[Marxism] New Deal socialism?
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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