6

ADAPTATIONS

Mr. Bouton’s boys.” That is how Guy T. O. Hollyday described himself and John Mowbray in 1955 when he reached out to a former attendee of the Developers of High-Class Residential Property to borrow the minutes of the meetings held by the group in the 1910s.¹ Hollyday knew the group had included some of the most respected subdividers in the nation, including former Roland Park Company president Edward Bouton, and that they frankly discussed topics such as land planning as well as racial and religious restrictions. In fact, he borrowed the minutes to study restricted suburbs.²

Hollyday regarded himself and Mowbray as not just owing their start to Bouton, who had died in 1941; they were Bouton’s protégés, who sought to continue the work of early developers. In doing so they formed a continuity with Bouton’s generation not just through where they worked and the people they knew, but in their belief that planned suburbs—restricted, homogenous, and with strong boundaries—still held the key to successful development in the postwar era.

Bouton had given “his boys” their start at the Roland Park Company, but both had since gone on to illustrious careers of their own. Having begun as Roland Park Company sales manager, Hollyday branched out into mortgage banking and became head of the Federal Housing Administration (FHA) in 1953. Mowbray succeeded Bouton as president of the Roland Park Company in 1935 and remained in that position, though he, too, branched out into mortgage banking and also assumed prominent positions in the National Association of Real Estate Boards (NAREB). The two continued to cross paths, and in the late 1940s they collaborated on a project that seemed a marked departure from their various business endeavors centered on developing segregated suburbs and lending to white people to live in them: combating poor housing conditions in Baltimore’s majority-black neighborhoods. These efforts, called the Baltimore Plan, became a model endorsed by NAREB. The Baltimore Plan called for rehabilitation of existing housing and the enforcement of local housing codes in order to tamp down the growing influence of public housing reformers, who believed a strong centralized federal government could address the problems of inadequate housing and poverty.³ Ultimately, through professional networks and facilitated by Hollyday’s appointment to the FHA, the Baltimore Plan became federal policy.

The Baltimore Plan emerged amid wider debates over public housing, the role of business, and urban development. These debates came to a head in the years following the Second World War when different factions converged on Washington to secure the passage of major legislation. Ultimately, the federal government empowered cities to clear and redevelop large swaths of housing. Ostensibly, the purpose was to allow cities to eliminate slums, provide better housing for their citizens, and enrich municipal tax coffers through the higher property values that accompanied new, modern construction. In reality, federal and local officials, along with developers, who moved between public- and private-sector posts, used federal urban redevelopment programs to “renew and strengthen” racial borders throughout the United States.⁴ They did so primarily by creating mechanisms for protecting white property investment at the expense of erasing entire neighborhoods.⁵ At its root, the Baltimore Plan was borne from the same exclusionary goals as the urban redevelopment projects to which it stood in contrast. It was, in effect, an attempt at containing black Baltimoreans to particular areas to enhance or preserve property values for white homeowners.

The postwar urban redevelopment of the 1950s marked another generational shift in which a new crop of white developers launched their careers. Urban redevelopment continued to be imbued with exclusionary ideas from earlier decades. Established developers still played their part in its implementation, but the newer generation of developers built their reputations in the context of sustained civil rights activism that moved the dial on acceptable racial discourse after 1945.⁶ This combination of continuity and change produced a number of contradictions. No one embodied these contradictions more than James Rouse.

Rouse was a white mortgage banker who got his start enforcing discriminatory guidelines for the FHA during the New Deal. He then gained a reputation in the 1940s among politicians, civic groups, and business associations for his outspoken role in trying to improve conditions in poor black neighborhoods through his involvement, alongside Mowbray and Hollyday, in the Baltimore Plan. He took things a step further than Mowbray and Hollyday, however, by embracing the wholesale demolition of the southern part of Waverly and Cross Keys in some of the country’s first federally backed redevelopment projects.

Numerous contradictions point to the limited role that political ideology played in the dawn of postwar housing policy. Rouse enforced and profited from the discriminatory lending practices of the FHA, yet he also tried to create credit opportunities in redlined areas. He founded organizations to promote the benefits of city living, yet he put his vision of urbanism into practice by creating a gated community in Baltimore City that he saw as an extension of suburban Roland Park. He advocated for racial integration, enforced Jewish quotas for the Roland Park Company, and adopted restrictive covenants. Rouse, a self-described liberal, worked with conservatives such as Mowbray and Hollyday to fortify the very socioeconomic and racial borders that earlier suburban developers had created. In doing so, the group of them helped standardize a commercial logic binding real estate’s profitability to racial segregation.

