Contract Buying and Blockbusting
African Americans who sought to buy homes faced additional forms of discrimination and exploitation. Because most banks would not issue mortgages to black customers, many blacks turned to much riskier methods, such as “contract buying,” to finance homes. Unlike a mortgage, title to the property was not transferred to the buyer until the last monthly payment had been made on the contract. If buyers missed a single payment, they could easily lose their entire investment. Contract buying peaked in Chicago’s North Lawndale neighborhood in the 1950s, quickening the neighborhood’s population shift from 87% white in 1950 to 91% black in 1960. North Lawndale residents formed the Contract Buyers League in 1968 to fight this practice.
Other real estate practices preyed on African Americans desperate to escape overcrowded conditions. “Blockbusting,” sometimes called panic peddling, occurred when real estate agents and speculators spread rumors about the imminent move of black families into a white neighborhood, provoking white owners into selling their homes below market value. In July 1962, Alfred Balk, a freelance reporter in Chicago, published an exposé on blockbusting in the The Saturday Evening Post. In Chicago, Balk’s article prompted debate about fair housing practices, and Martin Luther King, Jr., challenged blockbusting during his 1966 civil rights campaign in Chicago.
After World War II, many social activists, city officials, and Bronzeville residents looked to public housing as the solution to the housing problems faced by black Chicagoans. Between 1937 and 1980, the Chicago Housing Authority (CHA) built 31,000 apartments for families and 9,000 for seniors. Public housing served to perpetuate segregation, however, as the CHA built most of the units in the Black Belt rather than scattering them around the city. In 1980, blacks occupied 95% of the CHA-owned family units. Public housing failed to live up to its promise, plagued by ill-conceived designs, poor maintenance, and bureaucratic inefficiencies. When the city razed many of the complexes in the early twenty-first century, the residents yet again confronted the difficulties of securing affordable housing in Chicago.