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Family Properties

How the struggle over race and real estate transformed Chicago and urban America

by Beryl Satter

Book Summary by Brian T. Murphy

Satter’s work summarizes the creation of a dual housing market for blacks and whites, which prevented home ownership, caused severe neighborhood overcrowding, diminished educational resources, and broke up the family unit through economic exploitation (overworking) in Chicago’s segregated neighborhoods on the heels of Jim Crow. This resulted in a financial plundering of both wealth and upward mobility that targeted Chicago’s Black community and was representative of policies enacted nationwide. When the white American middle class was being built and financed by the government, Black America was being selectively excluded.    

Major concepts.


  • “In Chicago, as across the nation, most banks and savings and loans refused to make mortgage loans to African-Americans, in part because of the policies of the Federal housing administration (FHA), which “redlined” – that is, refused to insure mortgages – in neighborhoods that contained more than a smattering of black residents…Their only option was to buy “on contract,” that is, more or less on the installment plan. Under the terms of most installments land contracts, the seller could repossess the house as easily as a used car salesman repossessed a delinquent automobile. With even one missed payment, a contract seller had the right to evict the “homeowner” and resell the building to another customer. If the contract seller happened to be a speculator who charged a wildly inflated price for the building, then a missed payment– and subsequent quick eviction and resale for profit– was practically guaranteed…By the 1950s, contract selling was common in many American cities where black populations had skyrocketed as a result of post–World War II migration from the South.  In Chicago, my father estimated that 85% of the properties purchased by blacks were sold on contract. He calculated that by selling buildings to housing-starved African-Americans on such exploitative terms, speculators were robbing Chicago’s black population of $1 million a day. These sales stripped black migrants of their savings during the very years when whites of similar class background were getting an immense economic boost through FHA-backed mortgages that enabled them to purchase new homes for little money down.” P 4-5

  • “While contract sellers became millionaires, their harsh terms and inflated prices destroyed whole communities. Because black contract buyers knew how easily they could lose their homes, they struggled to make their inflated monthly payments. Husbands and wives both worked double shifts. They neglected basic maintenance. They subdivided their apartments, crammed in extra tenants, and, when possible, charged their tenants hefty rents. Indeed, the genius of this system was that it forced black contract buyers to be their own exploiters. The resulting decline of racially changing areas fed white racism. If black contract buyers saw themselves making heroic sacrifices against impossible odds to keep from falling behind on their payments, this was not how their white neighbors viewed the situation. Whites saw population densities doubling, while garbage collection and other municipal services stayed the same or declined. They saw unsupervised children flooding the neighborhood. They noted that buildings bought by African-Americans rapidly decayed. Small wonder that whites blamed their black neighbors for the chaos they observed.” P 5

  • “This resistance is part of the story, too. In the late 1960s, thousands of black homeowners who had bought their buildings on contracts–many of them residents of my father’s old Lawndale neighborhood –organized the Contract Buyers League (CBL). Their goal was to stop exploitative contract sales, renegotiate their existing contracts, and open new lines of credit to black homebuyers. They picketed realtors and banks. They drew national media attention to the role that the FHA played in the creation of ghettos. Their efforts led to the filing of two massive federal suits aimed at abolishing the nation’s dual housing market and ensuring that in the future “a dollar in the hands of a black man” would have the same purchasing power as “a dollar in the hands of a white man.” In the middle 1970s, Chicago activists drew upon the CBL’s groundwork to create some of the most critically important pieces of urban focused federal legislation passed in the 20th Century –legislation that lead to the investment of billions of dollars in scores of U.S. cities and provided some of the few tools we have for documenting the racial biases and destructive impact of the contemporary subprime mortgage crisis.” P 12-13

  • “Chicago’s realtors were thus instrumental in the creation of a dual housing market both locally and nationally–that is, a “white” market of low prices and expensive neighborhood choices and a “black” market of high prices and extremely limited options. Whites also adopted restrictive covenants to confine black Chicagoans to small sections of the city…Restrictive covenants were introduced in the 1920s. By the 1940s, Chicago led the nation in their use. Racial deed restrictions covered approximately half of the city’s residential neighborhoods. Together, the bombings, “neighborhood improvement associations,” realtors’ sales policies, and restrictive covenants helped to create Chicago’s first all-black ghetto on the city’s South Side.” P 40


Introduction – The story of my father


  • Very effective summary of the book.


