How Kalamazoo racial segregation fueled today’s home affordability problem

KALAMAZOO, MI — In 1950, Kalamazoo’s Northside was a working-class neighborhood of factory workers and tradesman, many of them Dutch immigrants or first- or second-generation Dutch Americans.

The neighborhood had almost 11,000 residents, 87% of them white, most of whom lived in two-story homes built in the early 20th century. The median income for the Northside west of Rose Street was above the city median, Census data shows.

By 1970, only 20 years later, the Northside was one of Kalamazoo‘s poorest neighborhoods, home to two-thirds of Kalamazoo‘s Black population. The neighborhood’s total population had dropped to 8,200.

Today, the Northside has less than 5,000 residents, most of them Black. In recent years, the Northside has begun to revitalize, but it’s still a neighborhood plagued by poverty and urban blight.

The massive white and middle-class flight out of the Northside and the neighborhood‘s economic decline was no accident. It was a result of public and private policies — including racially restrictive housing covenants, steering and redlining — explicitly designed to keep Black residents out of white neighborhoods and segregate Kalamazoo housing by race, all the while starving Black neighborhoods of resources.

These practices, which occurred across the country, began in the 1920s and ‘30s and continued for decades.

During the post-war housing boom, Black individuals from the South moved in large numbers to northern cities like Kalamazoo. As recently as the 1960s, it was perfectly legal to refuse to sell homes in white neighborhoods to Black buyers, regardless of their income. It was standard practice to steer Black homebuyers to certain neighborhoods, and to deny Black neighborhoods access to federally subsidized mortgages because the loans were seen as too risky.

These practices were not only legal, but encouraged by the Federal Housing Administration, mortgage underwriters and realtor associations as sound public policy, the history shows.

By the time discriminatory housing practices were outlawed in 1968, the damage was largely done. Housing patterns were established. Many Black residents had been priced out of more affluent areas, stuck in neighborhoods with stagnating home values. The number of dilapidated homes in neighborhoods like the Northside proliferated, in part because lenders were reluctant to fund projects like roof and furnace replacements.

And even after redlining and racial steering were legally banned, the practices continued unofficially.

“It’s redlining by another name,” said Mattie Jordan-Woods, who recently retired after 36 years heading the Northside Association for Community Development.

The impact of redlining is still being felt today, says Mary Balkema, Kalamazoo County’s housing director.

In discussing the area’s current shortage of affordable housing, one oft-overlooked factor is the deteriorating housing stock and vacant lots on the Northside and other redlined areas, she said.

“A lot of those places that were redlined, there’s no housing there today,” Balkema said.

“On the Northside, after it was redlined and the banks wouldn’t give you any money to invest in your house, those houses fell into disrepair. And so 50 years later, of course, that’s where I did the most demolition” as head of the county lank bank, she said. “It really clicked in my mind,” the connection between redlining and the current housing stock.

Some scoff that redlining is old history, Balkema said. “But now when you’re still living the effects from it, it doesn’t seem that long ago.”

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History of redlining

Before the New Deal, homeownership was out of reach for many Americans.

“You’d have to put too (much) down, like 50%, and the loan terms were too short, like two to three years,” because foreclosure rates were high and banks saw home mortgages as too risky, said Matt Smith, a historian with the Kalamazoo Public Library who has researched redlining in Kalamazoo.

The Roosevelt administration addressed that by creating the Federal Housing Administration and offering government-backed loans, in which buyers could put down 20% and get a 20-year mortgage. FHA loans not only had longer terms, but lower interest rates because they were guaranteed by the government.

“So for the first time in American history, the federal government was inserting itself into the private mortgage industry to create home ownership as a massive opportunity,” Smith said.

But the program came with policies explicitly designed to enforce racial segregation of housing. The FHA underwriting manual specified that “incompatible racial groups should not be permitted to live in the same communities.”

To determine eligibility for FHA mortgages, the federal government mapped every U.S. city with at least 40,000 residents, including Kalamazoo, and color-coded areas within each city.

