By the way, this isn't a story about a conspiracy. It is a story about inherent, systemic racism and business as usual. Be advised, however, that just because we've been taught to bark at the conspiracy theorists when the bell rings, conspiracies are alive and well in America.--Pete
[FDR's Home Owners Loan Corporation, the HOLC,] figured out how real-estate markets worked and systemized an appraisal methodology that would help banks, lenders, and home owners guarantee the investment value of their properties. People were not about to take out mortgages to buy homes in neighborhoods that might go down in value. Banks were not inclined to lend the money, either. The long-term financial commitment of a thirty-year mortgage meant ensuring that the main characteristics of a neighborhood remained stable over time.
Instead of measuring this stability in terms of civic participation, church membership, community reinvestment, or local volunteerism, the HOLC evaluated neighborhoods through more familiar statistics: age, jobs, income, housing materials, and, most of all, race. The new, mathematically justified system for classifying neighborhoods became known as "red lining." The scheme used colors, letters, and numbers to code the desirability and investment value of different neighborhoods. Green was the best - a homogeneous, perpetually high-demand area, occupied by white businessmen and professionals, with no Jewish infiltration. Blue was next, for desirable areas that had already reached their peak. Yellow was for neighborhoods in decline, and red was for those already fallen. "Full decline" meant that black people already lived there. . .
Appraisers learned to see any mixing of races as a sign of instability and impending price drops. This logic trickled down to home owners who were tied to big mortgages and had more of a stake in the value of their property than the quality of their lives or, least of all, the eradication of their prejudices. Besides, recognizing the precursors to a neighborhood's infiltration by blacks or Jews meant getting out in time to win a good price for one's home and pay back the mortgage. Getting out too late could mean owing more on a house than it was currently worth. Thanks to the way the federal government promoted home ownership, suburbanites learned to become more racist as a means of financial survival.