Historian Rebecca Marchiel has written a book that broadens our understanding of housing justice, interracial coalitions, and the relationship between racism and government regulations.
In After Redlining: The Urban Reinvestment Movement in the Era of Financial Deregulation, Marchiel centers a historical moment when governments held high civic expectations of banks and when people still espoused progressive expectations of their government. This is the United States in the 1970s—home to both the last generation of Americans to grow up with family memories of the New Deal, and the first generation to look out on a future without Jim Crow.
With special thanks to Johns Hopkins University’s 21st Century Cities Initiative, I had the opportunity to chat with Dr. Marchiel about After Redlining. We discussed the last half century of housing policy (and policy history) and what her research suggests regarding the possibility of achieving progressive outcomes through the politics of self-interest.
Like other pathbreaking urban studies written over the last quarter century, Marchiel’s recent book affirms the braided nature of political history and urban history. And yet, in ways totally new, After Redlining also emphasizes the lived, residential experience of late 20th-century policy changes in banking and the mortgage markets, from West Chicago neighborhoods and community centers all the way to Capitol Hill. Marchiel has arguably written one of the first social movement histories of financial deregulation. In so doing, she invites us all to recall a time when—indeed, to imagine a future where—activists, scholars, and even everyday citizens refuse(d) to leave economic analysis, discussions of economic power, merely to the economists.
N. D. B. Connolly (NC): Rebecca, you and I have had the benefit of coming to this work as colleagues in the grand experiment that is American urban history. We overlapped at the University of Michigan many years ago, in the early 2000s. I was a graduate student and you were an undergraduate taking classes with a still very earnest and intrepid professor, Matt Lassiter, who has gone on to work with a number of urbanists who have shaped the field.
What was your early exposure to urban history, as a field? Give us a sense of your hometown, and maybe even the extent to which you learned how to read the built environment as an early student of urban history.
Rebecca Marchiel (RM): Yes, we did overlap at Michigan. I had a very good TA in that class with Matt Lassiter, but, unfortunately, not Nathan Connolly.
My early interest in studying cities does come from my own biography and my own background. My parents grew up in Detroit but, like other white people in the 1970s, they became white-flighters. They moved to Macomb County, where Stan Greenberg wrote his book about Reagan Democrats.
My first interest was not the built environment. It was more about memory: memory of the city that my parents had a lot of nostalgia for, the neighborhood where they grew up, which they spoke of so fondly, the old friends and businesses. I noticed that they didn’t really think about the ways they participated in the neighborhood changing, by deciding to leave it.
I always had questions about the gap between their stories about Detroit and our visits to Detroit. They would always talk about where things used to be, but they were not very interested in what was there now.
That discrepancy between their own memory and the history of what happened interested me. After Redlining, too, came out of my questions about what other kinds of responses to the potential of living in integrated cities were out there in the 1970s. Paths, that is, that my parents didn’t necessarily take.
NC: Your work is arriving in a moment when the urban history field is finding brand new audiences in policy circles and new kinds of appreciation. In the public arena, beyond the conversations that Ta-Nehisi Coates invigorated, I’m thinking about your own work as part of an extraordinary new library of works that are thinking about life after redlining. For instance, Know Your Price by Andre Perry, an extraordinary work about Black home equity and the loss of it, or Brian Goldstein’s Roots of Urban Renaissance, or Keeanga-Yamahtta Taylor’s book Race for Profit.
Many of these works consider what happens after the fair housing laws are passed and after the Department of Housing and Urban Development (HUD) begins enforcing different kinds of antidiscrimination and so forth. I want to ask about your decision to title the book After Redlining. What did you see as most useful and transformative about taking what we might think we know about the redlining period and giving us the chance to really bear down and look at what happens after some of the most important legislation of the 1960s has passed?
RM: The title After Redlining refers to what happens after the institutions responsible for redlining finally admit that redlining is real. For a long time, the narrative of financial institutions for savings and loans had been: “We’re not discriminating. We’re not creating these conditions. We are responding to consumer demand. We’re responding to what home buyers want.”
Then, there’s a moment that unfolds over the course of the 1970s where you do have some of these institutions start to admit that redlining had been part of their common sense, part of the way that they made their business decisions. Banks became ready to talk about different ways of doing business. “After redlining” is a reference to those kinds of institutions and their new recognition of this problem.
