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The Shame of the Suburbs

How America gave up on housing equality

Kenneth T. Jackson began Crabgrass Frontier, his 1985 history of American suburbanization, with three assertions: that “the treatment and arrangement of shelter” reveals more about a country’s people than any of the creative arts; that “housing is an outward expression of the inner human nature”; and that “no society can be fully understood apart from the residences of its members.”

Those may have seemed like pleasing observations to readers basking in the “morning in America” optimism of the Reagan era, especially those ensconced in a prosperous suburb. Such readers may not have spotted the potential for searing social critique in the idea that our housing reveals who we are as a society. Hadn’t America steadily increased its rate of home ownership in the post-World War II boom years? Weren’t those ever-expanding suburbs proof the nation was succeeding in building a solid middle class with spacious homes and yards and patios, affordable mortgages, and safe, orderly neighborhood schools?

But today, nearly forty years after Jackson’s book was published, it’s hard to consider our shelter, our housing, our residences, without seeing—if you imagine gazing out across the country’s vast and varied landscape—a shameful societal failure. The United States is built out with sprawling suburbs, it’s true, containing everything from multimillion-dollar mansions to ticky-tacky starter homes. Older towns almost always have a central district with stately Victorians and Georgian colonials, and modest working-class subdivisions at the outskirts where fields used to be. In its full scope and scale, though, the American housing market is a study in the unjustness and disparities that permeate American society. In the big cities, you see penthouse-topped skyscrapers mere miles away from broken-down neighborhoods full of renters who are at risk of eviction if they can’t keep paying half their income to the landlord. You see encampments full of the unhoused who can’t, or choose not to, find space in an over-crowded shelter. These tent cities keep growing, as developers concentrate on market-rate and luxury housing, giving us more upscale townhouses and gated communities instead of low-margin housing for the poor.

Ours is a society that provides multiple homes for the fortunate few—perhaps one in the city, one in the country, and maybe an additional summer home in an exclusive enclave near the seaside. In the middle and working classes, people feel fortunate if they get a mortgage and a decent house. If their timing is unlucky and they buy just before a recession that throws them out of work, they can end up with an unsellable house valued at less than what they paid for it. Then the foreclosure sign goes up in their front yard. When a house is no longer an option, they endure the hell of competing to find an apartment—which might rent for as much as or more than the monthly payment on the mortgage they can’t get. If they qualify for subsidized public housing, they might end up on a list that can keep them waiting as long as eight years.

But maybe those priced out of the traditional housing market can scrape together enough to own something. There are about twenty-two million people—more than 6 percent of the U.S. population—living in “manufactured homes,” most often a mobile home that gets hauled to a trailer park, where it is plumbed and skirted, unlikely to be moved again unless by the force of a tornado. And all along the southern border there are settlements called colonias that were carved up in unincorporated areas by quick-buck developers and landowners who didn’t see the need for paved roads or running water or sewers. An estimated eight hundred forty thousand people live in colonias stretching from Texas to California, and about 85 percent of them are U.S. citizens, according to a report by a Texas housing agency. Some residents start out by assembling a crude structure out of salvaged materials and gradually work toward building a stable house, with the hope that infrastructure will arrive and a hurricane or flood won’t. The American Dream.

A Very, Very, Very Fine House

To the complacent and self-satisfied, this is just the natural order of things. It’s how it’s always been. How could it be otherwise? Real estate is an investment, and one with better odds than the stock market or the lottery—still, there will always be winners and losers.

In its full scope and scale, the American housing market is a study in the unjustness and disparities that permeate American society.

The growth of the suburbs, too, is often seen as natural. In the American catechism, it’s a result of the desire to escape the teeming city, to own your own property, to express your individual style in the design of your house and the upkeep of your yard. The wealthy classes were drawn throughout the 1800s to bucolic settings outside the city, in places like New York’s Westchester, and to “streetcar suburbs” like Brookline, near Boston. The ideal was, as the historian and urban planner Lewis Mumford acidly described it, “to be your own unique self; to build your unique house . . . in short, to withdraw like a monk and live like a prince—this was the purpose of the original creators of the suburb.”

The first half of Crabgrass Frontier tells this story. Jackson expands on the idea that “housing is an outward expression of the inner human nature.” He traces the effects of writers and moralists in the mid-1800s who created a “cult of domesticity” as they touted the virtuous benefits of family life in a detached home, with more privacy and isolation than city life allowed. As one preacher told an audience of young women in 1853, “The foundation of our free institutions is our love, as a people, for our homes.”

