Chicago’s neighborhoods carry more history than most of us learned in school. On Thursday, August 5th, REALTORS® gathered at the Obama Presidential Center for Chicago REALTORS® 360°: Power, Place & Progress, a morning built around one central question:
How has the city’s housing history shaped the investment, ownership and equity gaps we still navigate today?
The first speaker to take on that question was Bruce Mitchell with the National Community Reinvestment Coalition (NCRC). Mitchell walked the room through eight decades of Chicago housing data, and he closed with a single number: nearly 20 years. That’s the life expectancy gap between the “best-graded” and “worst-graded” neighborhoods on a map drawn in 1940.
Keep reading for how he got there and what he says REALTORS® can actually do about it.
Segregation Came First. Redlining Made It Worse.
Mitchell opened with a personal note. His father was a REALTOR® and developer in South Florida in the 1960s, and Mitchell grew up watching desegregation begin while the informal boundaries of his own city stayed firmly in place. “Everyone in the REALTOR® community understood which streets divided the black side of town from the white side of town,” he said, and which properties weren’t shown to certain buyers.
That personal history set up his first and most important point: Chicago was already a segregated city before the Great Depression, shaped by restrictive covenants, deed restrictions, neighborhood associations and violence against Black families who crossed informal boundaries. Redlining didn’t create that segregation. It formalized it. “Segregation came first,” Mitchell said. “Redlining didn’t invent it, but acted as one way of intensifying it.”
The Federal Government Built an On/Off Switch, and Race Was Central to It
The theory behind redlining came out of Chicago itself. University of Chicago sociologists described neighborhood change as a natural, almost automatic progression, and economist Homer Hoyt, the FHA’s Chief Land Economist, turned those ideas into the basis for the Home Owners’ Loan Corporation’s (HOLC) residential security maps starting in the mid-1930s. Every neighborhood in every surveyed city got graded green, blue, yellow or red, with red meaning hazardous, or redlined, where virtually no mortgage lending could take place.
This wasn’t an informal judgment call. The examiner’s form for every single neighborhood had a mandatory line for the percentage of Black residents and the percentage of foreign-born families by nationality. In practice, that operated close to an on/off switch: if a neighborhood had any Black residents recorded, at any percentage, it almost always received a hazardous grade. In Chicago, 30% of the D-graded neighborhoods had some Black population on record.
Race wasn’t the only factor, though. Riverdale on the far South Side was recorded as 0% Black in 1939 and still graded hazardous, on the basis of class, immigrant ethnicity and proximity to the Kensington rail yard and the Acme Steel plant. “Race was sufficient to flip the switch,” Mitchell said, “but it wasn’t the only way that the switch could be flipped.” The grading ran from the 1940 HOLC map until the 1968 Fair Housing Act outlawed the practice — at least 28 years, more than a generation of Chicago homebuyers.
Four Neighborhoods, One 86-Year-Old Map
To make the data concrete, Mitchell walked through four Chicago neighborhoods, each graded differently on that original map, and showed what they look like today.
The Gold Coast was graded A, the best possible rating, in 1940. The examiner’s notes called it “first class,” with 0% Black and 0% foreign-born families recorded. Today it has the highest life expectancy of any Chicago neighborhood at 87.5 years, a poverty rate of 5.8% and a median household income of $154,000.
Mayfair was graded C, coded yellow for “definitely declining.” The examiner predicted “virtually no possibility of reversal.” That prediction didn’t hold: Mayfair is a stable, moderate-income community today, with a life expectancy of 80.2 years and a median household income around $110,000.
Bronzeville was graded D in 1940, described by the examiner as “a poor district of very heterogeneous character,” with a recorded population that was 100% Black at the time. Today it’s one of Chicago’s historic centers of Black culture and commerce, and it has seen real reinvestment. Even so, life expectancy there is still only 70.2 years, and median household income is around $43,000.
Riverdale was graded D in 1939, despite a 0% recorded Black population at the time, driven instead by class and immigrant ethnicity. Riverdale is 91.8% Black today, with the lowest life expectancy of the four neighborhoods at 67.7 years and a poverty rate around 60%.
Lined up side by side, that’s a nearly 20-year gap in life expectancy at birth between the “best-graded” and “worst-graded” neighborhoods on a single map, in the same city, under the same city services. Zoomed out across the entire metro area, the pattern holds: neighborhoods that were graded A in 1940 are 5% Black-majority today, compared to 42% for former D neighborhoods, and the same stair-step pattern shows up in college attainment, household income and home values. In the 2010s, for every 10 mortgages made in a former grade-A neighborhood, only three were made in a former grade-D neighborhood, adjusted for the number of homes in each area.
“The stair steps of disadvantage are not an abstraction,” Mitchell said. “It’s 20 years of somebody’s life.”
What REALTORS® Can Actually Do About It
Mitchell closed with the policy tool built specifically to counter this pattern: the Community Reinvestment Act, passed by Congress in 1977 in direct response to redlining. It requires banks to help meet the credit needs of the communities where they’re chartered, including low- and moderate-income neighborhoods, and it gives regulators grounds to examine, challenge, condition or delay bank mergers based on CRA performance.
Mitchell gave the room three concrete ways to put that leverage to work.
Action Step 1: Know your CRA lenders. Learn which banks in your market have strong CRA performance, and direct business toward the ones that actually invest in the neighborhoods you sell in.
Action Step 2: Use the tools that already exist. Down payment assistance and community development lending programs exist for long-disinvested tracts like Riverdale. Know what’s available, and put your clients in front of it.
Action Step 3: Partner on reinvestment. REALTORS® have day-to-day visibility into where money does and doesn’t flow in the city. That’s real leverage, and it’s worth using directly with lenders and community organizations.
“These burdens were placed in these neighborhoods deliberately, by federal policy and by private banks,” Mitchell said. “That means they can be lifted deliberately too, and you have a role in doing that.”
The map Mitchell showed the room was drawn 86 years ago. It still tracks closely with who gets a mortgage in Chicago today. That’s not destiny, and it’s not the only factor at work, but it’s a pattern REALTORS® can see, measure and respond to.