Green or blue indicated “desirable” neighborhoods, worthy of FHA mortgages. Mortgage applications for homes in yellow areas were scrutinized much more closely. Homes in red zones were generally ineligible for FHA mortgages, a practice known as redlining.

Race played a big factor in the color-coding. Green and blue neighborhoods were those with no Black residents, few immigrants and had racially restrictive covenants on home deeds. Yellow neighborhoods typically had significant immigrant populations and/or bordered neighborhoods with Black residents and lacked restrictive covenants. Black homes were typically put in red zones, Smith said.

When Kalamazoo‘s map was created in 1937, Black residents were only 2% of the city’s population. But with almost surgical precision, Smith said, the appraisers redlined most of the clusters of Black homes. Of the city’s roughly 1,000 Black residents, all but 17 families were in a red zone and the remainder were in a yellow zone, Smith’s research found.

The Northside east of Burdick Street was the largest redlined area in Kalamazoo. While Black residents were only 10% of that area’s population, it also was the largest concentration of Black homes in the city, Smith said.

Meanwhile, the western half of the Northside and the adjoining West Douglas neighborhood were coded yellow because of the large number of immigrants, primarily Dutch and Italian, and because of potential the Black population would expand beyond a few families in those areas, according to notes from the 1937 government appraisers.

White flight out of the Northside quickly began, Smith said, although it was slowed by World War II and the housing shortage immediately afterwards. Still, by 1950, the Northside’s White population was shrinking and the Black population was growing, from several hundred Black residents in 1937 to 1,252 in 1950.

“It was like a snowball rolling down a hill,” Smith said, “and that snowball was getting much bigger and much faster” after 1950.

White flight

Redlining wasn’t the only factor in play.

Racially restricted covenants came into popularity during the 1920s in Kalamazoo, Smith said, as new housing sprung up in neighborhoods such as Westnedge Hill and the Kalamazoo College area. The covenants were clauses in home deeds stipulating the property could not be sold or leased or otherwise occupied by Black people.

A 1945 report estimated 85% or more of homes in Kalamazoo and Kalamazoo Township had racially restrictive covenants. The covenants are a big reason Kalamazoo’s Black population became concentrated on the Northside: Its homes were largely built before restrictive covenants became popular, so it was one of the few areas in Kalamazoo where Black residents could buy or lease homes.

In 1948, the U.S. Supreme Court ruled racially restrictive covenants were not legally binding, although they were not banned. Rather, the court ruled, compliance was voluntary — people could ignore or comply with restrictive covenants as they wished, which meant white homeowners and developers were still free to refuse to sell to Black individuals.

That tacit endorsement of housing segregation set the stage for the 1950s and ‘60s, when the U.S. experienced explosive growth in suburban housing and as well as migration of millions of Black people to northern cities.

The post-war housing boom included Kalamazoo neighborhoods such as Westwood, Arcadia, Winchell, Milwood and the southern part of Westnedge Hill, where the number of homes doubled between 1950 and 1970. But these were neighborhoods marketed almost exclusively to white residents, a practice that was legal until the 1968 Fair Housing Bill.

By then, the aggressive efforts at segregation had already set the area’s housing patterns.

The 1970 Census shows the the Winchell/Oakwood and Milwood neighborhoods were 99% white that year. Arcadia, Westnedge Hill, Westwood and the city’s far northeast corner around Spring Valley Park were 98% white.

Meanwhile, Kalamazoo’s Black population grew from about 1,000 residents in 1945 to more than 8,500 in 1970. Two-thirds of the city’s Black population lived on the Northside by 1970. Most other Black households lived in the Eastside and Edison.

For decades, Black families in Kalamazoo and elsewhere had limited housing options.

The more white and middle-class flight that occurred in a neighborhood, the less homes were worth based on the real estate mantra of “location, location, location.”

In 1950, the median value of owner-occupied homes on the Northside east of Rose Street was 74% of the city median. West of Rose Street, the median value was 89% of the city’s, Census data shows. By 1970, that dropped to 49% and 61% respectively.