Around this time, the federal government, too, starts to recognize that redlining had been standard practice. Congress endorsed antiredlining policies like the Home Mortgage Disclosure Act, which is 1975 legislation that requires that depository institutions—institutions that hold savings accounts—must disclose the geographic location of their mortgage lending, to make it possible for outsiders to see patterns of discrimination. Also, the Community Reinvestment Act of 1977, legislation that says that depository institutions have some obligation to lend or to try to lend in low- and moderate-income neighborhoods near their offices. After Redlining is looking at when those institutions admitted that redlining was real.
NC: Right.
RM: But really, what happens after redlining? The answer is: more redlining.
We know that redlining did not end. There was a 2018 report from the Center for Investigative Reporting that showed there were still a disproportionate number of loan denials for people of color, even if you accounted for things like income and loan amount. Those patterns of behavior are still ongoing. This is, in part, because these patterns are so tricky to pin down: to prove without a shadow of a doubt that the reason a financial institution denied someone a loan was solely on the basis of their race or the racial demographics of the neighborhood. There are other factors that they can point to, like loan-to-income ratio, that make it hard to identify particular instances of racial discrimination in lending.
I was also interested in the different ways discrimination still happens in the realm of housing, but not necessarily attached to redlining. Redlining isn’t the only form of discrimination. If we think about redlining simply as a bank’s decision to refuse a loan in a particular neighborhood because of the demographics of the neighborhood or because of the age of the housing stock, there’s a lot more that happens than just a loan denial.
I was thinking about Keeanga-Yamahtta Taylor’s Race for Profit. She shows that there are instances after the 1968 moment when discrimination doesn’t manifest as loan denials. Instead, we see these overeager real estate hucksters going after low-income people, especially Black women, recognizing that there’s an opportunity to extract wealth from their households and from their neighborhoods by making loans. She talks about the idea of predatory inclusion.
Again, this isn’t redlining. Instead, it’s another form of housing-based inequality. And that comes right after the moment when you’re not supposed to be able to discriminate like that anymore.
NC: You’re exactly right to say that there’s a big gray area between what we imagine as the redlining period and the period we’re in now. As somebody who is learning all the time about his new hometown of Baltimore, one of the things that was really stunning to me was to see what was happening here with reverse redlining in the early 2000s.
You had Wells Fargo targeting Black communities through Black churches, setting them up to be feasted on through these very dangerous forms of credit—adjustable-rate mortgages and the like. In that moment, the argument made to Black people was partly about increasing their financial literacy: “Let’s not think so much about righting the wrongs of the past; let’s not worry so much about the predatory history of the financial sector; let’s increase your financial literacy.”
We can’t understand what happened in the past two decades if we don’t understand what happened in the 1970s, and, particularly, the activism around finance and real estate that you have uncovered. I would love if you could give us a sense of that activism.
RM: I first stumbled upon this project by thinking about contemporary discourses of financial literacy. I worked at a poverty law center in Chicago, the Sargent Shriver National Center for Poverty Law, between undergrad and grad school. I did marketing and development for them. This law center did litigation and advocacy on behalf of poor people, and I was trying to help them raise money to fund that work.
It was very easy to get funding for things like children’s savings accounts, asset-based development, or financial literacy programs. This was, in part, because banks had this mandate from the Community Reinvestment Act that meant they had to do something. By the time I was working there in 2005/2006, banks—instead of figuring out how to necessarily bring new resources for resident-led redevelopment to redlined neighborhoods—were doing things like making donations to the nonprofit that I worked at.
It was much harder to fund our work around public housing or domestic violence. You could easily find money for asset-based development. When I started digging into this project, I thought that I was digging into the history of the Community Reinvestment Act. And I thought for sure what I was going to be writing about was how banks became important to antipoverty programs. But, instead, I found the social movement, which was a lot more complicated and exciting.
The book follows this urban reinvestment movement. It was a multiracial coalition of working- and middle-class urbanites from cities around the country. They organized in neighborhoods that they themselves called “transitional,” meaning the population was changing from all white to integrated, or to majority residents of color. These activists called for urban reinvestment, which they defined broadly. They wanted a new infusion of bank loans to work hand in hand with increased public and private investment in redlined neighborhoods. And so, as they worked to stop redlining, they also called for access to good jobs, affordable energy, more support for senior citizens, and other government policies that could help low- and moderate-income neighborhoods.
