Although the federal government remained an important funder of neighborhood organizations and urban real estate development, activists increasingly realized the role of the private sector, namely banks, was critical to rebuilding American inner cities. But unlike politicians, banks did not naturally answer to neighborhood activists. Two federal laws passed in the 1970s enabled community based organizations to hold financial institutions accountable for neighborhood lending practices: the Home Mortgage Disclosure Act of 1975 (HMDA), which requires banks to disclose where mortgage loans were approved or denied, and the Community Reinvestment Act of 1977 (CRA), which requires financial institutions to meet the needs of communities in which they operate. Bank redlining in particular had accelerated as a result of urban riots in 175 the 1960s. Risk-averse banks and insurance companies avoided lending to areas they considered to be volatile, unstable, or in an advanced state of decline. While public funds and some 176 limited philanthropic dollars were put to use in housing restoration and redevelopment projects, CDCs found that absent private capital, poor neighborhoods would never stabilize. In Pittsburgh in the early 1970s, NHS, which had set the national standard for recruiting bank support for lending to inner city housing, found itself fighting an uphill battle against reluctant lenders and
See the interactive website, “Mapping Inequality,” for more detail on pre-World War II redlining, a legacy of the
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Home Owner’s Loan Corporation, a New Deal agency. Robert K. Nelson, LaDale Winling, Richard Marciano, Nathan Connolly, et al., “Mapping Inequality,” American Panorama, ed. Robert K. Nelson and Edward L. Ayers, accessed September 13, 2017, https://dsl.richmond.edu/panorama/redlining/
#loc=12/40.4338/-79.9430&opacity=0.8&city=pittsburgh-pa. See also, Devin Quinn Rutan, “Legacies of the Residential Security Maps: Measuring the Persistent Effects of Redlining in Pittsburgh,
Pennsylvania” (Undergraduate thesis paper, University of Pittsburgh, 2016). There is also a Pittsburgh HOLC Redlining Map, Map Warper, accessed on January 13, 2019, http://mapwarper.net/maps/8914.
As Metzger writes in his dissertation, “many ‘first generation’ community development corporations were unable
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to prevent the large-scale redlining of their neighborhoods.” John T. Metzger, “Social Capitalism in American Cities: Financial Institutions and Community Development” (PhD diss., Columbia University, 1999), 125.
government bank regulators who saw such investments as unwise. Successful challenges to 177 financial industry practices came from Chicago, which, like Pittsburgh, has a long history of neighborhood organizing.
Citizen advocacy for HMDA and CRA came not from groups most commonly associated with civil rights, such as the NAACP or the Urban League, but from Chicago’s Gale Cincotta, who Greg Squires calls “the mother of community reinvestment.” Cincotta is described as “a plainspoken mother of six who became a neighborhood activist and went on to help ignite the national debate over bank lending policies that discriminated against minority home buyers.” 178 Cincotta and her colleague Shel Trapp, both disciples of Alinsky, were effective organizers. As head of Chicago’s National Training and Information Center (NTIC) and its parent organization, National People’s Action (NPA), Cincotta helped write the HMDA and CRA legislation. The federal disclosure of bank lending data was based on a local law passed by the Chicago City Council in 1974. It was part of a larger movement to enact similar ordinances at the local and state level. Within a year, HMDA became law, with CRA enacted two years later. 179
These two laws, along with the Fair Housing Act of 1968 and the Equal Credit
Opportunity Act of 1974, gave community based organizations new tools not only to challenge bank lending practices, but to forge new partnerships with financial institutions, though much of
Metzger, “Social Capitalism in American Cities” (1999), 128.
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Douglas Martin, “Gale Cincotta, 72, Opponent Of Biased Banking Policies,” New York Times, August 17, 2001,
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accessed September 12, 2017, http://www.nytimes.com/2001/08/17/us/gale-cincotta-72-opponent-of-biased-banking-policies.html. In 1971, the NAACP, Urban League, and nine other civil rights groups sued the four bank regulatory agencies to enforce the 1968 Fair Housing Act. But the main thrust of HMDA and CRA came from neighborhood organizers in Chicago.
