Buyer Beware

A history of redlining and racism in Chicago

Family Properties: Race, Real Estate, and the Exploitation of Black America | By Beryl Satter | Metropolitan Books | 512 pages, $30

Every now and then, the zeitgeist smiles down upon a writer and makes the subject she’s been toiling over for a decade a hot topic at the time of publication. Such is the case with Beryl Satter’s Family Properties: Race, Real Estate, and the Exploitation of Black America. Through the lens of history, Satter sheds crucial light on both the current subprime-mortgage crisis and the importance of community organizing in Chicago. If anyone still questions the significance of such organizing in the inner city, she should read Family Properties for a lesson in just how hard a job it is.

The narrative—and the author’s inspiration—begins at home. “ ‘If there’s no limit to how much a man can make, and it doesn’t matter how he makes it, God help us,’ ” Satter’s grandfather, Isaac, used to say. But it was her father, Mark Satter, who put this philosophy into action by representing disenfranchised African Americans in Chicago.

The son of a Russian-Jewish immigrant, Mark Satter was born in 1916 and raised in the Lawndale section of Chicago. His father lost his small business during the Great Depression and struggled the rest of his life to support his large family. This, the author suggests, explains Mark’s desire to succeed. She traces his compassion for the underdog to a childhood injury.

In the late 1950s and early 1960s, Mark Satter would make a name for himself as the “Clarence Darrow of the Bankrupt”—not only by representing African Americans in court, but by speaking out publicly against racial discrimination. The causes he championed involved such economic scams as wage garnishing and the credit racket, which formed a kind of vicious circle. First, crooked merchants would sell items on credit at inflated prices and with stratospheric interest rates. When customers failed to make a payment, their wages were garnished. Under Illinois law, creditors could take more than a quarter of a person’s salary. In some cases, employers would fire employees rather than deal with the accounting headaches—which often led straight to “living on the dole.”

Mark Satter’s main cause, however, was the redlining and contract sales perpetrated by bankers and real-estate agents. While white Chicagoans had little difficulty obtaining mortgage loans in the neighborhoods of their choice, black residents were confined to ghettos and denied mortgages. Their neighborhoods were marked on maps in red ink by appraisers—hence the term “redlining.” Unable to secure federally insured mortgages, those African Americans who wished to purchase their own homes were forced to buy from unscrupulous contract sellers. The properties, sold at markups of 70 percent or more, had to be purchased in installments. If a single payment was missed, the family was evicted; the house was marked up again and resold to another unsuspecting black family. Contract sellers made a fortune, while scores of families wound up homeless.

Their immoral behavior, and the government’s support of it through the Federal Housing Administration, would spawn slums, large-scale poverty, blight, and eventually, riots. So argued Mark Satter, in and out of the courtroom.

The author follows several of her father’s legal cases in detail, bringing to life not only the poor families involved, but also the predatory contract sellers, whose greed she seeks to explain without ever rationalizing it. She also acknowledges what were often partial or pyrrhic victories. Though Mark Satter was successful in settling some of his cases, the ones he brought to trial were almost all defeated by what he saw as a corrupt, racist judicial system. Time and time again, just as reform seemed to be around the corner, Satter and his clients were dealt another crushing defeat.

Battered down by those defeats, nearly bankrupted by his charitable work, Satter was unable to keep up his Lawndale properties—which, ironically, turned into slums. He was also alienated from his fellow lawyers, and died a broken man at the age of forty-nine.

But for Beryl Satter, the story was just beginning. A month after her father’s death in 1965, a full-scale riot broke out in Lawndale. And the following month, Martin Luther King Jr. announced that his Southern Christian Leadership Conference would make Chicago the focus of its “Northern campaign.” King chose an apartment in a slum building in the city’s worst neighborhood—Lawndale—to spotlight the housing conditions there. Here were the broken-down structures with smashed windows that slumlords failed to fix, the rats patrolling the hallways, with what King described as “mounds of rubble instead of yards.”

In painstaking detail, Satter traces King’s fight with the powers-that-be in Chicago, namely Mayor Richard Daley and his Democratic machine. The issue was still open occupancy—the right of black families to live anywhere in the city. What King found was that Chicago’s segregation was nearly absolute and the battle against it much harder than his sclc had anticipated. Some even spoke about “going back to the relative tranquility of being a civil-rights worker in Alabama.”

