RECIPE FOR DISCRIMINATION
RECIPE FOR DISCRIMINATION
By Estella Inda
Issues with housing are not new to many of us, especially those of us that live in the Bay Area. We hear about it every day in the news, if we haven’t experienced it ourselves. What many of us don’t hear about is the history of housing discrimination and the history of rating systems created in the 1930s.
Launched in 1934, the federal government introduced a new rating system to help determine what would be a “safe investment” for housing lenders. The color-coded rating system broke down the neighborhoods into four categories: A for green meaning “Best”, B for blue meaning “Still Desirable”, C for yellow meaning “Definitely Declining”, and D for red meaning “Hazardous”. This grading system was supposedly designed to encourage home ownership. However, in practice, the lending companies used it as a tool to deny loan applications from people of color and those from areas deemed “hazardous”.
““What many of us don’t hear about is the history of housing discrimination and the history of rating systems created in the 1930s.””
This issue became known as “Redlining”, a government- funded way of segregating the neighborhoods. Worse yet, because of this rating system, government officials decided a neighborhood deemed “hazardous” was not worth investing in for civic improvements that would have made the neighborhood more desirable to lenders and developers. Much of the Eastside of San José remained underdeveloped for exactly that reason.
This form of segregation practice on top of the use of racial covenants, where property owners would not allow those of color to rent or purchase homes in particular neighborhoods, caused significant housing issues. It became common practice for property owners to have it written into their rental agreements and deeds that they could not rent or sell the property to anyone that was non-white. This forced the growth of non-white neighborhoods, such as the Eastside. Yet, despite the growth of the population of such neighborhoods, both the city and county ignored the need for improvements. The idea of providing accessibility to basic civic improvements such as paved roads, street lights, and much more was not perceived as important in contrast to the higher-graded neighborhoods.
““It became common practice for property owners to have it written into their rental agreements and deeds that they could not rent or sell the property to anyone that was non-white.””