American ghettos
"American ghetto" usually denotes an urban neighborhood with crime, gang violence, and extreme poverty,[2][3] with a significant number of minority citizens living in it.
Additional causes of deteriorating conditions in ghettos ranged from lack of jobs and extreme poverty to menacing streets and violence.
These discriminatory federal and state policies, in conjunction with private sector fear for economic loss, led to the systemic exclusion of minorities from loans, access to credit, and higher income.
In 1933, the Home Owners' Loan Corporation (HOLC), a federal government sponsored program was created as part of President Roosevelt's New Deal to combat the Great Depression and to help assist homeowners who were in default on their mortgage and in foreclosure.
[12][page needed] The assumptions in redlining resulted in a large increase in residential racial segregation and urban decay in the United States.
All of these factors play into determining whether a city is a highly desirable location for the FHA loans or a High-risk or "hazardous" zone.
Areas that were coded as red zones had to pay higher interest rates and struggled to access FHA loans.
Access to credit was based on collateral and geographic residence of applicants which automatically disqualified most blacks and most minorities since they were concentrated in deteriorated areas.
[16] Even in areas where exclusion laws were not in effect, real estate professionals instilled fear that blacks would invade white communities and eventually turn it into a red zone.
In addition to encouraging white families to move to suburbs by providing them loans to do so, the government uprooted many established African American communities by building elevated highways through their neighborhoods.
People have the right to live in communities of their choice, and due to cultural, economic, social, and personal reasons, self-segregation continues to prevail in America.
[20] Recent studies in San Francisco showed that groups of homeowners tended to self-segregate to be with people of the same education level and race.
[21] In Buchanan v. Warley, the Supreme Court of The United States sought to overturn a city ordinance that restricted housing rights.
The Supreme Court ruled by unanimous decision that the ordinance from the city of Louisville, Kentucky violated the freedom of contract guaranteed under the 14th amendment.
[22] Corrigan v. Buckley did not directly affect the Buchanan v. Warley ruling on city ordinances, but rather it allowed neighborhoods to enact racially discriminatory covenants.
