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[Music] hi i'm kendall and i'm lauren we work at the polk county housing trust fund in des moines iowa our mission is to provide strategic leadership expertise and resources to strengthen communities by expanding affordable housing choices in polk county we do this by providing funding for new affordable housing units and the services that keep families housed researching the need for such units across polk county and the state and advocating for housing policies that increase housing choice for everyone in our community over the past year we have been discussing the history of racial discrimination in housing in the city of des moines through the exhibit undesigned the red line over the course of five videos we will explore the history of redlining the impact it had on the city of des moines and take a look at historical events spanning the course of 150 years both nationally and locally that shed light on the development of the modern american city by the end of this journey you will better understand the shaping of our current housing infrastructure and have the tools you need to better advocate for housing justice and equity in your community before we get started we wanted to tell you a little about how this exhibit came to be undesigned the redline was created by designing the wii a social impact firm out of new york city for the past five years designing the wii has worked with communities of varying sizes across the country to educate about the history of redlining and racial discrimination in housing over the past eight months we've been working together to educate our community about the impact of these policies in des moines before we get to that let's learn about what redlining is the system of redlining came to fruition at the beginning of the 1930s the united states had been devastated by the great depression and the housing affordability crisis was out of control home ownership was generally only available to upper middle class families and the mortgage lending system was exclusive requiring 50 down payments interest only payments and repayment in full after five to seven years during the great depression many homeowners with mortgages had a hard time paying their payments and became subject to foreclosure as franklin delano roosevelt took office in 1933 he along with congress made it a priority to develop the new deal which established social safety net and wealth building programs one of the programs created was the home owners loan act which organized the homeowners loan corporation this program helped with the refinancing of loans purchasing of mortgages that were about to foreclose and mortgages that were amortized [Music] by 1934 the roosevelt administration moved forward in housing policy by signing the national housing act into law creating the federal housing administration the fha revived the mortgage lending system by developing the 30-year mortgage with lower interest rates and by ensuring bank mortgages that covered more than 80 percent of the purchase price this meant more people could gain access to homeownership in the united states however we have to remember that at this point in time in all levels of government jim crow era segregation was still very much in effect congress wanted to bake in to all the new deal era programs systemic ways to cut out people of color from benefiting this was no different in housing with the refinancing of loans across the united states the homeowner's loan corporation and the fha needed to find a way to figure out how to assess the risk of its borrowers this is when the system we now call redlining was designed these organizations wanted to know more about the condition of properties in neighborhoods to make sure that they would maintain value over time in order to do this they hired real estate agents to make appraisals on properties to help the federal government decide on the refinancing of loans while the property conditions and values were important in assessing risk this is not the only measurement the federal government examined accompanying documents made it clear that the racial and ethnic composition of neighborhoods were also considered to be a risk factor the data collected by the local real estate agents were used to create color-coded maps of 239 metropolitan areas across the united states to show the lowest to highest risk areas in each city these maps are what we now call redlining maps the areas that were deemed to be the lowest risk were colored in green and the highest risk areas were colored in red aka redlined areas in the color of law richard rostein explains how this lending system played out across the united states he notes that a neighborhood earned a red color if african americans lived in it even if it was a solid middle class neighborhood of single-family homes these red line neighborhoods were completely cut off from receiving fha loans at this point almost 100 of banks and lenders across the united states were in debt meaning all the loans they distributed required federal subsidy the lack of federal investment had a negative impact on private home loans business loans and property insurance in red line neighborhoods of course this had a lasting effect on the economic mobility of the families who resided there you will learn how to read these maps in the next video but we want to make sure that it is clear race was a primary factor in determining where federally backed home loads would be distributed and where they would not in 1935 the fha produced a document titled the underwriting manual in which it adopted neighborhood evaluation criteria which bluntly stated that incompatible racial groups should not be permitted to live in the same communities as white residents as well as recommending that highways be a good way to separate african americans from white neighborhoods this document also stated that natural or artificially established barriers would prove effective in protecting a neighborhood and the locations within it from adverse influences including prevention of the infiltration of lower class occupancy and inharmonious racial groups the fha did not attempt to hide the racial undertones of this document and made it explicitly clear that race mattered in their decision to provide financial assistance and more generally where they wanted different people to live while these practices were cemented into federal policy in the 1930s they began long before in private industry starting in the late 1910s realtors and property developers made it clear in their practice that segregation was key in maintaining property values as well as making sure certain groups were not close to white neighborhoods the national association of real estate boards published a textbook which made this sediment very clear one section stated that the colored people certainly have a right to life liberty and the pursuit of happiness but they must recognize the economic disturbance which their presence in a white neighborhood causes and forego their desire to split off from the established district where the rest of their race lives this rhetoric was used in real estate practice all the way up until 1968 when the fair housing laws were passed so what do the disparities in wealth home ownership rates and property values between black and white families look like today recent studies have found that the typical homeowner in a neighborhood that was redlined has gained 52 percent less in personal wealth generated by property value increases compared to a green neighborhood over the last 40 years black homeowners are nearly five times more likely to own a home in a formerly red-lined area which results in diminished home equity and overall economic inequality for black families looking at the racial wealth gap the average white family has approximately and seventy one thousand dollars of net worth which is nearly ten times greater than that of a black family it doesn't even matter if you have the same income but households with less debt fewer expenses and more accumulated wealth from past income or inheritance will have more wealth and home ownership is the best known way to build wealth in the united states of america and excluding a portion of the population from that opportunity the economic outlook for black and brown families in this country was forever tarnished [Music] you