She applied the “Page 99 Test” to her new book, Family Properties: Race, Real Estate, and the Exploitation of Black Urban America, and reported the following:Page 99 is a map of Chicago circa 1960, with areas containing black populations of 40% to 100% highlighted. The map also shows that there was an immense increase in the number of such areas since 1940. My book explains the forces behind this growing pattern of racial segregation – and who benefited financially from it.Read an excerpt from Family Properties, and learn more about the book at the publisher's website.
Many people know about “redlining,” or banks’ widespread refusal to make mortgage loans to African-Americans, especially those moving to white neighborhoods. Many also know about “blockbusting” (real estate speculators would buy “low” from whites and sell “high” to blacks). What no one explains is how low-income blacks who couldn’t get mortgages could buy “high” from white speculators.
I learned the answer to this mystery when I read the papers of my father, Mark J. Satter, a Jewish attorney who, until his death in 1965, represented scores of black clients who’d been grossly overcharged for their properties. Most had bought homes “on contract,” or on the installment plan. My father learned from his clients that speculators were buying properties from whites at close to market value, and then selling them to blacks “on contract” at double to quadruple market value. Just as shocking were the terms of these sales. Contract buyers made down payments and were responsible for taxes, insurance, and maintenance. But if a contract buyer missed even one payment, the seller was free to evict the buyer – and keep everything the buyer had invested to that point.
The profits to the speculators were stunning. For example, one of my father’s clients bought a building for $9,950, from a speculator who had recently purchased it for $3500. His client had paid off $8,500 of that debt – plus another $2300 in improvements – when he was evicted. Approximately 85% of properties sold to black Chicagoans were sold “on contract” – and there were close to a million blacks in Chicago by the early 1960s. In 1958, my father charged that speculators were draining Chicago’s black community of $1 million dollars a day, and the evidence I’ve turned up supports his estimate.
The meaning of the map on p. 99 is best summed up by a self-described “middle-class Negro homeowner” who I quote the page before. “Face it!” he wrote in 1959. “Racial prejudice is profitable in Chicago. Every time a new parcel of land is added to the Bronze Ghetto, millions of dollars in real estate profits are made!”
--Marshal Zeringue
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