Chapter 1. Jewish Lawndale


  • Jews began to leave Lawndale in the early 1950s, either to move out of a neighborhood with blacks or to move to a more upper class neighborhood.

  • The introduction of Moe Forman, who helped build the “biggest individual slum empire in the city’s history.” “By 1973, this small group of men – Berland, Wolfe, Berke, Forman,…Gil Balin – controlled up to two thousand buildings in Lawndale. P 34


Chapter 2. The Noose Around Black Chicago


  • “Between 1940 and 1960 Chicago’s black population skyrocketed, from 277,731 to 812,637. Most newcomers to Chicago could find accommodations only in the two neighborhoods that were open to African Americans. Many went to the South Side’s Black Belt…The other area was a small section of the West Side’s former ‘Jew Town’.” P 36

  • “In short, while white “ethnics” like my parents were free to live anywhere in the city that their income allowed, most black Chicagoans of all income levels were confined by an interlocking set of forces to the most overcrowded and run-down sections of the city.” P 37

  • “Chicago had pioneered methods of black containment that would be copied nationally and that turned it, not coincidentally, into the nation’s most segregated city by 1957.” P 39

  • On redlining: “If a neighborhood had black residents it was marked as D, or red, no matter what their social class or how small a percentage of the population they made up. These neighborhoods’ properties were appraised as worthless or likely to decline in value. In short, D areas were “redlined,” or marked as locations in which no loans should be made for either purchasing or upgrading properties.” P 42

  • “The FHA did not simply recommend the use of restrictive covenants but often insisted upon them as a condition for granting mortgage insurance.” P 42

  • “In 1959…out of 243 savings and loan institutions in Cook County (only two of which were black owned), only twenty-one were willing to make loans to blacks wishing to purchase homes within black neighborhoods. Blacks hoping to move to white areas faced even more daunting obstacles. Out of the 241 white-operated savings and loans in Cook County, only one was willing to grant a mortgage loan to a black family moving to a white neighborhood.” P 44-45

  • Satter describes the government’s use of eminent domain to demolish a black neighborhood in order to construct middle-class housing units called “Lake Meadows”. Similar plunder happened at the University of Chicago in Hyde Park, this time with the assistance of federal funds. This was a clear example of government financed racial plunder. P 48-51

  • The book continuously describes enforcing housing codes as a means to upkeep tenant properties and save blacks properties from becoming slums. From the book Boss, Mayor Daley consistently “fights” for this. “The code also increased housing pressure on black Chicagoans for another reason–it’s expedition of urban renewal. Despite its humanitarian trappings, the housing code’s true purpose was to get federal urban renewal dollars for Chicago. And in Chicago, more money for urban renewal usually meant further demolition of black neighborhoods.” Unfortunately, the public, sometimes supported by the media and Mayor’s office, lobbied to enforce housing codes rather than solve the actual problem that caused the racial disparity – the inability of Black Americans to purchase outside of ghettos. P 52

  • “ ‘… a white man may live in the suburbs in a home of his own for only $500 down, but a Negro may not have his own home’ in the city ‘for even $5000 down.’ ” P 62


Chapter 3. Justice in Chicago


  • The effect of overcrowded neighborhoods on schools was devastating, and it’s long-term impact must be recognized: “In 1960, when Chicago’s average population ratio was 17,000 people per square mile, the ratio in Lawndale was 29,000 people per square mile. Lawndale’s schools suffered especially. Between 1951 in 1965, school enrollment increased 286 percent. Bryant school…enrollment soared from 1,546 students in 1954 to 3,218 and 1957. In 1955, Lawndale was approximately a hundred classrooms short of what its youth population required. The city responded to the shortage of classrooms by placing students on “double shifts,” with half of the students attending an early shift and half a later one. Double shift schools denied Lawndale’s children more than a basic education; the truncated school day also meant that many went without adult supervision.” P 94

  • “Left to fend for themselves, Lawndale’s black teenagers gravitated toward gangs, which provided some structure–and unleashed violence.” Chicago’s gang violence on the South and West Sides is not “culture”, it is an engineered disparity. P 95


