1950: Blockbusting
As “urban blight” was being used to claim desirable real estate in the city from African American residents, real estate speculators were increasing their use of a prejudice-driven tactic called “blockbusting.”
Blockbusting was used to clear entire neighborhoods once populated by middle- or upper-class whites so that the homes could then be sold or rented at large profits to African Americans who had few choices for home ownership. At its most basic level, blockbusting was the process of scaring white people out of neighborhoods so corrupt investors could buy their houses at a reduced price and then sell or rent those same houses to African Americans at a huge profit. Historian Edward Orser (1994) described blockbusting as
The intentional action of real estate speculators to place an African American resident in a house on a previously all-white block for the express purpose of panicking the whites into selling for the profit to be gained by buying low and selling high. Blockbusting stepped into the artificial void created by the dual housing market [where whites could buy wherever they wanted but blacks could not], relying upon African American housing needs and white racial fears to manipulate the process of racial change for their own ends. In doing so, they provided a commodity to African Americans that they previously had been illegitimately denied. But the transaction was typically exploitative, victimizing both sellers and buyers. (p. 84-85)
Pamphlet demonstrating the tactics used during blockbusting. The text of the pamphlet reads: “Look at these homes now! An entire block ruined by Negro invasion. Every house marked “x” now occupied by negroes. Actual photograph of 4300 West Belle Place. Save your home! Vote for segregation!”
Source: “The Making of Ferguson,” Missouri History Museum Library and Research Center.
Once white owners sold their houses to speculators at a loss, African Americans were then duped into contract or lease-option housing schemes that prevented them from owning the homes they thought they were buying. Home contracts did not require down payments or closing costs from buyers. These terms were initially attractive to African Americans with little or no credit and who were considered by lenders as “high-risk” because of their race and lower income. But, unknown to the buyers, these housing contracts were not real mortgages (Orser, 1994, p. 91). The person who listed the home sale—a real estate speculator—held the home title and maintained the mortgage with a bank or lender. In turn, the speculator established a legally binding contract with the “buyers,” usually an African American family.
Within these complex home contracts, small-print terms allowed the speculators to raise rent or terminate contracts at any point for almost any reason, which happened frequently. Some of these contracts were even verbal agreements, and therefore even easier to dissolve. Once the speculator declared the contract null and void, the family would have to vacate the home. Then the process would start all over again with another unsuspecting “buyer” eager to escape old and neglected neighborhoods (Orser, 1994, p. 91). Rothstein (2017) notes that it was “[t]he FHS’s redlining [that] necessitated the contract sale system for black home owners unable to obtain conventional mortgages, and this created the conditions for neighborhood deterioration” (p. 97). There were many neighborhoods in St. Louis that collapsed into a cycle of poverty due to blockbusting and contract housing.
The rapid increase of blockbusting and new availability of GI Bill suburban homes led to the massive out-migration of white people from U.S. cities including St. Louis.
This white migration out of the city into the suburbs became known as “white flight.” In turn, the tax base of the city collapsed, leaving urban areas depressed and African Americans with fewer and fewer properties they could purchase. This situation made an already bad housing shortage worse (Orser, 1994, p. 4).
The post-WWII industrial contraction experienced across the U.S. impacted St. Louis considerably and exacerbated the neighborhood deterioration caused by redlining, blockbusting, and white flight.
This economic slump hit the Black community especially hard. Lang found that “By the mid-1950s, St. Louis had suffered the loss of more than eleven thousand industrial jobs, due in large part to the westward suburban growth and capital flight to the outlying St. Louis County” (p. 104). With large portions of the city falling into neglect, the St. Louis Land Clearance for Redevelopment Authority (LCRA) “assumed oversight and land acquisition, relocation, demolition, and the sale of cleared inner-city properties to developers. The agency also cooperated with the St. Louis Housing Authority in the planning and construction of federally subsidized housing projects” (Lang, 2004, p. 104).
The segregation of St. Louis City was again reinforced and “a revival of corporate sway over public affairs” was solidified (Lang, 2004, p. 104). Urban decision-making organizations like Civic Progress, Incorporated, and the Chamber of Commerce were filled with white, affluent corporate leaders from “Southwestern Bell Telephone Company…the May Company…McDonnell Aircraft Company…and Anheuser-Busch” (Lang, 2004, p. 105). These decision-makers significantly influenced the racial segregation of St. Louis for decades, fostering exclusionary zoning that benefited white people and allowing developers to create “covenant” communities that only permitted white people to purchase properties in those neighborhoods (Oliveri, 2015, p. 1053).
Today, the results of this destructive process are evident by the vacant and derelict houses and marginalized neighborhoods in north St. Louis or just north of the “Delmar Divide.”
Racist urban renewal initiatives forced downtown Black residents north and west. By 1960, Lang found,
The white population there had simultaneously dropped from 81,5000 to 24,400. South St. Louis remained predominantly white, but neighborhoods north of Delmar Boulevard and south of Natural Bridge Avenue became solidly black as white St. Louisans quit their homes for residences in Berkley, Ferguson, Creve Coeur, Clayton, and other growing St. Louis County settlements. (p. 140)
Lang write further that “White residency, while declining in the city, had expanded in the county from 406, 349 to 703, 532” (p. 140). This separation of resources led to the ongoing cycle of poverty and neglect north of Delmar Boulevard, and by 1970, “the residential segregation index in St. Louis was the highest among eighteen major northern cities” (Izzo & Looker, 2022, p. 12). Today, residents north of Delmar - who are mostly Black - experience a lower life expectancy, have fewer educational and employment opportunities, have lower income, but higher rates of crime and illness than do their St. Louis neighbors south of Delmar (Cambria et al, 2018, p. 6).
The long, brutal history of slavery, segregation, redlining, blockbusting, contract housing, prejudiced employment, and other forms of systemic racism eventually led people to organize through the “common cause approach” and rise up in resistance through the civil rights movement of the 1950’s and 1960’s (Dowden-White, 2011, p. 94).