REALTORS GO TO WASHINGTON

As the Waverly rehabilitation project wound down in 1940, John Mowbray’s star continued to rise at NAREB. In 1941 he joined the association’s Housing and Blighted Areas Committee after a stint chairing the powerful Land Developers and Home Builders Division. That year, the committee released a plan for cities to clear and redevelop neighborhoods. It called for the formation of a federal agency to finance land acquisition made by municipal agencies that created master plans for redevelopment. Cities would be able to use federal assistance in conjunction with state-sponsored demolition via eminent domain and other tools to assemble tracts of about twenty to thirty blocks in size, which they would then sell or lease to private developers at below-market value.⁷ The committee also proposed that the FHA could insure the loans of these private developers to help guarantee a minimum profit regardless of the project’s overall financial success and to incentivize them to redevelop the site in a timely fashion. Cities would be able to plan anything for the site, irrespective of its previous usage.⁸

With the ramping up of the defense industry and America’s entry into the Second World War the following year, NAREB retooled its policy proposal from a call for immediate action into a guide for the eventual redevelopment of cities once the war ended. Though the outcome of the war was anything but certain, federal agencies began laying the groundwork for a postwar world in which they could plan and manage everything from natural resources to transportation. State and municipal planning commissions, many of them less than a decade old, also drafted comprehensive plans for what they saw as inevitable postwar growth.⁹

The New Deal had legitimized planning in the 1930s as a necessary economic good that only became more essential as the United States entered the war. Planning efforts received the approval of economists both within and outside government who worried that the end of the war would thrust the economy back into depression. Over the decade, planners and those in adjacent fields such as resource management and architecture came to embrace an ascendant managerial modernism in which they could solve almost any issue by treating cities as blank slates that could be reorganized in rational, functional ways. They believed that these treatments could be applied universally to any city in a top-down manner by experts—their colleagues. Not all planners embraced such thinking, but this approach informed the long-range postwar planning taking place in the early 1940s. It punctuated how the NAREB Housing and Blight Committee justified planned redevelopment as wiping “out the mistakes of the past.”¹⁰

As shown in chapter 5, the Second World War caused NAREB to shift its official stance on the role of federal government in real estate. Even so, the group retained older talking points on matters such as redevelopment for public housing. NAREB’s efforts to fight blight were rooted partly in its opposition to public housing, which its leaders had previously called the beginning of real estate nationalization. NAREB continued to view public housing as a dire threat to real estate interests.¹¹ However, by 1941, little federal public housing was being constructed. Congress instead redirected the moribund program’s budget and manpower to construct enough housing for the defense workers it anticipated would migrate to industrial centers should the United States enter the Second World War.

NAREB acknowledged that war necessitated the growth of a federal housing apparatus. It also recognized that opposing federal defense housing might seem unpatriotic. As a solution, it established the Realtors’ Washington Committee to lobby for Realtor interests and secure places for Realtors in the expanded state. With its new office in the capitol, NAREB initially continued to propose policy that bore the marks of long-standing concerns of the organization. Much like how the association fought public housing during the 1930s when it was directly financed and constructed by the federal government, NAREB successfully pressured agencies to rescind two orders that would have stopped private companies from building temporary housing for defense workers. As a result, private firms built over three hundred thousand such units in 1943.¹² The Realtors’ Washington Committee scored other victories that year. Among them were agreements with eight government agencies, the army, and the navy to use NAREB appraisers for property transactions and to provide the language for boilerplate contracts between the federal government, brokers, appraisers, and real estate managers.¹³

The committee also worked with the newly formed Urban Land Institute (ULI) to identify allies in Congress on postwar redevelopment. Though ostensibly an independent organization, the ULI functioned as an arm of NAREB and was run by the same committee members, but the arrangement allowed NAREB to avoid accusations of self-interest when proposing programs that might affect large populations.¹⁴ The ULI, with its research and education mission, had a sheen of disinterested, objective expertise that neither NAREB nor the Realtors’ Washington Committee had.¹⁵

Like NAREB and the Washington Committee, the ULI also made connections with legislators. In 1943, Washington-based members of the ULI reached out to Florida senator Claude Pepper, who was interested in postwar planning and the elimination of blight. Pepper had already introduced a Senate resolution to establish a joint congressional committee to study the social and economic impacts of the war on areas such as unemployment and trade.¹⁶ He told Realtors he could also add a subcommittee to review urban redevelopment policy. That year, Utah senator Elbert Duncan Thomas also introduced a Senate resolution to establish a postwar redevelopment plan similar to NAREB’s, though the resolution did not pass.¹⁷

Another ally was Senator Robert F. Wagner of New York, who sponsored the Neighborhood Redevelopment Act on behalf of the ULI in 1943.¹⁸ Wagner, who was better known for his support of federally subsidized public housing and organized labor, backed the bill containing every provision that NAREB sought, including “encourag[ing] the development of good neighborhood conditions in towns and cities by private enterprise with the collaboration of public enterprise.”¹⁹ The federal government would provide loans and grants for cities to purchase, assemble, and clear land, which cities could lease or sell as they saw fit in accordance with a master metropolitan plan. The bill required contracts between cities and developers to stipulate that redevelopment work begin promptly. Wagner described the measure as “an encouragement-to-enterprise” bill.²⁰ In language supporting ULI’s attempts to distance itself from accusations of Realtor self-interest, Wagner affirmed to the Senate that the bill was vital to investors and financiers as well.²¹

In spite of its origins in NAREB, the bill divided Realtors.²² Chief among its opponents was the former chair of the NAREB Housing and Blight Committee, Arthur Binns, who had supported the creation of the original NAREB proposal. Binns objected to the $1 billion appropriated to the new federal body to distribute to cities at its discretion. To Binns, an amount that large would inevitably increase the power and size of the federal government—a process he equated with both socialism and fascism. A growing federal bureaucracy, argued Binns, would prove detrimental to local government, regardless of political party, by engendering “patronage, log rolling and manipulation.”²³ Two recent encounters had done much to sway him. The first was a meeting with a public housing advocate who thought the bill called for more government involvement in housing than any public housing group had ever pushed for. The second was an exchange Binns had with mayor of Baltimore and Democrat Howard Jackson. Jackson recounted how in his sixteen years as mayor, federal officials inevitably linked money to patronage through controlling contracts. “Little by little,” according to Jackson, “by the process of buying votes through public grants of money, the soul of Baltimore was being sold.”²⁴ Hugh Potter disagreed with Binns. Potter, a suburban developer and former NAREB president during the creation of the FHA, pointed out that corruption and patronage occurred no matter which party was in charge. Nevertheless, he conceded that the bill encouraged “private funds as never before to flow into building projects.”²⁵

