Summer is house-buying (and, yes road construction) season. The process is pretty straightforward. You make a down payment, get a mortgage from the bank, make your payments on time, repairs as needed and improvements as desired. When you sell the house, you pay off any remaining mortgage, pocket the proceeds, and enjoy the return on your investment. The most common, straightforward, safest way to create pride in ownership and intergenerational wealth.
Morning, Feb. 23, 2002: I’m running the Camp Lejeune marathon on the Marine Corps training base in North Carolina, artillery booming in the background. I strike up a conversation with the young Marine running alongside me. “Why did you join the Marines?” I asked. I’m expecting something like “protect democracy.” What I got was, “I’ve got a wife and kid and I want to be a radio technician. They’re going to teach me that here.” Aahh. Job training. You can learn a lot in the service.
Bill Levitt certainly did. His job was building housing, quickly and cheaply, for tens of thousands of soldiers after World War II. Coming home from the war, he realized his father had land, his brother was an architect, and he had a dream. Let’s mass produce affordable housing in a picture-perfect, planned community for returning servicemen. Using the skills and methods he learned in the Army, he built quality housing in the same assembly-line style Henry Ford used to mass produce affordable, quality cars. Amazingly, in just four years, from 1947 to 1951, Bill Levitt built 17,000 small homes on winding streets, with deep green lawns, white picket fences, parks, a community center, playgrounds and a pool. Levittown, America’s first suburb, was born. Truly, a beautiful, thoughtful, richly deserved “thank you” to those who put their lives on the line for freedom.
Originally rental units, they were later offered for sale with no down payment and monthly costs the same as the original rent. There was just one small hitch in this perfect picture. Every sale included a legally binding restrictive covenant stated in capital letters and bold type: “THE TENANT AGREES NOT TO PERMIT THE PREMISES TO BE USED OR OCCUPIED BY ANY PERSON OF GERMAN-AMERICAN HERITAGE.” The Germans had just killed 2,500 Americans on D-Day alone and another 73,000 Allied forces in the ensuing battle of Normandy. Pride in ownership? Denied. Intergenerational wealth? Denied.
When you want to buy a house, you bring in your paperwork and sit across the desk from your local banker. Looking at you, he or she weighs your projected ability to repay the loan, the condition of the house you want to buy, and the long-term prospects for the neighborhood in which the house is located. Beginning in the 1930s, still climbing out of the Depression, and needing to protect their investments, banks determined which neighborhoods they deemed least creditworthy, outlined and hash-marked them in red pencil on a map, and generally refused to issue mortgages in those neighborhoods. This perfectly legal process was called “redlining.” If the banker believed home values in these neighborhoods would fall, not rise, it would put both the bank’s money and the trust of its investors in jeopardy. The neighborhoods they redlined were mostly Italian. Al Capone was at the height of his power, the bloody St. Valentine’s Day massacre made national headlines, and the “outfit” controlled bootleg whisky, gambling, and prostitution. These were not the qualities of a desirable, “we want to live there” neighborhood. So, no mortgages in Italian neighborhoods. Pride in ownership? Denied. Intergenerational wealth? Denied.
Now imagine there are people of considerable wealth who realize the obvious, that some people are just not given an equal chance to get a mortgage and buy a home. Seizing on this opportunity, they come up with a plan to help. They will use their money to buy the house and sell it to you “on contract.” With no other choice, you jump at the chance to buy the house from this private source, even if it’s in “as is” condition. You are required to make all repairs, pay all the taxes and insurance, and, yes, make the monthly contract payments. But there was just one little hitch. No matter how many years you lived in the house, no matter how much you had paid in monthly contract payments, or how much you had spent on repairs, if you missed even a single payment, you could be legally evicted and have not a single penny coming to you. You had absolutely no equity until the last and final payment was made. In the 1950s and 1960s in Chicago, Irish-Americans purchased 60,000 homes, with fully 45,000 of them purchased “on contract,” paying $10,000 more per house than others. Just an updated version of the legal discrimination rampant in help wanted signs from the early 1900s that said, “No Irish need apply.” Enforced evictions led to a cumulative loss of 3.2 billion in today’s dollars. Pride in ownership? Denied. Intergenerational wealth? Denied
In reality, none of the above applied to German-Americans, Italian-Americans, or Irish-Americans. In every case, it was African-Americans. The actual wording of the Levittown restrictive covenant was: ‘THE TENANT AGREES NOT TO PERMIT THE PREMISES TO BE USED OR OCCUPIED BY ANY OTHER PERSONS THAN MEMBERS OF THE CAUCASIAN RACE.”
In 2019, the city of Evanston became first in the nation to address this inequity, acknowledging the harm the city itself caused to African-American residents due to its own discriminatory housing policies and practices from 1919-1969. Now, for eligible black residents, the city provides $25,000 each toward home improvements, a down payment, or mortgage assistance. This process, known as reparations, is defined as making amends or giving satisfaction for a wrong or injury you caused. None of us, neither you nor I, had any role in Levittown, redlining, or contract sales. So you might conclude the idea of reparations does not apply. But that does not mean there’s nothing we can do, as individuals, to help. Recently, a friend of mine, a white grandfather of an African-American child, sent me the following last paragraph of his will. “Paying it forward” on an issue that resonated with him. It reads:
“After all expenses are covered, the remaining balance shall be divided into three equal parts. We leave one equal share to each of our two children and the third equal share shall be given to the Historic Black College or University of their choice to support the education of an African-American student, preferably one whose parents do not own a home.”
I would like to believe there was at least one returning soldier who, upon reading the restriction in the Levittown agreement, refused to sign it if the same opportunity was denied to a group of fellow soldiers who fought and risked their lives with the same fear and courage as he did.
I would like to believe that there was at least one banker who told a deserving black couple, “I will give you that mortgage.”
I would like to believe that there was at least one wealthy individual who said, “Don’t worry, I’ll just add the missed payments on the back end.”
Chicago Tribune: May 24, 2024 (Alex Hulvalchick & Jonathan Bullington) A group of white current and former Evanston resident filed suit against the city’s reparations program alleging racial discrimination.
New York Times: June 1, 2024. (Debra Kamin) Dr. Raven Baxter, a 34-year-old molecular biologist finds the house of her dreams overlooking the Atlantic Ocean and immediately offers to buy it at the listing price of $749,000. The offer is accepted by the 84-year-old seller, and the down payment is made. A few days later, Dr. Baxter’s real estate agent calls her with some bad news. “I don’t know how to tell you this, but she doesn’t want to sell the home to you, and it’s because you’re Black.” Long story short: she sued, won, and now lives in that home of her dreams. Her African-American boyfriend? A theoretical astrophysicist who works for NASA.
I would … still … like to believe
I would like to thank ET for providing the title to this essay, when he pointed skyward and longingly uttered that one unforgettable word: “HOME!” Finding himself so far from his home, he understood the importance of that word. No matter where we find ourselves or how many people love us, wherever we call home is the enduring scrapbook of our lives and a source of stories shared across generations. And if given the opportunity to actually buy a home, it becomes the bedrock of our financial security.
Housing inequity is only one of so very many worthy humanitarian causes. And, like my friend, we’re all afforded the opportunity to deal with those who most resonate with us in whatever manner works for each of us as we “pay it” backwards … sideways … or forward.
Bill Sieck is a resident of Berwyn.