NC: You start the book with a chapter titled “Beyond the Backlash.” You’re very committed to making sure that people acknowledge the rise of the right—and white intransigence to, for instance, busing in this period.
But the white folks in your study are slightly different. Tell us a little bit about the social movement in the Austin neighborhood of Chicago. They allow us to gain a different understanding of racial politics in the 1970s.
RM: Many of these white residents were trained and inspired as organizers by Saul Alinsky. They’re taking what they think of as a pragmatic approach to organizing the neighborhood that’s supposed to be about recognizing one’s self-interest and the way that a community organization can help advance people’s self-interest.
Reading through the sources to see how they talk through this issue of relying on self-interest was interesting. Today, we would call some of these activists antiracist, but certainly not all of them. One organizer told another one that while organizing white people in Austin they might hear things that they don’t agree with. The assumption was that some white people might have racist things to say. But the strategy was to talk about how there’s a common interest among Austinites to keep Austin a good place to live. In some cases, that meant avoiding direct discussions about racism.
My research also uncovered contested definitions of what a good place to live looks like. For example, some white Austinites wanted to keep their schools from becoming overcrowded or to prevent panic selling. But, at the same time, many other white people decided that they were all going to try to move out of the neighborhood to escape their new Black neighbors and the declining property values. Austin’s white organizers were trying to emphasize a progressive approach to self-interest—saying that all residents, regardless of race, would benefit from good schools and a stable real estate market, so it was in white people’s self-interest to stay in their neighborhood.
Sometimes, this approach left space for certain folks committed to antiracism and social justice to play a part. In one instance, a white woman moved from the suburbs into Austin because she was trying to figure out how to be in solidarity with the Black freedom struggle. She heard that a way to do this was to move into Austin and join the effort to integrate that community.
This approach also created space for other people who really liked living in a city and didn’t want to move away. One of the leaders of this organization was a person who really liked living in cities, Gale Cincotta. She needed a two-flat house, where her nuclear family could be in one flat and her parents in the other. That was easy to find in Austin but difficult to find in the suburbs. She also didn’t drive a car and she liked walking to bingo. These were the aspects of urban living that people like her found really appealing.
Among the organizers, there was also a group of white people who worked hard to organize the parts of the neighborhood that were becoming predominantly Black. They realized that these areas did not have church parishes or existing community institutions, so they worked hard to build block clubs and create street-level organizations. They were explicit that they were interested in having interracial organizations.
They sent their most committed and most energized organizers to the majority Black section of Austin. It was not the case that all white people in Austin saw the light and nobody moved away. Far from it. Instead, there was a relatively small group of people who were extremely committed to navigating this racial transition, especially because they’d seen the way that it happened in adjacent neighborhoods. They didn’t want a resegregated Austin that was predominantly Black, where the schools were overcrowded. They all wanted to imagine a different possibility: an integrated neighborhood where folks worked together to prevent real estate speculators from determining the fate of the neighborhood.
Emergency Urbanism
NC: What did it mean for people to develop a sense of the financial sector and the role of speculators? Did “financial literacy” mean something different in the 1970s to folks who were trying to find ways of battling against segregation, as compared to its contemporary usage?
RM: The contemporary concept of financial literacy was not front and center to these activists in the 1970s. That said, it’s important to understand the context of how local financial institutions worked in the 1970s in order to understand the social movement in Austin. To their credit, these activists didn’t think that if poor people just figured out how to manage their money, or if poor people could just figure out how to put a little extra aside all the time, it would solve their problems. Poor people are poor because they don’t have money, not because they don’t know where the bank is.
Instead, these activists were interested in learning about how the financial system worked. They were interested in what kinds of rules and regulations were already in place that could help them achieve some of their goals.
Think of the savings and loan companies (S&Ls—otherwise known as “thrifts”) represented in It’s A Wonderful Life. They are out of style now, but, at that time, most white Americans regularly banked with S&Ls. You would cash your paycheck as well as make your mortgage payment at these institutions. Activists raised questions about what existing rules and regulations could hold S&Ls accountable to the nearby community, and what new policies and strategies would have to be put in place to get those institutions to behave like the social institutions they expected them to be.