Though Binns and Potter disagreed on the merits of the bill, they agreed that cities required massive redevelopment to protect them against blight. That they held those beliefs in common indicates the degree to which NAREB members reached a consensus on how housing and cities worked despite their different backgrounds and business activities. Potter developed the planned, segregated suburban community of River Oaks in Houston. Binns, meanwhile, bought houses in Philadelphia’s black neighborhoods, renovated them, and rented them out. The commonalities outlasted the bill itself, which failed to advance beyond committee in the Senate.

Mowbray had long held that same outlook on blight when he became chairman of the Realtors’ Washington Committee in 1945. He assumed the position at the same time a former Home Owners’ Loan Corporation (HOLC) official became the committee’s secretary.²⁶ Under Mowbray’s stewardship, the Realtors’ Washington Committee transitioned from a temporary wartime body to a permanent fixture in postwar politics. During his tenure, Mowbray created a statistical bureau to aid NAREB members in their appearances before Congress.²⁷ He also received assurances from the federal authorities that NAREB would consult on and participate in “any regulatory procedures” related to real estate.²⁸

Mowbray considered these to be important accomplishments, but in his eyes, they paled in comparison to how the committee mobilized thousands of Realtors to defeat commercial rent control legislation on his watch. This victory relied on the help of committee member J. C. Nichols—member of the defunct Developers of High-Class Residential Property and friend to the Roland Park Company—who assembled data, conducted surveys, and organized Realtor efforts.²⁹ Wagner, the author of the legislation, tabled it himself.

THE BALTIMORE PLAN

The end of the war in 1945 also saw Mowbray move from being involved in forestalling blight with the Waverly project to directly combating it across Baltimore. That year the Baltimore City Planning Commission declared fifty-six census tracts “blighted.” They based the number partly on estimates of the tracts that contained the most violations of the municipal Housing and Hygiene Ordinance, which laid out minimum housing standards and health codes. Mayor Theodore McKeldin appointed an advisory committee that recommended a pilot program, dubbed the Baltimore Plan for Housing and Law Enforcement, in which the city marshalled resources allotted under the ordinance to stringently enforce code in a single designated project area.

Though the mayor approved the pilot, the project was the culmination of nearly a decade of effort from civic groups. None had gained the attention of city hall like the Citizens’ Housing and Planning Association (CPHA), led by Guilford resident Frances Morton, a social worker who made a name for herself publishing exposés of black poverty in the white press during the 1930s. Drawing on a long tradition of middle-class women housing reformers dating back to the nineteenth century, she believed that improving housing conditions would better the physical and mental well-being of the poor. Inspired by the Waverly rehabilitation directed by Mowbray, the CPHA pursued an approach that combined neighborhood rehabilitation and creating strong health and housing codes to fight the problems of blight. Their efforts, though by no means theirs alone, spurred the passage of the Housing and Hygiene Ordinance during wartime.

To enforce the ordinance, the city established a Housing Division within the Baltimore City Health Department to inspect houses and yards, fine property owners, order properties vacated, and condemn buildings.³⁰ However, the stresses of wartime migration and manpower shortages diminished the efforts of the Housing Division’s capabilities from the outset. After the war, the ordinance received renewed attention from politicians and the real estate industry. They were joined by a mortgage banker who had taken an increasingly active role in the CPHA, James Rouse.

Rouse came to Baltimore in the 1930s to take night classes at the University of Maryland School of Law. He got a job as a clerk at the Baltimore offices of the FHA, which he credited with giving him a formative education in housing and mortgage lending. As part of his job he conducted home visits of applicants for mortgages to determine if they met the agency’s criteria.³¹ In this way he came to evaluate housing conditions based on FHA criteria, including its underwriting guidelines on race, class, location, and building appearance.

While working for the FHA in 1936, Rouse met Hollyday through mutual family ties on the Eastern Shore of Maryland. Rouse proposed that Hollyday’s Title Guarantee and Trust Company open a department specializing in FHA loans. Hollyday hired Rouse to run it.³² As head of the new department, Rouse became a mortgage correspondent. Correspondents sought insurance companies to buy FHA-backed mortgages. Rouse packaged mortgages issued by Title Guarantee for New York– and New England–based life insurance companies. Title Guarantee, in turn, used the money to issue new mortgages in Maryland.³³ In 1939 Rouse began his own mortgage banking company, which carried on the same activities.

In 1945 the CPHA approached the Housing Division about partnering to implement the Baltimore Plan on a single block in South Baltimore’s historically black Sharp Street neighborhood. They dubbed it Block One. The plan established a police squad to search for sanitation violations in the streets and coordinated inspectors from five different agencies—health, housing, building, fire, and zoning—to enter buildings. The inspectors issued violations to tenants or property owners. Each conducted follow-up inspections within thirty days to assess compliance.³⁴ After two years the CPHA declared the pilot a success. Rouse became a tireless proponent for the project and used his business connections to spread news of it far and wide.

