There is a distinct wealth gap between white families and minority families, especially Black families in the United States. One of the root causes can be traced back to the Federal Housing Administration and the Federal Housing policy that was created in the 1930s. The system was designed to look at different cities and neighborhoods and then assign each section a color that ranked the value of the area’s real estate/property. Green was the highest color, then blue, yellow, and red, which was the lowest color. And in a predominately white-male led government, it wasn’t much surprise that this system enforced discrimination and segregation.
On maps, all-white neighborhoods were colored green, which allowed them to receive more benefits, like more mortgage approvals or money for new housing. While on the other hand, all-minority neighborhoods were colored red, “redlined”, and had less funding for housing, thus becoming more economically disadvantaged. Even neighborhoods with White and Black families were given lower scores (colors) and seen as areas with “financial risk.” Integration was discouraged by the government and many white families moved out of their mixed neighborhoods to join all-white ones, also known as white flight, because they were aware of the economic advantage the move would give them. White people self-segregated themselves from communities of color because of a system that the government had designed to limit the ability of Black and Latinx families from gaining economic stability, and opportunities.
This was an important cause in the increasing wealth gap as homeownership was a significant indication of wealth and brought upon economic benefits. Since minority families were targeted by the system, they weren’t able to own homes at the rate of white families and struggled economically on top of their social obstacles. The narrative that white families are wealthier and more successful than Black families is a direct result of the housing system. Such stereotypes arose and only helped white families rise in social class and gain from the system.
Moreover, the housing system was still in use after WWII and the war had brought more awareness of discrimination into the world. The U.S. had promoted the war with the notion that America was responsible to help people under oppressive governments, like Nazi Germany, and to bring freedom and democracy to such places. However, during and after the war, racist policies continued to be enforced. In the south, Jim Crow Laws weren’t outlawed and across the country, school segregation was still legal. This is the hypocrisy of the United States, in which the government declared to put an end to discrimination for those suffering from Nazi Germany rule, but had yet to do the same for their own citizens, especially Black folks.
In America, during the presidency of Franklin D. Roosevelt, his “New Deal” that primarily focused on economic recovery and then economic security, was used to rebuild America’s economy and influence in the world. It failed, however, to help construct financial certainty for non-white citizens. And it didn’t protect Black or minority groups from various government institutions’s prejudice and bias.
Despite American ideals of freedom and equality overseas, America itself struggled to give full rights to all of its citizens and implemented policies and laws that further hurt its BIPOC citizens. It wasn’t until 1968 that the use of race as a factor was banned by the Fair Housing Act, one of the last major civil rights laws to be passed by Congress.
But in spite of the act passing, there are still lasting effects that communities of color feel to this day. Many of the White suburbs had accumulated greater wealth compared to neighborhoods that were once redlined. White families gained wealth not only in housing but in opportunities, as their suburbs received substantially more opportunities for better jobs and schools. As mentioned above, the wealth gap still has not closed between White families and Black/Latinx families. Resulting in, continual financial and social drawbacks for the latter. Although circumstances have gotten better, the government must do more, not just in regards to fair housing, but to improve the country so that it does not solely benefit rich, white families.
Brooks, Khristopher J. “Redlining's Legacy: Maps Are Gone, but the Problem Hasn't Disappeared.” CBS News, CBS Interactive, 12 June 2020, www.cbsnews.com/news/redlining-what-is-history-mike-bloomberg-comments/.
Jan, Tracy. “Analysis | Redlining Was Banned 50 Years Ago. It's Still Hurting Minorities Today.” The Washington Post, WP Company, 28 Mar. 2018, www.washingtonpost.com/news/wonk/wp/2018/03/28/redlining-was-banned-50-years-ago-its-still-hurting-minorities-today/.