In the 1970s, “financial common sense,” a term I use in the book, was the idea that New Deal regulations forced S&Ls to be pretty boring community institutions. They were locally oriented. They focused on making loans and collecting passbook deposits. This was not exciting, dynamic, and racy banking. It was routine business.
New Deal regulations meant keeping 80 percent of your mortgages inside of a 50-mile radius. There were also limits on how much interest they could pay on savings accounts. Folks operating on that financial common sense wanted to hold those institutions accountable and ensure S&Ls behaved like the service-oriented financial institutions they expected them to be. Activists started to notice changes to this thinking in the late 1960s and early 1970s, which—after decades of steady relationships between white people and their banks—seemed to have very fishy timing.
As these neighborhoods became what were called transitional urban neighborhoods, with Black and brown neighbors moving in, those banks stopped behaving the way they had. They stopped making fixed-rate, low-down-payment loans there. They stopped issuing home improvement loans there. If they lent in these neighborhoods at all, they offered only the FHA loans that Taylor writes about in Race for Profit. Residents understood these FHA loans to be a kiss of death that ensured the local housing stock would deteriorate. Suddenly, the S&Ls started to treat their neighborhoods the way they had long treated Black and brown neighborhoods, by offering loans at harsher terms, if at all. And while there were broader changes in the late 1960s and early 1970s that created new challenges for thrifts and strained their business model—changes like increased competition from other financial institutions and high interest rates—activists believed that the S&Ls stopped lending in their neighborhoods solely because Black and brown neighbors had moved in.
NC: Your research on S&Ls underscores that these small or medium-sized financial outfits have a specific jurisdiction, and that jurisdiction becomes a place where discrimination can happen. It’s easy to look at a map with areas colored in to represent their grade from the Homeowner’s Loan Corporation and say: this is all we need to know, because we can visualize redlining. But what you’re highlighting is the fact that these small banks were instrumental in creating the redlining problem, because it often came down to close relationships and local knowledge.
How would you say we can appreciate the importance of these locally grounded financial outfits? And how does such an appreciation allow us to rethink the relationship between regulation and inequality?
RM: Activists tried to hold the thrifts accountable locally for redlining, and they also had the ear of the Senate Banking Committee. Regulators were paying attention to the activists who were mad about redlining. Maybe these local institutions were going to be held to account.
But I try to show in the book that the ground was shifting below these financial institutions at the very moment that activists finally get some traction. The 1970s was a terrible time to be a thrift. This was an era of high interest rates. Think about what that means for S&Ls—if you made a bunch of loans before the 1960s and the people are paying back their mortgages with low interest rates, but then interest rates increase. People are expecting higher interest on their savings accounts. You’re taking in a tiny bit of interest, but you’re supposed to pay it out higher.
Free-market enthusiasts, some from the Nixon administration, were starting to make an argument that what was wrong in finance was that the regulations in use had been built for the 1930s, but now we’re in the 1970s. Times have changed. It’s time to rethink what we’re doing here. When thrifts experienced problems due to interest rates, these free-market thinkers argued that these companies should behave like other kinds of banks. They should experiment with new types of investments. And, eventually, that argument succeeded, basically leading to the collapse of this sector of the financial industry.
Many people who worked in this sector were committed to the idea of community lending and saw banking as a kind of service. Some of them were willing to meet with activists. But even if a thrift executive wanted to participate in some of these efforts and start to make more loans in local communities, they still faced these other challenges due to the structure of their business model. They were set up to fail in many ways.
NC: The story of S&Ls is both a local story and a national story, which is challenging to analyze in a monograph. So much of the nuance you have captured, between the religious and the secular sites of organizing, between the folks who are working-class white, middle-class white, and Black—you can’t get that kind of granularity if you’re simply looking at these questions from 3,000 feet up, or general surveys of urban history, or just going to the National Archives. Let me applaud your ability to balance a deep local study with the larger context.
I was fascinated to see how this local study reframes some points that tend to be examined only at the national scale, like state repression. You highlight how this small group of residential, almost community-control, activists organizing for a better Austin was infiltrated by Mayor Richard Daley’s Red Squad. They tried to destroy an organization that they considered to be a threat to Democratic Party machine politics at this time.