Chapter 4. Reform – Illinois Style


  • The practice of taking money from people’s paychecks was rampant: “In Illinois, creditors were allowed to lay claim to over a quarter of their debtors paycheck–a stark contrast to the laws of New York, which allowed only 10% of weekly wages to be subject to garnishment.” Since this was a burden on the employer, employees were often fired when this happened. Many blacks were tricked into signing wage garnishment documents under the guise of joining a club while buying a simple item such as a refrigerator. Plunder. P 101-103


Chapter 5. The Liberal Movement and the Death of a Radical


  • Highlighting more misguided attempts to solve the ‘black situation’ in South and West Chicago:  “It overlooked the fact that as long as credit redlining continued, open occupancy legislation could have no real effect on African Americans’ ability to escape deteriorating black neighborhoods. The main reason that African Americans bought from speculative contract sellers or rented from slumlords was not that bigoted real estate brokers refused to show them homes in white neighborhoods but that they could not get mortgage loans to purchase homes in those areas, no matter what their credit history. The emphasis on code enforcement, urban renewal, and open occupancy was in many ways a smoke screen promoted by redlining bankers and mortgage brokers–and one that, not coincidentally, entirely elided their own contributions to the creation of the city’s slums.” P 136, 138


Chapter 6. King in Chicago


  • In general, much of this chapter deals with peaceful black protests being met by atrocious white violence, often ending in the peaceful protesters being arrested and no charges for the white violent offenders. “I have never seen such hostility and hatred anywhere in my life, even in Selma” said King. P 201

  • “By this time [1965] Lawndale was in a state of advanced decay: 80 percent of its housing stock  had been constructed before 1900, and 40 percent was substandard. The overcrowding in some sections reached three hundred people per acre. Lawndale was also now part of a continuous stretch of slums that extended for one mile north and two miles east of its boundaries, encompassing the East Garfield Park, West Garfield Park, and Near West Side neighborhoods. This larger area, known as ‘the West Side,’…was home to 300,000 African Americans, the majority Southern-born.” P 170

  • “Between 10 and 25 percent of the adult population was unemployed. For young people, the statistics were far worse: 25 to 50 percent were unable to find jobs. P 170

  • King chose Chicago as the site of his “northern campaign.” He led the Southern Christian Leadership Conference. He and Saul Alinsky debated on the methods to be used to achieve change in the north, and in the end Alinsky might have been right. P 173

  • Satter speaks of trying to solve the lack of educational resources in black neighborhoods by bussing students to other schools. Of course, huge white protest prevented this and it never really happened (by 1964 28 black students were transferred…this was insignificant since the population of these neighborhoods was over 300,000). P 178

  • US Federal Commissioner tried to deny Chicago federal money ($32 million) for not integrating their schools. Mayor Daley met with President Johnson, and convinced him that the Chicago Board of Education (CBE) should investigate itself and report back, as opposed to using independent Federal investigators. The CBE found no fault. “In short, it took Daley less than a week to destroy one of the most important test cases of how Federal power could be used to bring urban school systems into compliance with Brown v. Board of Education. And as the CCCO had warned, the repercussions were national. Chicago pioneered a way for all states, Northern or Southern, to resist school integration.” P 179

  • King and his wife rented an apartment in Lawndale (Hamlin Ave). King miscalculated Mayor Daley in that he expected things to play out like it was the South – either embrace overt racism or become the white hero. But Daley was a politician and knew better. Saul Alinsky warned King against this strategy, and it ultimately failed. P 187

  • Stokely Carmichael coined “black power” while being arrested, and this served to highlight resistance to King’s non-violence movement. “The term ‘black power’ would become a blanket phrase to advocate everything from guerilla warfare to voter registration to small-business self-help strategies. At the time, however, it was understood as a challenge to King’s philosophy of nonviolence.” P 189

  • Riots were happening in Chicago for unrelated reasons to King, but Mayor Daley was quick to blame the riots on “outsiders” like King’s movement. King would meet Daley, make a demand, and Daley would sometimes meet it (if it was a win for him, like lack of access to water in a neighborhood). Daley would then publicize the negotiation and get credit for ‘doing something.’ P 196 describes Daley’s strategy:  “Promise them anything so long as they stop the marches; later we can figure out ways to circumvent the granting of their demands.” P 204

  • Around 1966, King eventually smartened up and began holding peaceful marches in suburbs as opposed to downtown. Suburbs would give King the TV images that he wanted. This actually made Daley nervous. P 201-204

  • Several pages deal with meetings between King and Daley, with many solutions being proposed, but importantly all non-binding. Summary: much talk, no action, which was exactly what Mayor Daley wanted: the perception of change. 

