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Housing Act Of 1934 Essay

632 Words3 Pages

In 1934 the United States of America is still recovering from the disastrous great depression. The previous year in 1933, millions of americans defaulted on their mortgages and the numbers would have kept increasing. President Franklin D. Roosevelt signed the National Housing Act of 1934 hoping to improve the living standards and conditions of americans. The law also created the Federal Housing Administration which provided mortgage insurance on loans made by banks and private sectors. The National Housing Act at first was a success due to the millions of jobs that were created, and americans could now being buying homes. However the FHA would deny loans to African Americans, Latinos and minority groups. During the early 1930’s the federal government sent surveyors to “grade …show more content…

Loans in the redlined neighborhoods were either unavailable or unbelievably expensive making it almost impossible for people of color to buy homes and accumulate wealth. Racist methods practiced by banks and private sectors believed if African Americans acquired homes in or near suburban areas the property value will decrease and their loans would be at risk. When minorities attempted to buy homes or property in predominantly all white neighborhoods prices rose would raise outrageously, restricted to a certain area, or they were denied. Richard Rothstein the author of the publication color of law says Underwriting Manual of the Federal Housing Administration, which said that "incompatible racial groups should not be permitted to live in the same communities." Meaning that loans to African-Americans could not be insured.(2) The underwriting manual also describes how the highway system would be good way to separate minorities from predominantly white neighborhoods. Communities such as Levittown, New York refused to sell homes to African Americans.

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