“Between 1926 and 1933 the number of annual mortgage failures quadrupled, and by the latter date home mortgages were being foreclosed at the rate of one thousand per day. In New York City alone, 186,000 families were served eviction notices during eight months ending in June 1932.” (P236) Home Owners Loan Corporation (HOLC) was created by the New Deal policymakers. It was designed to bail out financial disasters for homeowers. It offered direct low interest, long-term loans to homeowners who were in danger of default. HOLC helped to secure private homes in U.S. However, its racist attitudes and bias, were often cited as mortgage in “re
dlined”.
Housing & Great Depression
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With the problems that Chao mentioned came solutions trying the housing crisis during the Great Depression. One included an insurance program with the goal to secure a balance within financial situations between homeowners and mortgage lenders. Another was implementation of publicly sponsored construction to elevate housing conditions. As meaningful and helpful these programs were they still geared towards a certain group as suggested by Chao. Insurance catered to white families that migrated to suburban areas while “housing assistance” specialized in that the poor, primarily people of color lived in isolated urban areas away from the rich or more advantaged.
Following these biases the Federal Housing Authority (FHA) established by Congress’s National Housing Act “drastically revised the nature of mortgage lending and by doing so initiated a new housing trend in metropolitan areas.” So what would that mean for the people who did not live in metropolitan or suburban areas. Geared to push people in suburbs that were “springing up,” opposed to lending money to those in old city buildings the FHA helped more white families than they did African Americans with their policies. Their plans to give loans at interest rates at 4% over a longer period of time helped many families, but more suburban one than city dwellers. Many found themselves living in shanties opposed to a proper and safer home.
I like how many of us, including myself, can relate to this post. Everywhere around us, people are foreclosing on their houses and properties. The Great Depression began when the stock market fell in 1929. The economy didn’t fully recover until over a decade later. What I find so interesting about how this relates to the present time is how the media and government were saying the economy was turning around since the beginning. Three months after the depression began, President Hoover was already reporting a turn-around in the economy. Similarly, a couple of months after our current recession, the media was reporting a turn-around in OUR economy. Nevertheless, the Great Depression lasted for many more years, years in which shanty towns began to be called “Hoovervilles.” I just wanted to comment on how history DOES seem to “repeat its self.”