RM: To the credit of the historical actors that I studied, their organizing went from focusing on the local level to realizing that the problems they faced were national problems. At first, they encountered problems created by the predatory FHA programs that Keeanga-Yamahtta Taylor writes about, which brought their attention to panic selling and blockbusting.
Hundreds of real estate speculators were flocking to one particular neighborhood and, as they’re trying to figure out why this is happening, they’re always asking who has the power. They’re trying to follow the money. They realized the FHA programs created the infrastructure that this kind of exploitative panic selling required. Recognizing that it was federal policies creating this infrastructure pushed them to look for federal solutions and organize with folks in other transitional neighborhoods around the country who they imagined must be having the same problems. And they were right.
NC: And it was wonderful to learn that my new hometown of Baltimore, Maryland, was where this tiny group from Chicago first arrived to test their attempts to scale up to the national level.
Tell us a little bit about that move in the context of these questions of financial freedom, economic self-determination, neighborhood rights, and so forth. What were their strategies?
RM: This was an instance that elevated my appreciation, as a historian, for contingency. The Organization for a Better Austin had it first big meeting in Chicago in March of 1972, and a lot of people showed up. They had to have an overflow room. After that, they asked themselves what to do next. They had no experience building a national organization, so they held another meeting, in Baltimore.
While they were there, they decided to create a sort of national federation as a way for neighborhood groups to communicate with each other and stay connected. They could talk about best practices and coordinate strategies and tactics. Where national solutions were in order, they were going to need to apply national pressure, so it was important to be able to demonstrate to national policy makers that they had clout across the country. But they were still going to maintain local community organizations that focused on local issues. They had the Alinsky-inspired theory that local issues would get people to show up for a meeting to discuss concrete outcomes where they lived.
But while in Baltimore, they also realized its proximity to Washington, DC. They realized that, when they came together in a place like Baltimore (and eventually in DC), they could show their strength in numbers to national policymakers. They would organize direct actions and protests to get the attention of HUD secretary George Romney and other, more obscure figures, like assistant secretaries of HUD.
These activists knew who those policymakers were in a way that I think a lot of Americans at the time would not have. They showed up at their offices—or showed up at a protest in their backyard and disrupted somebody’s daughter’s wedding, if they needed to. They wanted sit-down meetings.
But how can you support and sustain this work? They had to deal with the question of how to incorporate an organization like that. How do we make it official? They had to create both a 501(c)(4) and a 501(c)(3) because one of them can lobby and the other can raise money. And one of the organizers, an activist named Helen Murray, talked about how, “[We] were out there to shake the trees and whatever name we could go by, we would do that.”
So, they were learning as they were going, inventing the playbook as new problems and new opportunities presented themselves.
NC: And they made new locally focused moves in Baltimore, correct?
RM: Yes. One of the affiliates in Baltimore had an interesting antiredlining strategy called Dedicated Dollars. It was a campaign to organize folks in Baltimore to push a local S&L to give depositors a voice, allowing them to decide how it invested their money. They used pledge forms to indicate where they wanted their dollars to go.
The campaign was supposed to show the financial institution that these folks were organized—and if they were organized enough to say, “We want our loans to go to particular places,” they might also be organized enough to pull their money out of that institution and take it somewhere else.
Cities Run by Real Estate
NC: In your book, you draw the distinction between fiscal policy and monetary policy. When people criticize how highways plowed through center cities, that’s an example of a program that’s rooted in taxing and spending. It’s fiscal policy that’s applied to the urban landscape. The FHA is a program of mortgage insurance, but it really is about using government dollars to try to underwrite something. It’s a government expenditure.
How is monetary policy different? And why does monetary policy matter for telling the story of urban equality?
RM: Monetary policy is the state’s ability to create money, I would say. Also, setting interest rates shapes how people can access money. We’re talking about the various ways that money is created, rather than about congressional appropriations alone.
When I started out on this project, I was not interested in monetary policy. But I realized from the sources that I was going to have to learn about monetary policy.
