[Marxism] New Deal socialism?

Louis Proyect lnp3 at panix.com
Wed Oct 30 10:53:07 MDT 2019


 From Samuel Stein's "Capital City":

Even before bulldozers cleared the way for cranes, bankers and planners 
had set out on a stealthier form of urban neighborhood clearance, which 
established the preconditions for gentrification. In 1934 New Deal 
legislation established the Federal Housing Administration (FHA) to 
standardize, regulate and insure home mortgages. Not everyone, however, 
could access these loans. Along with the FHA, the federal government 
empowered bankers and developers to lead the Home Owners' Loan 
Corporation (HOLC). HOLC was tasked with quantifying the risk bankers 
would take in giving loans to particular people in particular places. 
This would allow the federal government and the banks to agree on rates 
for FHA loan insurance. To make these decisions, HOLC sent surveyors out 
to every residential block in just about every city in the country; 
those surveyors would look at a neighborhood and grade it on a scale 
from A (very safe) to D (very unsafe).

There were three main criteria HOLC used to determine risk: 1) the age 
of the building stock; 2) the density of housing; and, by far most 
determinately, 3) the racial composition of residents. Jews were 
considered communistic and likely to go on rent strike. Italians were 
characterized as dangerous gangsters. African Americans were written off 
entirely, and virtually any block with any Black people was given a low 
grade. Following real estate industry "best practices," the FHA made 
segregation and suburbanization the United States' de facto housing 
policy. Over time, as property owners in Black, immigrant and racially 
mixed neighborhoods were shut out of the finance system, many of their 
buildings declined, rents fell and some landlords resorted to abandonment.




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