The legislative history of HMDA and CRA is detailed in Metzger’s dissertation (1999), 131-156.
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the activism came in the late-1980s and early 1990s (addressed in a subsequent chapter). 180 Credit is often given to Wisconsin Senator William Proxmire’s efforts to shepherd HMDA through to final passage, along with Henry S. Reuss, Proxmire’s Wisconsin colleague in the House, who sponsored the CRA legislation in 1977. The passage of HMDA and CRA
acknowledged that the private sector was the key to community reinvestment, perhaps more than the government’s role. Critical of Johnson’s Great Society, Bradford and Cincotta write that 181 the War on Poverty “tended to replace the private economy of capital investment with a
government economy that was based on direct support for subsistence maintenance. . . . where the only dynamic was the management of the community into eventual abandonment.” The 182 utilization of HMDA and CRA by community based organizations to leverage bank involvement in low-income areas marked a decisive shift away from government as the sole provider of anti-poverty programs to the private sector as an instrumental part of the wealth-building process.
Most of the advocacy around HMDA and CRA, however, occurred a decade later as community based organizations developed the capacity (in the form of computer technology as well as trained researchers) to analyze home mortgage loan data and negotiate lending agreements with banks, all part of the transformation of the community development movement into an industry.
Gregory D. Squires and Chester Hartman, “Occupy Wall Street: A New Wave of Fair Housing Activism?” in
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Chester Hartman and Gregory D. Squires, editors, From Foreclosure to Fair Lending: Advocacy, Organizing, Occupy, and the Pursuit of Equitable Credit (New York: New Village Press, 2013), 1.
Calvin Bradford and Gale Cincotta, “The Legacy, the Promise, and the Unfinished Agenda,” in Gregory D.
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Squires, From Redlining to Reinvestment: Community Responses to Urban Disinvestment (Philadelphia: Temple University Press, 1992), 228-229.
Bradford and Cincotta, 230.
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2.8 Conclusion
Throughout the 1950s, 1960s, and 1970s, as Pittsburgh’s low-income communities found themselves under assault from government urban renewal schemes, blight, and discrimination, people fought back. Women were often on the front lines, speaking truth to power in
Washington, as well as to elected officials in Pittsburgh. Two decades before Jane Jacobs and Pittsburgh History & Landmarks Foundation rallied advocates to support the preservation of historic properties, grassroots community leaders such as Frankie Mae Pace agitated for community improvement from the ground-up. Pace’s efforts joined other leaders such as Dorothy Richardson, Ethel Hagler, and Betty Jane Ralph to repulse further government-funded mass demolition projects in their neighborhoods and set a national precedent for community-driven urban regeneration, in the case of Neighborhood Housing Services. Elites responded to these voices of dissent. ACTION-Housing facilitated affordable housing development in the city and organized several community based organizations in the 1950s and 1960s. In addition, some individuals connected to powerful politicians, such as Morton Coleman, became effective
neighborhood advocates within the city and in Washington during the Johnson administration’s War on Poverty. Although elite-driven neighborhood projects failed to stem decline, they empowered neighborhood leaders and marked a departure from mass demolition as the only measure of “progress.”
As neighborhoods changed, so too did the nature of social capital. CDCs’ business-like real estate projects supplanted agitation tactics employed by Frankie Mae Pace or militant displays of power. By the 1970s, some CDCs, such as the Manchester Citizens Corporation, forged partnerships with local foundations and financial institutions to underwrite housing
restoration and construction. Although many CDCs became highly professionalized by the 1980s, Saul Alinsky’s disruptive methods did not entirely fade. Community based organizations continued to hold elite decision makers accountable to poor neighborhoods, even as equal partners. Alinsky’s Rules for Radicals reminds us that “The pressure produces the reaction, and constant pressure sustains action.” These rules would become even more invaluable as a 183 citywide coalition of CDCs utilized their newfound power with HMDA and CRA in the late-1980s to encourage banks to meet the needs of low-income communities.
Alinsky, Rules for Radicals (1971), 129.
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