If Robert York was ever bone tired, he didn’t show it.
After working two jobs, the father of 11 would return home to his North Lawndale two-flat greystone on Chicago’s West Side and hose down the chalk marks his kids made while playing on the porch.
The home was his prized possession. This was the early 1960s, and like most Black people in the neighborhood who were land contract buyers, York was paying dearly for it – and living in constant fear of losing his home.
Land contract buyers were on the hook for a down payment, high monthly payments and maintenance of the house while the deed remained in the seller’s name until the very last payment was made. A single missed payment was grounds for eviction.
Many working-class Black families in the 1950s and ’60s were forced to turn to speculative sellers after the federal government refused to insure mortgages in redlined African American neighborhoods.
Speculators often bought homes at a discount from white families as they fled racially changing neighborhoods to sell them months later to Black families at inflated prices and high interest rates.
Chicago played a central role in shaping federal policy in the 1930s, which contributed to redlining, says Bruce Orenstein, artist in residence at Duke University’s Samuel DuBois Cook Center on Social Equity.
“The restrictive covenant template was developed here and was then exported around the country,” says Orenstein, who is working on a series about the history of housing segregation in Chicago.
Nathan MacChesney of the Chicago Plan Commission created the covenant in 1927 to make sure real estate agents didn’t sell homes in white neighborhoods to Black buyers, Orenstein said.
From 1950-1970, Chicago’s Black community lost $3.2 billion to $4 billion because of racist policies and predatory housing contracts, according to a Duke University report in 2019 led by Orenstein.
The report, “The Plunder of Black Wealth in Chicago,” calculated that African Americans purchasing on contract paid, on average, $587 more each month (in April 2019 dollars) than they would have had they paid the fair price for their home and had a conventional or FHA- backed mortgage. The report found that, on average, sellers marked up the cost of contract homes by 84%.
Orenstein says knowing this history is foundational to understanding how to remedy the damage done by a greater part of a century of racialized housing policy.
Based on the Yorks’ contract information, Amber Hendley, one of the researchers on the report, created a Race Tax Model (buyer’s payment minus seller’s payment) for USA TODAY to show the premium paid by the Yorks, calculated using the price of the home, down payment and interest rates over a 25-year mortgage term, the most common term at the time.
The difference between what the Yorks agreed to pay over 25 years for a home they bought for $23,000 in 1959 and the seller’s purchase price of $15,000 (obtained by the data set collected by the researchers) is $22,150 in 1959 or $157,814 in 2022 inflation-adjusted dollars.