  • Satter discusses more Cicero marches, and how the press would turn an angry white mob who sought to disrupt the marches into the victim. Even back then, blacks were rioters and whites were protesters. P 211

  • Satter addresses different strategies to fight injustice: “The SCLC had long based its activism on community mobilizing – that is, the organization of large-scale, somewhat short-term public events designed to demonstrate the existence of an injustice that authorities would then be pressured to correct. This was in sharp contrast to the community organizing methods embraced by other activist organizations, from Chicago’s Woodlawn Organization and Westside Organization to the Southern-based Student Nonviolent Coordinating Committee (SNCC), which believed that change happened not simply through turning out large numbers of people to make demands but rather through developing the leadership abilities of ordinary people, who would then take charge of local struggles against targets that they themselves determined.” P 213

  • “To be successful, however, a movement had to grow from the desires of those it claimed to represent. When SCLC organizes chose their central issue based on the advice of liberal housing experts rather than on the wishes of West Siders, they doomed their movement.” P 214

Chapter 8. Organizing Lawndale


  • Satter introduces Monsignor John J. Egan (transformed his church into hub of community life) and Cardinal John Cody (opposed “activist” Priests). Egan set to train community organizers, dividing Lawndale into parishes of one block each. The goal: to transform the block into a community. He instructed leaders to get to know all inhabitants. One of the leaders that stepped up was Jack Macnamara, a 30 year old Jesuit from Skokie.

  • Surprisingly, most residents did not openly discuss that they bought on contract. It was only until some came out at community forums that others followed. This built a community. Macnamara arranged a presentation by a few contract buyers, and this worked to stimulate the community. Important: to be effective, it mustn’t be an outsider speaking.

  • Contract buyers started (in some, albeit few, cases successfully) to show up at owner’s offices and renegotiate contracts to fair prices. They didn’t want a handout, they just wanted a fair deal. They formed the Contract Buyers of Lawndale (CBL; soon to be Contract Buyer’s League) P 244-245

  • “By April 1968, 500 Lawndale residents regularly attended the group’s Wednesday night meetings. By November, participation had grown to over 1,000.” Leading these efforts was Wells, Clyde Ross, Henrietta Banks, among others. P 247

  • All CBL leaders were typical victims. They empowered people by talking about how they got swindled. They weren’t shamed about their mistake; they turned it into an advantage. P 251

  • “Throughout 1968, Ross, Baker, Banks, Wells, and McNamara drew more and more Lawndale residents into the CBL. Determines to pressure the sellers into renegotiations, the organizers first grouped CBL members by contract seller. Members with then picket their contract seller, both at work and at home. Since many sellers hid their identity behind land trusts, the CBL also picketed the banks that held these trusts, demanding that the banks either force the trust owners to renegotiate their contracts at a fair, FHA-appraised value or turn over the owners names. The organization also picketed the Chicago offices of the Federal Housing Administration, although by this point the FHA had changed its policies regarding areas like Lawndale. In July 1967, in part as a response to the urban riots that broke out between 1964 and 1967, the FHA directed its local offices to consider all buildings in ‘riot or riot torn areas’ as ‘acceptable’.” P 252-253

  • “By now, most contract sellers in Lawndale have softened their original harsh terms.” After being exposed, this changed the market and it was more difficult to find clients. “Given the situation, most contract sellers no longer evicted after a missed payment or two. Indeed, approximately 60 percent of Lawndale’s contract buyers now retained possession of their buildings even if they were up to six months behind in their payments.” P 254


Chapter 9. The Big Holdout


  • “The CBL was able to block these evictions because it had advance notice of where they would occur…Staffers would wait for a phone call from “friends” inside the sheriff’s office, who would tip them off about the location of the day’s evictions. This would activate a highly effective phone tree, which alerted members early in the morning that an eviction was to happen…at a given address. In this way hundreds of supporters were able to arrive at eviction sites at about the same time as the sheriff’s deputies.” P 304

