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How A Predatory Real Estate Practice Changed The Face Of Compton

AILSA CHANG, HOST:

As part of our series on American democracy called We Hold These Truths, we've been looking at property ownership in this country and the structural forces that have held back Black homebuyers. For most Americans, the key to building intergenerational wealth is to own a home. But the real estate market often values homes in majority-Black neighborhoods much less than comparable homes in white neighborhoods, robbing Black families of wealth and opportunities like financing a college education. We're going to show you the forces responsible for this by visiting Compton in the 1960s. It's a city just south of downtown LA that was in the midst of transforming from all white to majority Black. Here's producer Jonaki Mehta.

JONAKI MEHTA, BYLINE: There's this day that's been imprinted on Robert Johnson's mind for the past 60 years.

ROBERT JOHNSON: And I'm looking down the street. I see moving vans, trucks and everything, all down the street.

MEHTA: It's 1961 - moving day. Johnson is just 5 years old, and he realizes his family isn't the only one moving into Compton that exact same day. For blocks and blocks, he sees people moving into houses.

JOHNSON: And so I thought it was moving day for everybody - everybody just switch houses (laughter). You know, you're a kid, you know?

CHANG: Another thing he noticed - everyone moving in that day was Black, just like his own family. His new next-door neighbor noticed the same thing.

JUANITA SANCHEZ: There lived a white person with a son.

CHANG: Juanita Sanchez (ph) has lived on this block since the late 1950s. And she says back when she first moved to Compton, almost everyone on her block was white.

SANCHEZ: And then over here was a white family with kids and all (ph). But then...

CHANG: But then she says most of those white families on this block started leaving.

MEHTA: It happened very quickly...

SANCHEZ: Yeah.

MEHTA: ...The white people seemed to have left very quickly?

SANCHEZ: Uh-huh.

MEHTA: How quickly?

SANCHEZ: Say, two, three years, everybody was gone.

MEHTA: And then who replaced them?

SANCHEZ: Black people.

MEHTA: Why do you think white families moved away?

SANCHEZ: I don't know. They got scared.

CHANG: This perception, that the arrival of Black residents was reason to be scared, this is one of the most powerful forces impeding generations of Black Americans from building wealth through homeownership. You see, perceptions, including racist perceptions, shape the real estate market. Oftentimes, when a neighborhood turns white, property values go up. And when a neighborhood turns Black, property values go down.

MEHTA: This American reality played out starkly in Compton, a city that went from being almost exclusively white to majority Black. And one major mechanism that drove the shift was a predatory real estate practice called blockbusting.

CHANG: Johnson would come to understand only years later how his family, like so many other Black families at the time, were unknowing targets in a scheme that helped a lot of real estate agents make a lot of money.

JOHNSON: So they would approach the white homeowners and basically scare them - the Negroes are coming. Look here, you know, you're going to want to sell your home. And what they were doing was they were panic selling.

MEHTA: That is how blockbusting worked. Real estate agents would tell these white homeowners that their houses were losing value by the day, so the homeowners would panic and sell.

CHANG: Then, those agents would turn around and sell those homes at inflated prices to Black buyers who were eager to make a start in better neighborhoods. And all along, state regulators condoned this practice.

KITTY FELDE: So I remember this flyer that was stuck under the door. And it was from a real estate company.

MEHTA: That's Kitty Felde, who's white. She was in elementary school in Compton during the 1960s when that flyer arrived.

FELDE: They had one very clear message, and it was, sell now because you're never going to be able to get the money you want for your house. And they didn't say this. But it was like, they are moving in - they.

MEHTA: They?

FELDE: It was extremely clear that it meant African Americans. And you know, my folks were really upset. They were like, we are not leaving because quote-unquote, "they" are moving in here. It was a matter of principle. It was a reflection of their religious beliefs, of their social justice beliefs. They weren't going to do it.

MEHTA: So her parents stayed put. But droves of other white residents abandoned Compton during these years, and Black families like Robert Johnson's moved in.

JOHNSON: Oh, man, it felt like, not just a step up but a step into another world. It was your typical suburban dream.

CHANG: To Johnson back then, Compton felt utterly removed from his previous life at Nickerson Gardens, the public housing complex in LA where his family used to live. Compton meant his mother, an X-ray technician, and stepfather, an aerospace engineer, could finally buy something of their own.

JOHNSON: In the backyard, we had an orange tree, a persimmon tree. I didn't know what a persimmon was.

MEHTA: (Laughter).