During the pilot, the organizers became increasingly frustrated by the lack of compliance. Landlords, they noted, would rather repeatedly violate code than make any lasting changes. Tenants, meanwhile, either feared eviction or lacked the resources and knowledge to keep buildings in good repair. In 1947 the city and state established the country’s first housing court in response to the difficulties identified by the Housing Division. Under the terms of the court, the mayor assigned it all housing cases. The court scheduled all trials at the same time each morning to force defendants to sit through many cases in order to learn different aspects of housing law.³⁵ The CPHA happily reported that the housing court increased compliance enough to justify widening the scope of the Baltimore Plan from Block One to the surrounding neighborhood.

Code enforcement created unintended consequences for tenants.³⁶ Baltimore landlords took the opportunity to voluntarily add amenities to justify large rental increases that might cover the cost of other violations. Tenants, anticipating retaliation, refused to report conditions. The enforcement of overcrowding violations became particularly contentious for black tenants who faced higher rents and fewer options for housing than whites with the same income levels.³⁷ The Baltimore Plan did nothing to remedy the larger mechanisms of housing segregation that created a scarcity of available units where blacks could live. Doubling up families and taking on boarders sometimes became necessary survival strategies.

Residents also remained suspicious of the ability of city inspectors and police officers to protect their interests. Residents either experienced firsthand or were well aware of the history of racialized violence, disinvestment, and neglect. It did not help that one of the CPHA’s main rationales for the project was reducing juvenile delinquency among black children.³⁸ Rouse himself conceived of blight as not only the physical but also the moral decay of city neighborhoods. The belief of white reformers and social scientists that bettering the environment would stop the formation of a pathological black culture was a hallmark of midcentury approaches to tackling issues of poverty.³⁹

It is less clear how Mowbray and Hollyday regarded the participants in Block One. Hollyday’s priority was to use the Baltimore Plan to fight public housing construction. According to Morton, Hollyday played an instrumental role in circulating the Baltimore Plan to real estate professionals, who then tried to use it to defeat public housing initiatives throughout the country. Morton credited the publicity with bringing the initiative to national prominence but disagreed with the Baltimore Plan being instrumentalized against public housing. After finding themselves thrust into the national spotlight, Morton and other CPHA leaders toured the country explaining that the Baltimore Plan was part of a holistic housing program that required public housing construction to be effective. Public housing and code enforcement would need to be accompanied by bolstering local businesses and vigorously incentivizing new private housing construction open to low-income tenants.⁴⁰

Nevertheless, the Baltimore Plan provided an alternative model for NAREB’s fight against the revived interest in public housing in the late 1940s. NAREB employed a three-pronged attack on federal public housing legislation. First, it endorsed the Baltimore Plan as a way to consolidate support for code enforcement. If fighting blight through local housing codes prevented slum formation, then there would be no need for the federal government to support public housing. The Realtors’ Washington Committee solicited NAREB member information about local housing codes, health laws, and enforcement.⁴¹ Second, NAREB continued its call for the type of neighborhood rehabilitation statute that provided the impetus for the Waverly pilot study in 1938.⁴² Finally, as the Cold War heated up, NAREB mounted a campaign to depict public housing—and the growth of the federal bureaucracy in general—as socialism.⁴³

Like Morton, Rouse also objected to the way Realtors wanted to use rehabilitation and housing code enforcement as a substitute for public housing. Realtors, Rouse said, “in their zeal to substitute alternatives grabbed at straws wherever they could find them.”⁴⁴ However, Rouse lobbied Washington on behalf of the Mortgage Bankers Association to achieve the same goal: to ensure that it was businesses, rather than the federal government, that carried out and managed any urban redevelopment. The issue, according to Rouse, was not federal spending but who received the money. Rouse supported the FHA and postwar veterans mortgage financing as well as federal financing for businesses to carry out municipally planned urban redevelopment. Serving as chair of that association’s equivalent of the Realtors’ Washington Committee, he crafted a statement opposing public housing.⁴⁵

THE HOUSING ACT OF 1949

Four years of legislative attempts to write a redevelopment policy that also addressed the nationwide postwar housing shortage finally yielded the Housing Act of 1949. Morton, Rouse, and Hollyday all found aspects of the Housing Act to support. Title I of the act contained large sections of the NAREB urban redevelopment plan from earlier in the decade. It adopted parts of the NAREB plan for bringing developers into federal urban redevelopment projects by allotting $100 million per year to cover the difference between the price municipalities paid to assemble tracts through eminent domain and the below-market value at which they sold them to companies to carry out plans. The law required that cities target residential areas for redevelopment and plan projects that kept them primarily residential.⁴⁶ Title II increased the amount of money for FHA mortgage insurance. Title III authorized the construction of 810,000 new public housing units but left matters of the racial composition of residents in local hands. However, it also linked Titles I and III by requiring that public housing authorities demolish or renovate one slum dwelling unit for every public housing unit built.⁴⁷