But more than culture, it was new technologies and municipal initiatives that made suburbanization happen. After the Civil War, the streetcar trolley and commuter rail lines extended the distances workers could reside away from city centers. As cities took control of street development, the city’s residents were subsidizing those who moved to the edges. Municipal governments would then annex the growing areas—as New York did with Brooklyn and the other boroughs. After that came the automobile, and the expansion of highways. By 1950, General Motors had helped eliminate a hundred streetcar operations around the country, replacing them with GM buses. (A federal grand jury found GM had participated in a criminal conspiracy. The fine was $5,000.) Everywhere, there were more and more cars—and roads that were called freeways. “The city is doomed,” Henry Ford had said. “We shall solve the city problem by leaving the city.”

The fact that the United States had become the world’s first predominantly suburban nation would hardly have been shocking to readers of the 1980s—by which time more people lived in suburbs than in cities or on farms. Still, Jackson’s book was important for providing a meticulous history of how it happened. Academic reviewers praised Crabgrass Frontier as “the work of a great mind and a great scholar” and “the definitive work” on the suburb’s long evolution. It was hailed as “essential reading for urban geographers.” But it is of lasting importance for another reason. As Ta-Nehisi Coates wrote in 2014, “about halfway through the book, the bombshells start dropping.” Jackson works his way to the moment the federal government became a driving influence on where people settled—on who would be able to buy that new house with a yard and a garage, and who would be trapped in an urban ghetto. It wasn’t just that people went to the suburbs to find a better life, it was that white people did, enabled by an array of helpful government policies. African Americans and other minorities were not uninterested in obtaining homes and mortgages; the government actively blocked them from doing so.

New Deal or No Deal

Before the Great Depression, the federal government had little to do with the housing market. Building and loan associations had sprouted up in the 1830s, but through most of that century, well-off families purchased homes without taking on debt. Even in the building boom and suburban expansion of the 1920s, mortgages required a significant down payment and were usually set to be repaid in five to ten years—there were monthly interest payments, but the full amount of the loan had to be paid in a lump sum when it came due, unless the borrower was able to renew the mortgage in hopes of paying it all off later.

It wasn’t just that people went to the suburbs to find a better life, it was that white people did, enabled by an array of helpful government policies.

When the Depression hit, Herbert Hoover’s administration realized federal action would be necessary to save the housing sector. But it was left to Franklin Delano Roosevelt’s New Dealers to take effective action. “In the spring of 1933,” Jackson writes, “when fully half of all home mortgages in the United States were technically in default, and when foreclosures reached the astronomical rate of more than a thousand per day, the home-financing system was drifting toward complete collapse.”

FDR urged Congress to halt the foreclosures. In June of 1933 he signed a law that created the Home Owners Loan Corporation (HOLC), which Congress passed with bipartisan support. (The vote was 383-4 in the House; Republican congressman Robert Fleming Rich of Pennsylvania declared, “I am opposed to the Government in business, but here is where I am going to do a little talking for the Government in business.”) The HOLC was empowered not only to refinance loans in danger of default but to make low-interest loans that would allow people to buy back homes they’d lost to foreclosure.

A year later, Congress passed the National Housing Act, which created the Federal Housing Administration. The HOLC and the FHA (along with Veterans Administration lending set up in 1944) are what made the modern system of mortgage lending. Loans were extended on more favorable terms, with payments on principal (and interest) spread out over twenty or thirty years. FHA-backed loans had little risk to bankers, so interest rates could also be set two or three points lower. Jackson makes a startling assessment of this legacy: “No agency of the United States government has had a more pervasive and powerful impact on the American people over the past half-century than the Federal Housing Administration.” The FHA was instrumental in raising the percentage of Americans owning their home from 44 percent in 1934 to 63 percent in 1972.

But it did more than jumpstart homebuilding and mortgage lending in the 1930s. Because the role of the FHA was to protect the lenders from defaulting borrowers by insuring mortgages, the New Deal bureaucrats began to think like bankers themselves. The HOLC was already at work on how to assess risk: they created an elaborate system for appraising property. In their minds, they were standardizing and professionalizing the practice of appraisal. “A less favorable judgment would be that the Home Owners Loan Corporation initiated the practice of ‘red lining,’” Jackson writes.