JOHNSON: Well, I learned over the years 'cause I had to clean them up when they fell off the tree - same thing with loquats. I didn't know what a loquat was till I got to Compton.

CHANG: Johnson remembers an idyllic childhood during those first years in Compton, when kids had all kinds of after-school activities. He reminisces about his swim lessons right here in Wilson Park.

MEHTA: Where was the pool?

JOHNSON: Right here where the skate park is now.

CHANG: Johnson says this park used to be fully staffed with adults who would supervise the kids while they played ball games.

JOHNSON: And our parents were involved. You know, your father was out there being the coach. The mothers were out there supporting the team, selling hot dogs and stuff like that.

MEHTA: Albert Camarillo, who also grew up in Compton, is now a professor of history at Stanford University.

ALBERT CAMARILLO: Compton becomes the promised land. If you worked hard, you have the money to be able to move into Compton.

MEHTA: He says industrial jobs further attracted Black residents to Compton.

CAMARILLO: The housing stock was relatively new - three-bedroom, two-bath, suburban tract homes. The streets were paved and the schools - the schools were pretty good.

MEHTA: But while Compton represented social mobility for so many Black Americans, it also came to represent their exploitation. Predatory practices like blockbusting forced families to overpay for homes that would eventually decline in value as more Black residents arrived.

CHANG: Take Johnson's house, for example. According to census data, the median home price in Compton in 1960 was only $12,800. Johnson's family paid $17,500, and their home was smaller than most in the area. Josh Sides, a professor at California State University, Northridge, says those numbers strongly suggest that Johnson's family was the target of blockbusting. And after more Black residents moved in, home prices in Compton languished over the next several generations.

JOSH SIDES: The really evil part of blockbusting, in my view, is that it perpetuated the notion that Black people in your neighborhood diminished value. And because of that perception, it became a self-fulfilling prophecy. That is, it became true that a Black person moving to your neighborhood meant your value declined because, of course, property values are largely the function of social decision and social beliefs.

MEHTA: In 1950, one-fifth of 1% of Compton's entire population was non-white. Just 10 years later, the city was 40% Black. And when white people fled Compton, white-owned businesses did too, which was a blow to the city's tax base. And city services suffered.

SIDES: As those white business owners move out, there's no way to recover from that because part of the challenge of a small, independent city like Compton was that it was so thoroughly reliant on the tax base, not only of its property owners but also of the business owners.

CHANG: Not only did that tax base disappear, so did steady manufacturing jobs in South LA. And as unemployment in Compton worsened, Johnson remembers neighbors started having trouble making their home loan payments.

JOHNSON: You know, the first time I really noticed it personally was at school because you're sitting in class, and your classmates are gone. They had moved away. And that was my first indication that something was going on. I mean...

MEHTA: He also noticed that Wilson Park, where he had all those swim lessons, it no longer had the funds to hire adult supervisors to watch the kids there. Meanwhile, tensions between police and residents ramped up as the crack epidemic took hold in Compton in the 1980s.

JOHNSON: People in Compton were put in a very bad position. The legitimate jobs were gone. And then comes this - it was more than a drug. It was almost like a demonic spirit.

CHANG: All of these factors - escalating crime, police violence, a lower tax base and rising unemployment - all of that changed the face of Johnson's neighborhood. He recalls the exact moment when he finally resolved to leave the city he had lived in for almost three decades.

JOHNSON: One day, I'm sitting in front of my house washing my car, and some fool from a block away had got a new rifle, and he starts shooting out the streetlights. And I knew that if something had happened to my son, I knew how I would react. So, you know, I raised my son elsewhere.

MEHTA: When Johnson's family left in 1988, they sold their home for $64,000. It was worth less than what they paid in 1961. If you adjust for inflation, that house lost almost 8% of its value over 27 years.

CHANG: But even though Johnson left Compton, Compton never really left him. He's written a book about the city's history. He's a founding member of the city's historical society. And you can see his face brighten instantly when he spots an old neighbor.

JOHNSON: Mr. Scott (ph). How are you? How's your mom doing? Yeah.

MEHTA: People like Robert Johnson left Compton for a better life, but they lost something along the way. Tomorrow we're going to hear about that from Billy Ross.

BILLY ROSS: And you go elsewhere looking to carve out some economic security. But culturally, now you are diluted. And that was a part of what I called Black flight, you know?

CHANG: We'll follow the flight out of Compton into California's Inland Empire, a region that promised opportunity for Black families but at an unexpected price.

(SOUNDBITE OF COMPTON'S MOST WANTED'S "THIS IS COMPTON") Transcript provided by NPR, Copyright NPR.

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