For example: There was a moment in the late 1970s when activists that I study had already won some gains through the Community Reinvestment Act and the Home Mortgage Disclosure Act. They had an opportunity to start to try to implement community bank partnerships that could help neighborhood-led revitalization. But, in the late 1970s, interest rates could be as high as 15 percent on a mortgage. These activists were looking at what they had won, the ability to get partnerships with banks, and they said, “Well, what good is this if nobody in our neighborhood can afford 15 percent on a mortgage?”
They started to ask questions about monetary policy. Who sets interest rates? Why are they so high? Who is this helping? It’s not helping us.
That’s how I made my way into caring about interest rates and the Federal Reserve, basically following the sources. The reason it mattered for urban history is because the Federal Reserve’s monetary policy under Paul Volcker, in the late 1970s and the early 1980s, created new obstacles for these activists who were trying to revitalize their own neighborhoods on their own terms. The high price of lending made their goal of revitalization without displacement or gentrification difficult.
They started to target the Federal Reserve and protest Paul Volcker. They ended up with some sit-down meetings and listening sessions. But, ultimately, what I show in the book is that it was very hard for ordinary people to get the Federal Reserve to do something. And, in fact, the work of the Federal Reserve is often treated as something people shouldn’t pay attention to unless they’re trained in economics. But that was not the case in the late 19th century, with the Populist Movement, when all kinds of people were talking about the relationship between money and democracy. US history classes cover these events but, by the late 20th century, money had become a technocratic, backroom topic, including among historians. Yet the activists I examine learned about monetary policy, wrote about it in their newsletter, and organized protests against the Federal Reserve.
The activists began to come up with a new vocabulary for macroeconomics when they started to engage with monetary policy. They weren’t talking about workers and management or workers and capital. They weren’t talking about the workplace as the site to make sense of their class interest. They were talking about what it was like to be a low- or moderate-income person. They were talking about what it was like to be someone who needs to borrow in order to make it through their economic lives.
They started to talk about the Federal Reserve doing redlining by class, arguing that high interest rates unfairly denied low- and moderate-income Americans access to credit because borrowing became so expensive. They started to talk about the Federal Reserve as an entity that was guilty of economic discrimination. The historian David Stein has reminded us that the Federal Reserve is supposed to care about full employment, too. It’s not supposed to care only about interest rates and inflation. The activists became aware of that as they wanted to learn more about where interest rates came from.
The kicker for me was seeing the obstacles that monetary policy created for people who were trying to improve their lives on their own terms. Eventually, these activists became frustrated about the lack of access to good jobs in some of these neighborhoods, too, and monetary policy helped explain this phenomenon because of Paul Volcker’s recession.
NC: The New York City urban planner Robert Moses has become one of the big villains for scholars writing US urban studies about the mid-20th century, but now you’re bringing characters like Paul Volcker into our understanding of how inequality was replicated following the civil rights legislation of the 1960s. So important.
To close, I would like to ask about other ways that our understanding of urban history is changing. The civic conversation around housing today presumes a knowledge of redlining. Many people across the political spectrum invoke it. For you, as somebody who has now shown all these other ways that inequality persists after redlining, including a host of additional actors that play a part, how would you like to move the conversation forward?
RM: J. P. Morgan Chase, Wells Fargo, and all these institutions, they still have these community lending units or neighborhood programs. They have corporate responsibility arms, even as they’re doing a lot of other activities that undermine what this tiny little division is doing. If you walk into your bank, there are often posters celebrating their asset-based development or their college savings accounts for local youth. But I think that if we historicize those programs, we find that these are the result of activism, in part.
There was a new regulatory framework in the 1970s that said community reinvestment was important. Banks had been redlining; they had to stop doing it. And then, instead of reparations for that harm, we got neighborhood lending units within financial institutions that remain much more interested in maximizing profits and seeking out lucrative investments. Neighborhood lending units have not changed the mission of the banks that they are a part of. This is not meaningful repair.
One of the ripple effects of the fact that you can now pick up the New York Times and read about redlining might be that more folks are open to the idea that these institutions, and the human beings who make up financial markets or housing markets, might not be neutral. These institutions and actors have their own biases. They have their own ideas about what’s risky and what’s valuable.
If folks can understand the redlining story, they might be more open to thinking about other instances in which different forms of housing policies can also perpetuate inequalities.
This article was commissioned by N. D. B. Connolly and Stuart Schrader. 