Federal administrators close to deliberations over the act warned that federal housing officials might be accused of using “federal funds and powers to harden into brick and mortar the racially restrictive practices of private real estate and lending operations.”⁴⁸ An administrator in the federal Race Relations Service named Frank Horne tried to convince housing and redevelopment administrators to build antidiscrimination mechanisms into Title I. Chief among his concerns was that under the local provisions of the act, racial segregation would become the norm. In segregated housing markets all over the country, blacks were disproportionately displaced for urban redevelopment but had little chance of finding the same quality of housing as displaced whites. Horne did not rely on the ethical implications of displacement to move his colleagues; he pointed to the potential legal concern. The legal foundation of racial segregation dated back to the separate but equal doctrine of the Supreme Court’s Plessy v. Ferguson ruling. But housing displacement, argued Horne, was a special case in which separate but equal provisions could not possibly apply. “No two residential districts are equal,” he asserted. The “denial of a right to purchase or occupy property is an injury that is not redressed merely by the opportunity to exercise that right elsewhere.”⁴⁹ But Horne’s warning failed to impress the federal administrators in charge of shaping much of Title I and Title III.

However, a more recent Supreme Court case did move administrators to adopt a narrow set of antidiscriminatory mandates for Title I. In 1948, the sustained pressure of the NAACP brought the case of Shelley v. Kraemer to the Court, which subsequently ruled racial restrictive covenants legally unenforceable. This did not render existing racial restrictions illegal, but rather ensured they would not withstand individual legal challenges.⁵⁰ As a consequence, Title I of the Housing Act of 1949 conditioned federal financial assistance to local redevelopment agencies on those agencies removing any racial restrictions on the land it acquired. Furthermore, local agencies were forbidden from executing any type of contractual agreement that enabled any subsequent parties from restricting the sale, lease, or occupancy of redeveloped land on the basis of race.⁵¹

The FHA quickly followed suit by removing explicit racial language from its Underwriting Manual in 1949. Nevertheless, appraisers continued to factor race into property valuations. The FHA also began to claim it supported nondiscrimination, blaming the continuation of discrimination on a housing market it could not control.⁵² NAREB followed the lead of the FHA in 1950 and revised Article 34 of its code of ethics, which since 1924 had prevented Realtors from “introducing into a neighborhood a character of property or occupancy, members of any race or nationality, or any individual whose presence will clearly be detrimental to property values in that neighborhood.”⁵³ The revision prevented Realtors from “introducing into a neighborhood a character of property or use which will clearly be detrimental to property values in that neighborhood.”⁵⁴ Gone were the mentions of people, but occupancy counted as a type of use and thus remained as a criterion. Who occupied a property still mattered. The article thus preserved the status quo while Realtors distanced themselves from accusations of discrimination. The association continued to defend racial restrictions and encourage their use in documents not intended for the public eye.⁵⁵

Developers by and large anticipated that their restrictions would go unchallenged in court. More cautious groups of homeowners voted to end restrictive covenants in favor of neighborhood protective associations that had the legal power to screen and select home buyers, allowing them to reject buyers while officially not factoring in race.⁵⁶ Crucially, the very idea of restrictions continued to be endorsed by lenders and Realtors.⁵⁷ The removal of explicit racial language at the FHA, NAREB, and in restrictive covenants masked rather than stopped active discriminatory practices. Realtors, government officials, and homeowners alike still equated property value with race.

BALTIMORE AS A NATIONAL MODEL

In 1951, at the urging of Rouse, the CPHA and Baltimore City expanded the Baltimore Plan with an East Baltimore pilot study that focused the sanitation police, inspectors, and the plan’s growing publicity machine on fourteen square blocks in a predominantly black neighborhood near the Johns Hopkins Hospital.⁵⁸ As part of those efforts, Baltimore’s mayor elevated the Housing Division into a bureau, giving it more autonomy to coordinate agencies. As part of the reorganization, the city established the Mayor’s Advisory Council to make recommendations about future directions of the Baltimore Plan. The mayor selected Rouse and Hollyday to be on the council. Council members grew concerned about the pace at which the plan effected change. Code enforcement worked, in their opinions, but the system needed to be streamlined. The Mayor’s Advisory Council calculated that at its current rate, the Baltimore Plan would require three hundred years to fix every blighted block in Baltimore.⁵⁹ The council urged the mayor to abolish the housing bureau in favor of a volunteer Commission on Blight. The commission would greatly improve the pace of improvements, the council argued, if the mayor vested in it independent powers like those of a redevelopment or housing authority.⁶⁰ The commission’s centralization would streamline and coordinate the five agencies involved, reducing the time and manpower required to bring each violation to housing court. The mayor rejected the idea, prompting Rouse, Hollyday, and others to resign from the Mayor’s Advisory Council in 1953.

Rouse’s frustration with the Baltimore Plan changed his views of urban redevelopment. He came to believe that the most effective way to improve the lives of poor people was to clear blocks and relocate residents to public housing. He maintained that any development should be carried out chiefly by private enterprise. In fact, he saw urban redevelopment in Baltimore as a business opportunity. Rouse soon got his chance to implement some of these ideas as Baltimore conducted one of the first redevelopment projects under the 1949 act.

