TOPIC 7.10 The New Deal

Racist Federal Housing Polices & today’s Wealth Gap

KC-7.1.III.A Franklin Roosevelt’s New Deal attempted to end the Great Depression by using government power to provide relief to the poor, stimulate recovery, and reform the American economy.

Objective: Students will be able to explain how racist federal housing policies caused America’s large racial wealth gap.

This key concept in An Antiracist classroom:

“African Americans were unconstitutionally denied the means and the right to integration in middle-class neighborhoods, and because this denial was state-sponsored, the nation is obligated to remedy it.” - Dr. Richard Rothstein

Today, Black Americans make 60% of what White Americans make. However, Black median wealth is only 5% of White median wealth. Historian Dr. Rothstein argues that two New Deal programs, especially the PWA and the FHA, created America’s current hyper-segregated cities.  More than talent, hard work, or luck, American wealth comes through homeownership. The federal government helped White Americans obtain their own home while explicitly denying these benefits to Black families. FHA subsidized residential development homes sold for $4,000 in 1935. The same homes are selling for nearly $400,000 today. This is the #1 reason for America’s current wealth gap.

Notes

This “mini-lecture” introduces students to the thesis of Dr. Rothstein’s argument. Dr. Rothstein is considered the leading expert on race and housing inequality in the US. This 1/2 lesson is designed for the New Deal unit, but in the past, I have also moved this back to unit 8 and the post war economy. Many of the issues highlighted in this lesson were further exacerbated by the G.I. Bill and the rise of suburbia.

This lesson can take as little as 15 minutes or can be stretched longer. Either way, it is impactful for students because it is one of the clearest explanations we have for inequities in today’s society. The handout includes a short section from Dr. Rothstien’s book and a graphic organizer to follow the causation argument.

A section of my slides focus on the city where I teach, I highly suggest that any teacher find red-lining charts from the city you are currently teaching. The slides with maps of our own city leave a large impact on my students because the racial segregation of Grand Rapids neighborhoods has not changed much since the New Deal.