  • South Siders were beginning to join the CBL, hence the name change to Contract Buyers League. They started a payment boycott that led to a long legal battle (that involved nearly 600 of the greater than 2,000 families in the CBL). Evictions began, but protesters would immediately swarm the house of the evicted and prevent the Sheriff’s Office from doing their job. They had little motivation to fight these crowds, and there was politics: Daley was democrat and controlled the police while a Republican controlled the Sheriff’s Office. Daley didn’t mind having them do the dirty work. “Meanwhile the Chicago Daily News tallied the cost of the evictions thus far: $300,000 to the sheriff’s office, $123,000 to the Chicago police. Total cost to the city and to the state of Illinois: over $500,000.” P 309

  • Satter summarizes the CBL victories: 1) “it challenged the legality of Illinois’s eviction law–and won”, eventually winning in a 1972 Illinois Supreme Court case; 2) “… the payment strike did push a number of contract sellers, particularly on the West Side, to renegotiate. Before the big holdout, a whole year of activism– 1968 –resulted in fewer than a dozen renegotiated contracts. By June 1, 1970, the number of West Side contracts renegotiated had risen to seventy. By the end of 1970, 106 contracts had been renegotiated, at an average savings of $14,000 per family.”; 3) “Finally and perhaps most significantly, the strike led to the addition of the Federal Housing Administration (FHA) as a defendant in the West Side suit.” P 312-314

  • “While many contract buyers benefited by joining the CBL, some did not. Approximately 70 CBL families…permanently lost their homes.” P 314-315

  • Satter discusses how the upper divisions of the Catholic Church tried to squash the lower divisions, who were working with Black communities to stand up for human rights. P 317


Chapter 10. The Federal Trials


  • Satter discusses the Clark v. Universal federal suit. “The lawyers would charge Universal and the West Side sellers not with creating a discriminatory situation but with exploiting a pre-existing condition of racial discrimination for financial gain.” Satter goes on to describe the team: “The information gathering that CBL attorneys depended upon was largely carried out by a staff of approximately twenty college students who donated their time.” CBLs days in court were supported by a cadre of ~ 20 students who donated their time gathering data. Given these lawsuits eventually led to changing policy on a national level, you should never say that it’s impossible to make a difference. These were only 20 students. P 321-323

  • In short, the Judge in the major CBL suit wouldn’t allow much incriminating testimony from economists, etc that proved there was clearly a dual housing market. Despite reality, the judge stated that the defendants “… ever refused to a white person or a black person… any house, or refused to sell one or the other at a higher or lower price, absolutely no positive evidence of discrimination in this record”. The case was dismissed, exonerating Universal Builders. P 326

  • Clyde Ross on the ruling: “I knew from the beginning…that we’d have trouble, because Judge Perry kept telling us how fair and unprejudiced he is,” he told reporters. “You know what that usually means.” P 327

  • “By the early 1970s, Chicago’s Lawndale community was experiencing something that would make a little sense in an ordinary market –a severe housing shortage coupled with a rush by many property owners to dump their deeds for almost any price. The housing shortage was a direct result of the exploitative practices of the cities contract sellers, whose repeated sale of already run-down properties had left buildings so decayed that the city was forced to demolish them. Of the several hundred West Side properties owned by Lou Fushanis at the time of his death in 1963, for example, almost 70 percent were torn down by the city as uninhabitable by 1970. In 1960, the city had condemned a total of 143 slum buildings. In 1968, it demolished 10 times that number, 1,421, displacing 3,630 families…In 1972, the city pulled down 1,682 buildings…” P 329-330

  • Even after everything described, all the court cases, protests, deaths, public funds spent, in the 1970s these discriminatory lending practices were continuing (Austin neighborhood). “In the early 1970s, these men sometimes continued to make money the way they always had–by buying buildings cheap, mortgaging them with savings and loan companies for as much as or more than they’re worth, and then selling them on contract. Profiteering around racial change followed a traditional pattern. As the number of black residents increased in Austin, a Chicago neighborhood west of Lawndale, savings and loan institutions redlined the area.” P 330-331

  • The downside of tenants finally getting approved mortgages: it let corrupt slum lords off the hook for repairs they should have done, and now shifted the cost of repair to the new owners. P 332

  •  In case you didn’t think it was possible for slum owners to be any more diabolical, several pages detail owners who would set their slums on fire to collect fire insurance. People often still lived in the buildings. Several deaths resulted, all for a small profit. P 335-337