Like many of the earliest federal redevelopment projects, Baltimore’s originated as a municipal- and state-financed initiative prior to the act’s passage. In 1947 the Baltimore City Planning Commission approved the site. Even though the Housing Act had not yet passed, the Baltimore City plan contained a provision from the old NAREB blight plan of a multimillion-dollar allocation to fund the difference between the value of land to be redeveloped and the below-market value at which the city would sell the land to developers. The Baltimore City Redevelopment Commission called it “an unprecedented opportunity for private enterprise to participate in a new field of sound investment.”⁶¹

The area selected for the redevelopment was the southern section of Waverly, including the redlined area rebranded South Waverly and omitted from the original 1938 project, in part because of its African American residents.⁶² By 1953, when the project got underway, the area’s percentage of nonwhite residents remained 51.3 percent. The project area encompassed nine blocks bounded by railroad tracks on the south, Greenmount Avenue on the west, and a zigzagging border of several streets to the north and east.

Plans called for replacing all the structures in the area with a shopping center, new housing, and reconfigured streets in conformity with contemporary planning principles. Varied mixed-use buildings on nine blocks would become two super blocks of identical attached garden apartments set back from the street at angles that maximized light and air circulation. The large blocks created by street closures enabled planners to designate play areas between the buildings at a safe distance from traffic. Selected streets would be widened or extended through the project area on the north to facilitate continuous traffic flow through Waverly to the surrounding areas. All underground utilities such as sewer and water lines would be updated to follow the new street pattern. The design shared much in common with the low-rise public housing begun in the 1930s.⁶³

The project required the demolition of 170 residences, along with commercial buildings and scattered small industrial sites. Overall, it would replace 197 units housing 847 people with 291 apartments designed to house 1,024 people. The Housing Authority of Baltimore City (HABC) handled all relocation services on behalf of the Baltimore Redevelopment Commission, the body in charge of coordinating urban redevelopment. The HABC’s relocation office dispersed most residents throughout Baltimore in neighborhoods comparable to Waverly, based on what people could afford to buy or rent and the needs of the household. Some gained spots in public housing.

Though 70 percent of Waverly’s housing units contained renters, homeowners lived in the area as well. The HABC paid out relocation expenses to both renters and owners, and owners received additional compensation for the property seized by eminent domain. The majority of these property owners were African American. Black homeowners outnumbered white homeowners nineteen to ten. The majority of property owners, black and white, thought their property was worth more than the city paid them.⁶⁴ Ten black homeowners and five white homeowners hired attorneys to negotiate higher offers from the city, and all of them secured higher offers.⁶⁵

The HABC assured residents that some of the displaced would be relocated in Waverly.⁶⁶ This turned out to be a possibility only for white residents. All 291 new housing units were segregated for whites only. Black residents of Waverly expressed their frustration with being displaced for segregated housing. A city survey found the prime reason displaced black households disliked the redevelopment plan was that “the city” would not let them live in the new units. The Baltimore Redevelopment Commission passed the blame to the private development company, which “select[ed] its own tenants.”⁶⁷ News of the redevelopment’s segregation reached the Urban League, which condemned the project for its racial segregation.⁶⁸ The developers of the housing, Harry Bart and Albert Stark, remained unmoved. News also quickly reached federal administrators such as Frank Horne of the federal Race Relations Service. Horne watched as his predictions that redevelopment dollars would fund racial segregation urban were realized. To him, the Waverly pilot study demonstrated “the issue of Federal facilitation of ‘Negro clearance’ about as sharply as is conceivable.”⁶⁹ Clarence Mitchell of the NAACP cited Waverly as an example of federal housing policy instituting a “monumental program of segregation” that succeeded in doing what “the courts have forbidden state legislatures and city councils to do and what the Ku Klux Klan has not been able to accomplish by intimidation and violence.”⁷⁰

The FHA lent federal dollars to the Title I money funding the segregated redevelopment. Bart and Stark contracted with Rouse’s mortgage banking company to arrange financing. They secured a commitment from the FHA to insure a $1,891,500 mortgage on the 291-unit rental project.⁷¹ With that approval, FHA credit finally flowed into the redlined Waverly. However, that credit abetted the same racial segregation that redlining entrenched in the first place. The project also created an additional brick and mortar bulwark against future racial change spreading from East Baltimore into the affluent North Central section of the city near Roland Park Company subdivisions. In 1938 the northern half of Waverly formed this buffer zone, but even then, officials eyed the redlined southern section of the neighborhood as a potential future problem. In 1953 the city, with the aid of developers and federal dollars, finished the job. Because the contract for redevelopment left the property in the hands of the Bart and Stark for decades, continuous vetting of new tenants accomplished what the racially restrictive covenants and zoning changes did in Waverly’s northern half.

Rouse created a new company to helm development of the shopping center portion of the Waverly program. To run it, he sought a businessman with more development experience than he possessed. He brought in Baltimore developer Joseph Meyerhoff, whom he knew through mutual connections at the Roland Park Company. Meyerhoff, the son of Jewish immigrants, had built his entire career on selling and renting housing only to white Christians. Meyerhoff survived the Great Depression by buying part of the undeveloped section of Northwood from an overextended Roland Park Company with the agreement that he enforce the company’s restrictions on units he built. In fact, if he were given the choice between working with John Mowbray or appeasing angry members of the Baltimore Jewish Council by selling to Jews, Meyerhoff said he would have told “the council to go to Hell.”⁷²

For the shopping center, Rouse drew on his experience as a mortgage correspondent to secure financing. By 1953 Rouse had established connections with eighteen life insurance companies, to whom he sold FHA-insured mortgages representing over $150 million.⁷³ He now turned to those same life insurance companies to lend him the capital for the shopping center. The Mutual Benefit Life Insurance Company supplied $650,000.

