The New Deal programs launched between 1932 and the end of World War II transformed society. But when it came to supporting home ownership, Black Americans reaped far fewer benefits than white Americans. Federal Housing Administration rules from that era recommended that the way to preserve the value of newly constructed subdivisions was to keep Black homebuyers from living there, a policy that continues to slow Black families’ ability to build wealth.
"The New Deal expanded government capacities in a way that provided economic rights for people – the right to capital, the right to a job, the right to health care, the right to old-age pension," Darrick Hamilton, a professor of economics at the New School, told Retro Report. "What was problematic is, that right was not inclusive."
Federal Housing Administration guidelines recommended race restrictions for new suburban developments. When Sonoo Thadaney-Israni bought a house in the Ladera neighborhood of California’s Silicon Valley, she discovered that her property deed contained racist restrictions from decades ago.
"The language that I read basically said the only people allowed to live in this community, in these homes, are white, unless you're a servant," she told us.
The rules are no longer enforceable or legal, but they’ve been on the books since the neighborhood was established 70 years ago. By the 1950s, federal policy and private discrimination left few options for Black Americans.
The effects continue to resonate today. Home ownership is one of the most significant factors creating a wealth gap between white and Black Americans today, economists say, a disparity that was magnified by New Deal housing programs.
This video is released in partnership with TIME magazine.
Subscribe to our newsletters.