Satter follows King and his organizers on their historic march through Cicero, a white Chicago suburb completely off limits to blacks. Earlier that year, in May 1966, a black teenager applying for a job in Cicero was killed by four white teens, who beat him so violently that his eyes were knocked out of his skull. Not surprisingly, Daley and his machine tried to dissuade King from marching there, calling it a suicide mission. King replied: “We’re not only going to walk in Cicero, we’re going to work and live there, too.”

The march went forward as planned, on Labor Day weekend. Braving a hail of rocks and bottles, King and his marchers worked their way through the neighborhood, protected by two thousand National Guardsmen and a thousand police officers. It was a victory, but arguably a partial one, and King pulled out of Chicago that fall.

Yet King’s fight—and the battle that Mark Satter had waged before him—was picked up by other local community organizers. Satter introduces us to them one by one. Walking among them is Saul Alinsky, the father of Chicago community organizing; Monsignor John J. Egan, who worked tirelessly for the poor and helped to train and inspire a cadre of young, dedicated Jesuits; and Ruth Wells, a contract buyer turned activist, who put her own home on the line to protest the unfair housing market in Chicago.

The final quarter of the book is dedicated to the founding of the Contract Buyers of Lawndale (CBL), a close-knit community group that eventually hired a team of lawyers and brought their contract-sale cases to trial. Though Satter never says so, it was a class-action suit her father should have been involved in: a high-profile, emotional showdown between the contract sellers and their prey.
Satter wears the mantle of historian throughout, keeping her emotions in check even when she discusses the members of her own family. It should be noted that when her father died in 1965, the author was only six years old. She has no direct memories of him or of her grandfather. But thanks to one of her brothers, Mark Satter’s legacy was preserved in a dozen large scrapbooks.

These scrapbooks, plus Satter’s interviews with the large cast of characters, are what give Family Properties the density of a good novel. And by means of this exhaustive and exhausting research, the author allows the personalities of the key players to shine. She never backs away from difficult territory, delving into cultural stereotypes of both the African-American and Jewish communities. She also addresses her father’s financial ruin, the slums he left behind, and a conservative, controversial article written by her brother David just after Mark Satter died.

At times, the writing slips into legalese and academic dryness (Satter is the chairman of the history department at Rutgers University in Newark). But the story itself is so politically and emotionally charged that the book becomes a page-turner, as the reader roots for the underdogs.

Mark Satter’s absence during the CBL trials makes the heart ache. But just as in the cases Satter championed, and the fight that King fought in Chicago, the final outcome of the CBL case is heartbreaking. Equally depressing is the fact that many of the local newspapers that covered and championed Satter’s battles are either gone or on the verge of disappearing. The Chicago Daily News, in particular, provided much of the first draft of history from which the author drew her tale. A historian writing fifty years from now may have the Internet, but detailed local coverage of events will be sorely missing.

Beryl Satter’s story is not without a glimmer of hope, however. Some of the CBL’s contracts were renegotiated while the cases wound their way through the courts, saving victims an average of $14,000 and, more importantly, allowing them to keep their homes. And the press coverage during the litigation alerted the African-American community to the contract sellers’ vicious practices.

There are other silver linings, too. The CBL’s raw housing data, which had been gathered meticulously by volunteers and lawyers and entered onto rudimentary computer cards, were ruled inadmissible in court at the time. However, the data have since been used by a new generation of community organizers, allowing them to challenge other discriminatory federal housing policies.

And though his name is never mentioned in the text, just around the historical corner is another Chicago community organizer, the most famous since Martin Luther King Jr. marched through Cicero. It’s ironic that President Obama’s first task in office will not be fighting overt racism, but cleaning up yet another mess that the mortgage industry has left in its wake. (Between 2004 and 2006, the city in America with the most residents holding subprime loans was Chicago.)

In her conclusion, written just before publication, Satter draws direct parallels between the contract sellers of the 1950s and 1960s and the predatory lending practices of the last few years. “ ‘Ghetto lending’ practices of the 1960s have metastasized,” she quotes one legal scholar as saying. “We are all in the ghetto now.” And how will we escape? Before his death, Mark Satter argued that the federal government needed to right its many wrongs by creating “job opportunities for all who would work” through a WPA-like program. It seems to be one argument he may finally win. 

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Helene Stapinski is the author of Five-Finger Discount: A Crooked Family History.