With the shopping center in Baltimore, life insurance companies joined the array of private businesses that carried out federally backed redevelopment plans under the new policies of the 1949 Housing Act. It was not, however, their first foray into urban redevelopment, nor was it the first time a life insurance company financed a segregated project. In the early 1940s, the New York Metropolitan Life Insurance Company built Stuyvesant Town, an all-white rental complex on twenty demolished blocks of Manhattan’s Lower East Side.

Waverly served as a learning experience for Rouse, Baltimore, and federal agencies.⁷⁴ The Baltimore Planning Commission wanted to develop mechanisms to allow the “ordinary builder,” rather than insurance companies, to take part in future redevelopment projects. Despite this goal, redevelopment projects such as Waverly required a large outlay of capital and the ability to secure large mortgages. FHA financing greatly facilitated the ability of Rouse to arrange a mortgage, a task that builders without contacts in the lending and insurance industry would find difficult to manage. FHA standards for mortgage insurance, including those on size, cost, and building standards, already had the effect of privileging very large suburban developers throughout the country.

The Waverly study had long-term advantages for Rouse’s business. He spun off a company from his main firm to manage the Waverly shopping center and collected a portion of rents. It also marked the beginning of Rouse’s business relationship with Bart and Stark, who along with Meyerhoff served as chairmen of all Rouse corporate boards for the next two decades.⁷⁵ Rouse’s sustained involvement in the project through financing the housing and managing the shopping center meant that Rouse likely knew about the racial segregation built into Waverly’s relocation policies and tenant selection. At the very least, he willingly worked with and brought into his company people like Stark, Bart, and Meyerhoff, who had long and well-known records of enforcing segregation. On the heels of the Baltimore Plan, Waverly indeed represented a business opportunity for Rouse that demonstrated his ability to compartmentalize the black poverty he built a reputation attacking through code enforcement and the racially segregated housing of the urban redevelopment he profited from.

RENEWAL, REHABILITATION, AND THE 1954 HOUSING ACT

Both the Baltimore Plan and the Waverly pilot study brought Rouse social and political capital. In 1953 President Dwight Eisenhower tapped Rouse to head the urban development subcommittee of the new President’s Advisory Committee on Government Housing Policy and Programs. Rouse’s committee drafted a report calling for a more expansive version of urban redevelopment, which it termed “urban renewal.”⁷⁶ Urban renewal incorporated housing rehabilitation with existing provisions on clearance in order to attack “the whole process of urban decay.” To use the language of its proponents, it would cover everything from the earliest stages of blight to the full slums that needed to be cleared through public-private partnerships. Public housing construction would be acceptable so long as it primarily served to house those displaced by redevelopment.⁷⁷ The committee recommended that urban renewal be spearheaded by local actors on the condition that they present comprehensive master plans for an area’s use. The FHA would then finance renewal as well as rehabilitation on terms comparable to the mortgage insurance it already provided. While the emphasis on rehabilitation along the lines of the Baltimore Plan seemed to preclude wholesale demolition of neighborhoods, it was nevertheless predicated on the prevailing association between black residents and lower property values that portended poor conditions. Now, with urban renewal, local actors would gain more the latitude to reshape large swaths of cities.

Rouse also incorporated his experiences working on the Baltimore Plan and in Waverly into testimony defending urban renewal. Renewal, he explained, would save the fabric of the city, and when put under a “vigorous program of law enforcement,” all structures would meet minimum local standards. Any structures unfit for such purposes, he argued, “should be demolished; adverse nonconforming uses condemned; congestion relieved; parks and playgrounds provided; public utilities installed; [and] street and traffic patterns planned to protect the neighborhood.”⁷⁸

Eisenhower selected Hollyday to help shape his administration’s housing policy as head of the FHA. One of Hollyday’s first acts was to appoint an advisory committee chaired by Rouse and consisting of large housing developers, fellow mortgage bankers, and leaders of the construction industry. A month later, Hollyday announced the FHA’s commitment to expand the ways it facilitated urban redevelopment. Among the new measures was a plan for financing housing rehabilitation along the lines of the Baltimore Plan.

Hollyday and Rouse were instrumental in crafting the Housing Act Eisenhower signed into law in 1954. The act made it easier to construct FHA-backed private housing in redevelopment areas. On the whole, however, urban renewal would not have to target residential streets, nor would new construction have to be residential at all. The act also decoupled the construction of redevelopment housing from the construction of matching numbers of public housing units, which had been required under the 1949 Housing Act. The first funded project completed under the law was the publication of a report explaining the Baltimore Plan for those interested in replicating it elsewhere.⁷⁹

URBAN RENEWAL AND CROSS KEYS

For a time, the area of Baltimore north of Waverly and between the Jones Falls and York Road largely escaped the urban renewal that rendered large swaths of East and West Baltimore unrecognizable to those who had lived there previously. Much of this area, with the exception of Cross Keys, consisted of the Roland Park Company district. Far from the Baltimore Plan inspectors, Cross Keys had gone unnoticed by city and federal administrators. Though the community remained unacknowledged, for better or worse, by the HOLC, it remained difficult for its black residents to obtain credit, as was the case throughout the country. Former resident Ed Chaney remembered how “even our refrigerator had a coin box on it.”⁸⁰ Nevertheless, it had grown more prosperous over the 1940s.⁸¹ Detached two-story brick homes joined older ones made of wood as the community of property owners and renters grew. Enough young children lived in Cross Keys that the city added portable classrooms to the local public school in the 1940s.