Things didn’t improve much after passage of the 1968 Fair Housing Bill, Jordan-Woods said. Enforcement was spotty, and lenders still created barriers for Black buyers and those investing in Black neighborhoods. For instance, a 1992 national study found middle-income Black residents were 2.5 times more likely than middle-income white residents to be denied a mortgage loan.

In 1988, the Kalamazoo Gazette had white and Black reporters test the renting practices at 34 local apartment complexes. At one in five places, the Black reporters faced resistance to a rental application.

“The system of redlining evolved to make sure it stayed in place” after 1968, Jordan-Woods said. “It changed its way of doing business, but the purpose remains the same.”

A 2022 study using federal data found white U.S. households have a median wealth of $300,000 compared to about $45,000 for Black households. Much of the gap reflects difference in homeownership rates and home equity, the study found.

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Gentrification

Redlining and other related practices didn’t just impact individual Black households. It also depleted the city’s housing stock.

The Northside area redlined in 1937 had almost 1,400 dwellings in 1950, Census data shows. It now has 448, and a quarter of those are vacant, according to Census estimates.

“After 50 years of disinvestment, I’m absolutely convinced that we need to over-invest in the Northside to bring the middle class back,” Balkema said. “You have to invest in a place that has been disinvested for 50 freaking years. That’s the only way.”

And indeed, that’s beginning to happen.

The number of vacant lots, the neighborhood’s proximity to downtown and the availability of state and federal grants for economically distressed areas like the Northside have prompted a revitalization in recent years.

The new affordable housing projects on the Northside — all the result of private-public partnerships — include:

• Harrison Circle, a residential/commercial complex, opened in 2021 on East Ransom Street. Sixty-four of its 80 apartments are reserved for households with an income of 30% to 80% of Kalamazoo County’s area median income (AMI).
• Zone 32, a 12-unit complex opened earlier this year on Frank Street. Two units are for households making 60% of AMI, six for 80% AMI, and the rest at market rate. The homes are next to the YMCA Northside Early Childhood Center.
• Construction of four new homes along West Ransom Street, three of which must be sold to low- or moderate-income households. They are the first of 21 homes sponsored by the Northside Association for Community Development.
• Legacy Senior Living, a 70-unit complex for low-income seniors spearheaded by Mount Zion Baptist Church, is under construction near Burdick and Frank streets.
• This month, a ground-breaking was held for River’s Edge, a 228-unit complex in the southeast corner of the Northside. Of those units, 184 will be for households with incomes under 60% of AMI and the remaining 44 for 120% of AMI.

The burst of development has Jordan-Woods worried about a new issue: gentrification.

She notes the Northside has a median household income of under $30,000. But the housing projects use the county’s median income as its gauge for affordability. That means a two-person household could earn up to $96,840 and still qualify for a River’s Edge apartment. Even 60% of AMI is $48,420 for a two-person household.

“They keep calling it affordable housing, and the question is, affordable for who?” Jordan-Woods said. “Developers keep getting money for low-income neighborhoods, using their statistics, and then they’re building housing that (neighborhood residents) can’t afford. So how are you making the neighborhood better? Or you’re making the neighborhood better for who?”

Jordan-Woods agrees concentrated poverty is problematic, so it’s important to spread low-income housing throughout the community. That said, officials need to ensure Northsiders aren’t priced out of their neighborhood.

“If you don’t do that, than what you’ve done is displace the community,” she said. “So don’t stockpile the poor, but don’t forget the poor.”

Multiple strategies converged to create the Northside’s struggles, she said. Now, “there’s no one strategy that can address (the legacy) of redlining.”

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This story is part of a solutions-focused reporting series of Southwest Michigan Journalism Collaborative. The collaborative, a group of 12 regional organizations, is dedicated to strengthening local journalism and reporting on successful responses to social problems in Southwest Michigan. This story is funded by the Solutions Journalism Network.