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As a result of the Great Migration, from 1890-1910 the African-American population of Chicago increased from 15k to 40k.

By 1917, the Chicago Real Estate Board began setting up the Chicago Black Belt. The Chicago Real Estate Board is on record stating “Inasmuch as more territory must be provided (for Negroes), it is desired in the interest of all, that each block shall be filled solidly and that further expansion shall be confined to contiguous blocks with the present method of obtaining a single building in scattered blocks discontinued.”

In the 1920s the Chicago Black Belt was established. With the emergence of new families in Chicago, restrictive housing agreements emerged as well. The high court’s subsequent dismissal of Corrigan v. Buckley in 1926 upheld these private, restrictive agreements and paved the way for white Chicago residents to continue restricting who could buy or lease property.

In 1927 the political leaders of Chicago began to adopt racially restrictive covenants. The Chicago Real Estate Board promoted a racially restrictive covenant to women’s clubs, YMCAs, churches, PTS’s, chambers of commerce and property owners’ associations. At a certain point, eighty percent of the city of Chicago was included under restrictive covenants.

The Chicago Real Estate Board (CREB) campaigned heavily to ensure that racial covenants were the norm. Nathan William MacChesney, a member of the Chicago Plan Commission provided Chicago residents with model contracts for their covenants. Furthermore, in the fall of 1927, the CREB sent out speakers across the city to promote the racial restrictions.  

The covenants were marketed as an alternative to violence because between 1917 and 1921 the city of Chicago’s black population faced extremely gruesome and violent crimes including but not limited to homicides, bombings, and property destruction.

By the 1930s there was a federal reinforcement of racial covenants and the Black Belt. June 28, 1934, marks the beginning of redlining, the practice of denying services, either directly or through selectively raising prices, to residents of certain areas based on the racial or ethnic composition of those areas. Redlining came with the National Housing Act of 1934, which established the Federal Housing Administration (FHA).

Fun facts on the FHA during the 1930s:

  • They had a long-standing record of refusing to grant insurance for home-improvement mortgages to Black Americans. This contributed to the deterioration of homes in Black communities.
  • They maintained the right to determine the term of the note “entirely on the discretion of the financial institution.” Therefore, Black Americans had limited opportunity to leave or improve their neighborhoods. The Black citizens of Chicago were stuck in racially distinct and physically deteriorating neighborhoods.
  • The FHA Underwriting Manual of 1938 as well as the underwriting manuals of later years assisted in creating racial ghettos by instituting explicitly racist policies. These policies trickled down to affect local housing markets on the level of sellers, homeowners, real estate agents, and private lenders who had to adhere to the racist guidelines of the underwriting manual to qualify for FHA mortgage
  • The FHA had a system where they granted risk ratings to areas based on their racial composition. The areas that were deemed too risky were rated the worst and were not eligible for mortgage insurance. This made it difficult for anyone trying to live in a neighborhood with Black citizens. This rating system also made it difficult for private lending organizations to grant loans to anyone wanting to live in neighborhoods with Black citizens. This really worked to thwart integration along with sustaining the Black Belt of Chicago.
  • The risk assessment program was very involved. To map out which neighborhoods were risky agency approved inspectors were sent out to neighborhoods to check for “inharmonious racial or social groups present in the neighborhood” and “danger of infiltration of such groups.”
  • This practice was grandfathered in and was a policy of the Home Owner’s Loan Corporation, the predecessor to the FHA.

To become homeowners, families of color were left to accept predatory contracts from sellers taking advantage of the discriminatory legislation. Prospective black buyers instead bought houses “on contract”, at double or triple their value because they were racially ineligible to apply for traditional mortgages.

Property “on contract” came with different rules when compared to traditional mortgages. The installment payments were abnormally high, there was a high interest on the payments, and the payments did not result in an accumulation of equity. If a family or individual defaulted on one payment at any time they would lose the property and everything that was invested up until that point.

You then had a situation where individuals were working multiple jobs to be able to afford their contracted payments.

The 1940s marked the end of WWII, and in 1948 the Supreme Court declared restrictive covenants enforceable in Shelley v. Kraemer. By 1949 the housing conditions of Chicago were brought to national attention. The FHA received pressure to address the overcrowded and deteriorating housing in Chicago’s Black Belt. They did publicly speak out about it but documents in the 1949 Underwriting Manual show that the FHA forwarded discriminatory practices as late as 1949: “ The Manual still required lenders in mapping a city to outline neighborhoods ‘in such a manner that they will exhibit whenever possible a fairly high degree of homogeneity as to housing and population statistics’.”

The 1949 Underwriting Manual shows that even if the explicitly racist language was omitted from codes regulating risk assessment, race still played a significant role in determining whether the FHA would insure a mortgage. The continuation of these discriminatory practices only further solidified the boundaries of the Chicago Black Belt.

During this time in the 1940s, the Chicago Housing Authority began demolishing slums in the Black Belt and replacing them with high-rise public housing. The original plan was to place high rises in less congested parts of the city, however, white residents objected. The housing authority built almost all of the projects in the already existing Black Belt. According to Chicago public housing scholar Devereux Bowly Jr., this was the “unofficial attempt by the city government to constrain the black population of the city at that time in the smallest geographic area.”

The 1950s brought the Kean-Murphy deal that was made in 1955 between General William Kean, then the CHA executive director, and Alderman Thomas Murphy, chairman of the City Council’s Housing and Planning Committee. The secret agreement provided for an aldermanic veto system under which the CHA would not submit a proposed site to the City Council until it had informally been approved by the alderman in whose ward the site was located. This was learned during a deposition of C.E. Humphrey, CHA executive director, in the Gautreaux case. The CHA did not construct public housing in white communities, and the Humphrey deposition was the first public admission of the specific mechanism used by the CHA in the site-selection process.

During the 1950’s white flight is also occurring while the second great migration continues. As white Chicago citizens are moving into the suburbs so are large employers. Unemployment and poverty grew in the Black Belt.


“Real Estate Exploitation Produces Ghettos” Inbetween Peoples, accessed June 19, 2017,
Bowly, D. (2012). The Poorhouse: Subsidized Housing in Chicago. 2nd ed. Carbondale: Southern Illinois University Press.
Anderson, A. and Pickering, G. (2008). Confronting the Color Line: The Broken Promise of the Civil Rights Movement in Chicago.–QIzM (map) 2010 (map) 1934

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