In 1958, my father charged that speculators were draining Chicago’s black community of $1 million dollars a day, and the evidence I’ve turned up supports his estimate. Approximately 85% of properties sold to black Chicagoans were sold “on contract” – and there were close to a million blacks in Chicago by the early 1960s. His client had paid off $8,500 of that debt – plus another $2300 in improvements – when he was evicted. For example, one of my father’s clients bought a building for $9,950, from a speculator who had recently purchased it for $3500. The profits to the speculators were stunning. But if a contract buyer missed even one payment, the seller was free to evict the buyer – and keep everything the buyer had invested to that point. Contract buyers made down payments and were responsible for taxes, insurance, and maintenance. Just as shocking were the terms of these sales. My father learned from his clients that speculators were buying properties from whites at close to market value, and then selling them to blacks “on contract” at double to quadruple market value. Most had bought homes “on contract,” or on the installment plan. Satter, a Jewish attorney who, until his death in 1965, represented scores of black clients who’d been grossly overcharged for their properties.
I learned the answer to this mystery when I read the papers of my father, Mark J. What no one explains is how low-income blacks who couldn’t get mortgages could buy “high” from white speculators. Many also know about “blockbusting” (real estate speculators would buy “low” from whites and sell “high” to blacks).
Many people know about “redlining,” or banks’ widespread refusal to make mortgage loans to African-Americans, especially those moving to white neighborhoods. My book explains the forces behind this growing pattern of racial segregation – and who benefited financially from it. The map also shows that there was an immense increase in the number of such areas since 1940. She applied the “ Test” to her new book, Family Properties: Race, Real Estate, and the Exploitation of Black Urban America, and reported the following: is a map of Chicago circa 1960, with areas containing black populations of 40% to 100% highlighted. Beryl Satter is the author of Each Mind a Kingdom and the chair of the Department of History at Rutgers University in Newark.
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