  • “ Then in 1972, a real estate scandal of national magnitude gave additional confirmation of the abuses pervading the housing market. Involving the newly merged FHA and HUD, it was so massive in scope that it made the doings of Chicago slum landlords look picayune. The scandal involved the abandonment and ruin of over 240,000 units of housing nationwide –enough to house over one million people. In Detroit alone, more than 25,000 houses had been abandoned–about 10% of the city’s housing stock. The cost to the US government was estimated at close to $4 billion, in preinflationary, early 1970s money. James M. Alter, chair of the Governor’s Commission on Mortgage Practices, commented, “Outside of Watergate and Viet Nam, there is no greater scandal than in FHA and HUD housing. The cities are rotting and nobody seems to be responsible.” “The section 223(e) program should have been a godsend to American cities… some contract sellers took advantage of newly available FHA guaranteed mortgages to “settle” with contract buyers and get the full, grossly inflated price–or something close to it–for their properties. Section 223(e)  also became the linchpin of an entirely new scheme of exploitation. Much like the contract-sale scenario, this new scheme enabled speculators to buy low from whites and sell, at a triple to quadruple markup, to blacks.” p 338-339

  •  In short, contract sellers learned how to milk the system and exploit Black America…again. They especially made a profit when the mortgages defaulted. Sellers once again infiltrated white neighborhoods, pressured them to sell low under the racist/not racist guise of “this is an FHA area”, meaning, ‘the blacks are coming’. This phenomenon was happening in cities all around the country and importantly, was not an isolated incident.  P 340-341

  • “In Chicago, the FHA paid out at least $42 million to real estate speculators and corrupt mortgage firms. In Brooklyn, such  operators received $250 million from the FHA. In Detroit, which was hardest hit by the scandal, FHA insurance payments amounted to a shocking $375 to $500 million.” P 343

  • “By 1975, Justice Department investigations into “allegations of collusion, kickbacks, bribery and falsification on federal statements of a building’s worth” had led to charges against 752 defendants and the conviction of almost 500 people. There were ongoing investigations and seventeen cities.” P 343

  • In short, “blue books” were found that strongly implicated the FHA in discriminatory practices. The FHA was never charged with any discrimination – for anything – because the judge didn’t allow it on account of some inane statute of limitations…it was too late to accuse them. “All six defendants were acquitted.” Then Universal Builders was exonerated. CBL lost both its Federal suits. P 350, 367, 368

  • The silver lining: Inspired by the CBL losses, an Austin resident (Gale Cincotta) helped create National People’s Action (NPA) a national grassroots organization aimed at tackling housing issues. They started by targeting redlining using most of the data collected from the CBL cases. They worked with a Democratic Senator from Wisconsin (William Proxmire) to pass two “landmark pieces of federal legislation: the Home Mortgage Disclosure Act (1975) and the Community Reinvestment Act (1977).” These are considered “the crowning achievement” of struggles born out of Chicago from the 1950s. “By 1992, community groups had used the two acts to pressure financial institutions into $18 billion worth of reinvestments in over seventy US cities. By 2004, the amount of money reinvested in local communities because of the laws came to approximately $1.5 trillion–almost half in affordable housing.” P 370-371

  • “In the end, the CBL story is one of triumph in the midst of loss. Even as their research was barred from the West Side trial, the information that CBL members and supporters gathered with such painstaking effort provided ammunition for underdogs engaged in an even more lopsided battle–one pitching Chicago community organizations against the nation’s banking industry. And this time the underdogs won.” P 371




  • “Like contract sellers, subprime lenders pushed people to take on more debt than they could handle. While contract sellers got away with inflated prices because bank redlining left their customers with few alternatives, subprime lenders got borrowers to overmortgage themselves by convincing them that prices would only continue to rise–and by working with hand-picked property appraisers. Whether the borrower had the economic wherewithal to carry the loan was of little concern to subprime lenders, since the mortgage “paper” was quickly sold to Wall Street investment banks, who pooled large numbers of mortgages, categorized them by levels of risk, and then used them as security for bonds sold to investors. Companies also garnered income from the “service fees” that they charged on subprime mortgages, which could amount to as high as 15% of the loan’s value.” The Big Short. P 373

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