community and country, and somehow dig down deep to find our humanity to ensure that all of our neighbors have an opportunity to succeed and thrive, we won’t reach our fullest potential as a community yet, because you can’t have a quarter of our citizenry rooted in generational poverty.”
HOUSING TIMELINE
1933: The federal Home Owners’ Loan Corporation was established to help people refinance at a lower rate and lengthen terms on mortgages by providing public underwriting, but in doing so, maps were drawn that automatically graded Richmond’s African-American neighborhoods as “D,” or the highest risks. HOLC records showed that from 1933-36, 44 percent of its help went to neighborhoods designated “native white,” 42 percent to “native white and foreign,” and 1 percent to “Negro.”
1937: The Housing Act of 1937 established a federal public housing authority to make loans, grants and annual contributions to local public housing agencies to develop, acquire and manage housing projects.
1949: The Housing Act of 1949 included federal financing for slum clearance programs associated with urban renewal projects.
1968: The Fair Housing Act shields individuals from discrimination in the sale, rental, financing or advertising of housing.
1996: HOME filed a lawsuit against Nationwide Insurance, alleging redlining. The lower court delivered a $100 million jury verdict, which Nationwide appealed. The case was eventually settled for a lesser amount.
Sources: Dictionary of American History and homeofva.org