The HOLC created detailed, color-coded “Residential Security Maps” ranking all neighborhoods in every American city; they used green and blue for “desirable” areas and yellow and red for the ones perceived to be in decline. The rating system ranked homogenous neighborhoods as best. But only a particular kind of homogeneity. “Homogenous meant ‘American business and professional men.’ Jewish neighborhoods, or even those with an ‘infiltration of Jews,’ could not be considered ‘best’ any more than they could be considered ‘American,’” according to Jackson. “As was the case in every city, any Afro-American presence was a source of substantial concern to the HOLC.” Looking in 1941 at the prospects for St. Louis, “the Federal Home Loan Bank Board (the parent agency of the HOLC) repeatedly commented on the ‘rapidly increasing Negro population’ and the resulting ‘problem in the maintenance of real estate values.’”

Because the HOLC was working with troubled mortgages, it wasn’t able to redirect its own lending to affluent areas: “The damage caused by HOLC came not through its own actions, but through the influence of its appraisal system on the financial decisions of other institutions.” Banks and the FHA were quick to adopt the standards of risk established by the maps—that is, to be guided by redlining. As Jackson explains, “Reflecting the racist tradition of the United States, the Federal Housing Administration was extraordinarily concerned with ‘inharmonious racial or nationality groups.’” The FHA’s 1938 Underwriting Manual warned that “if a neighborhood is to retain stability, it is necessary that properties shall continue to be occupied by the same social and racial classes.”

As case studies, Jackson examines the ways that Residential Security Maps were used in St. Louis, Missouri, and in Newark, New Jersey. But one of his most telling examples describes events that took place in late 1930s Detroit. “As Detroit grew outward, white families began to settle near a black enclave adjacent to Eight Mile Road,” Jackson writes. “By 1940 the blacks were surrounded, but neither they nor the whites could get FHA insurance because of the proximity of an ‘inharmonious’ racial group. So in 1941 an enterprising white developer built a concrete wall between the white and black areas. The FHA appraisers then took another look and approved mortgages on the white properties.”

A Ton of Bricks

The methods of redlining and other forms of discrimination were well understood—especially by those who experienced the effects—many years before Jackson documented these facts in Crabgrass Frontier. He notes that Columbia professor and urban planner Charles Abrams pointed a strong “accusatory finger” at FHA practices in 1955. “From its inception FHA set itself up as the protector of the all white neighborhood,” Abrams wrote at the time. “It sent its agents into the field to keep Negroes and other minorities from buying houses in white neighborhoods.” Community leaders in the civil rights movement built on such analysis as they fought against housing discrimination.

Banks and the FHA were quick to adopt the standards of risk established by the Residential Security Maps—that is, to be guided by redlining.

In fact, Jackson notes that by the time his book came out, the literature tracing the effects of redlining on urban disinvestment was “enormous.” The growing awareness of government’s role in perpetuating housing discrimination eventually led Congress to pass the Fair Housing Act, which was signed into law by President Lyndon B. Johnson in April of 1968. In August of the same year, Johnson signed another housing bill that some believed was even more important: the Housing and Urban Development Act, which created low-income housing subsidies and rental assistance and increased funding for public housing. Congress had already established the new department of Housing and Urban Development three years earlier; LBJ said the 1968 addition to HUD’s responsibilities was “what I genuinely believe is the most farsighted, the most comprehensive, the most massive housing program in all American history.”

Yet by that time, the white suburbs might as well all have had concrete walls around them. When civil rights activists sued to desegregate public schools in Detroit, they argued that suburban schools should be included in an integration plan. In 1974, the U.S. Supreme Court, by a five to four vote, rejected this logic. As legal scholar Richard Rothstein recounts in The Color of Law, Justice Potter Stewart wrote, in a remarkably uninformed opinion, that whatever racial segregation existed in Detroit had come about because of “unknown and perhaps unknowable factors such as in-migration, birth rates, economic changes, or cumulative acts of private racial fears.” Even though a lower court finding traced the relevant history of government bias, Stewart boldly declared that “no record has been made in this case showing that the racial composition of the Detroit school population or that residential patterns within Detroit and the surrounding areas were in any significant measure caused by governmental activity.”

Meanwhile, President Nixon took action in 1971 to scale back the LBJ-era federal attempts to help low-income buyers and renters. President Reagan in the 1980s furthered the notion that public housing was a failed effort by the dreaded Big Government and made massive cuts in funding for this housing, as well as for Section 8 vouchers for low-income tenants. More recently, current Chief Justice John Roberts echoed Potter Stewart in a 2007 Supreme Court ruling again rejecting the idea that the government has any responsibility for the housing segregation that affects public schools: “The distinction between segregation by state action and racial imbalance caused by other factors has been central to our jurisprudence. . . . Where [racial imbalance] is a product not of state action but of private choices, it does not have constitutional implications.”

Thus, a political culture has swept away, in an act of outright denial, a well-documented half-century of history in which the liberal and enlightened leaders of the New Deal decided all the best, most effective government efforts, and all the important subsidies, would go to advance the opportunities for white families to live in the suburbs.

Black Wealth, White Wealth

Some kind of suburban growth would have taken place in America no matter what. But in Jackson’s final chapter, he asserts that “suburbanization was not an historical inevitability created by geography, technology, and culture, but rather the product of government policies.”

Those policies have given us the nation we have today, in which tax benefits favor homeowners over renters, in which the automobile won out over public transportation, and in which cities and suburbs were divided instead of integrated, which made it nearly impossible to have equal opportunities in education, job prospects, health care, or public safety. Rothstein makes the argument that all government actions that have denied equal treatment of citizens violate the Fifth Amendment, and actions that treat African Americans as second-class citizens violate the Thirteenth and Fourteenth Amendments. Therefore, he concludes, the United States has a constitutional obligation to reverse the effects of such actions. But, of course, we also live in a nation where the highest court is blind to history. And if today’s right-wing leaders get their way, the next generation of students will be too.

In the years after Crabgrass Frontier was published, one of the most far-reaching effects of segregationist housing policies began to get serious attention. Promoting home ownership for whites while excluding minorities has enormous implications for who gains asset wealth over time and who doesn’t. Generations of Black Americans were locked out of what sociologists Melvin Oliver and Thomas Shapiro described as “the greatest mass-based opportunity for wealth accumulation in American history.” In their 1995 book Black Wealth/White Wealth, they note that even as Black middle-class families were gaining ground in comparative levels of income in the latter half of the twentieth century, they were lagging far behind in asset wealth—this was true for financial assets in particular, though also for functional assets like homes and cars. This wealth gap grew through the 1970s and 1980s. By 1988, they reported, the median net worth for white families was $43,800. For Black families, it was about $3,700.

Recent crises have not improved the picture. The Pew Research Center reported in 2017 that the Great Recession of 2008 “triggered a sharp, prolonged decline in the wealth of American families, and an already large wealth gap between white households and black and Hispanic households widened further in its immediate aftermath.” The yawning gap between Black and white homeownership rates, as well as the disparities in what those homes are worth, combine to produce a statistic, found in a 2020 Brookings Institute report, that shows what the long history of discrimination in the American housing market has wrought: “Of the $30.8 trillion in total real estate assets reported in the second quarter of 2020, white households held 78 percent ($23.9 trillion) compared to 5 percent ($1.6 trillion) held by Black households.”

While inequalities deepen, a wider group of Americans has been set back by the inability of the American housing sector to provide reasonably priced houses and apartments. Rents in many cities have been jacked up, and more people also have been priced out of buying a home. If you take the median home price in 1985 ($84,300), when Crabgrass Frontier was published, and put that in today’s dollars, you get $240,400. Yet the median home price at the end of 2019 was $327,100—and at the end of 2022, it was up to $467,700.

What to make, then, of that observation Kenneth Jackson began with: that a society reveals itself by its “treatment and arrangement of shelter”? We know that plenty of other nations have managed to use government power to provide decent housing. There are models in Europe that show how to create social housing in urban cores that is subsidized but also integrated in terms of income level and race. In Sweden, public housing is available to all, regardless of income. In the Netherlands, social housing accounts for about 30 percent of the housing stock; in Vienna, Austria, 60 percent of residents live in municipally owned or state-subsidized housing.

There were moments when planners in the United States experimented with “model cities,” and when the federal government has moved to prevent the collapse of the housing market, and when it attempted to increase the supply of public housing. Even today, it would be possible in theory for federal, state, and local governments to experiment with social housing, if leaders were willing to put humane values above the continually disproven expectation that “the market will provide.” It would be possible to make reparations for past injustices, and even to think of the promotion of a just society as something we owe ourselves. It would be possible for one of the wealthiest nations on earth to divert a fraction of the amount it spends on advanced weaponry to make sure people weren’t shunted into tent cities. But, judging by our history, that’s not who we are.