FIGURE 6.1  Falls Road in Cross Keys, before 1956.

(Courtesy of the Maryland Historical Society)

This began to change in the 1950s, when urban renewal ended the relative peace and prosperity of Cross Keys. Its location in the Jones Falls Valley put it in squarely in the path of a planned expressway. In May 1951, Baltimore City voters approved a $10 million bond for the Jones Falls Expressway. Construction did not begin until after the passage of the Interstate Highway Act in 1956. The act’s generous provisions had the federal government finance 90 percent of a highway project while state and cities agencies covered the other 10 percent. In cities across the country, highways and urban renewal projects went hand in hand. City agencies condemned land on either side of a highway for projects such as public housing or office buildings. Baltimore’s proposed highway routes and accompanying urban renewal projects followed this model. They also reflected a national trend in site and project selection in that they reinforced racial boundaries and created others, destroyed black neighborhoods, and, throughout the city, spurred grassroots organizing efforts by people trying to save their homes.82

Baltimore and the state of Maryland successfully secured federal financing for the Jones Falls Expressway, which subsequently received the designation Interstate 83. Construction began in 1956. Thirty-two of 104 Cross Keys homes stood in the path of a planned interchange at Cold Spring Lane and Falls Road. There was no community input.⁸³ To longtime resident Gert West, Falls Road had remained “one big family until word came that the city was going to buy up the houses in Cross Keys and tear them down.”⁸⁴

Baltimore followed the national trend of pairing interstate highway construction with urban renewal. In 1960 the Baltimore school board learned that Roland Park’s Baltimore Country Club wanted to sell a portion of its golf course.⁸⁵ The board requested that the city purchase sixty-three acres for a new educational complex for two of Baltimore’s most venerable historically white high schools, Western High School and Baltimore Polytechnic Institute. Advocates reasoned that the new schools would “halt the flight of middle class families to the suburbs.”⁸⁶ The only site the school board considered consisted of the land between Cold Spring Lane, Falls Road, the Jones Falls, and three acres of the country club. The new school complex would replace the remaining thirty-two properties on the west side of Cross Keys. When combined with the expressway interchange, Cross Keys lost 62 percent of its houses.

The Baltimore Urban Renewal and Housing Agency (BURHA) assumed the responsibility of relocating displaced residents. BURHA had initially been formed to relocate residents displaced by public housing construction. It later contracted with the Baltimore Redevelopment Commission to relocate all residents displaced by any highway or urban renewal project receiving federal funding. It handled relocation duties of the municipally funded Cross Keys school site because the project was being carried out in tandem with the federally funded expressway. Under BURHA, renters received financial assistance and help from staff members charged with finding them new places to live.

FIGURE 6.2  Falls Road in Cross Keys, after 1956.

(Courtesy of the Maryland Historical Society)

BURHA, like its counterparts across the country, often failed to provide reliable, adequate, or timely assistance, especially when working with black tenants.87 Cross Keys residents on the school site recalled being treated as afterthoughts. “City Hall just gave us three options,” recalled West. “The first offer for your house was one amount of money, the second was for some more, and if you thought your house was worth more, you had to go to court and sue. And who could afford that?”⁸⁸ The Baltimore Country Club could. It successfully sued the city for a higher appraisal that entitled it to be paid more money for its land. By that time, Cross Keys residents had taken whatever money the city offered.⁸⁹

In anticipation of demolishing over half of Cross Keys for a school and highway, the city shuttered the existing public school on the west side of Falls Road. Cross Keys lost its churches, doctor’s office, and all but one of its stores. One by one, residents left. A decade later, Cross Keys seemed like a “ghost town” to those who remembered its tight-knit sense of community.⁹⁰ They joined ten thousand Baltimore households displaced by urban renewal.⁹¹ Blacks comprised 85 percent of the displaced.⁹²

A BURHA spokesperson speaking about Cross Keys displacement commented that every household would now be better off. As evidence, he pointed out that half would be buying new homes. Indeed, some former Cross Keys residents, such as the Hynson family, considered the payout they received good enough that relocation afforded them a chance at upward mobility.⁹³ Cross Keys residents moved to one of several areas. Some headed up Falls Road to Bare Hills in Baltimore County, a small settlement with historical social and religious ties to Cross Keys. Most, however, joined other African Americans seeking housing in Northwest Baltimore on the other side of the Jones Falls or, like the Hynsons, in Govans on the east side of York Road north of the decades-old black suburb of Wilson Park. Those moving into these areas in the early 1960s faced hostile white landlords who slammed doors in their faces or claimed the homes were already rented.⁹⁴

Speculators capitalized on the mass displacement of urban renewal, the housing shortage for black buyers and renters, and credit discrimination.⁹⁵ Those who moved to Govans and Northwest Baltimore faced blockbusting from speculators who bought houses at low prices from whites and either sold them at exorbitant markups to blacks or rented to them at high rates. Because black borrowers continued to be denied federally insured loans, speculators engaged in predatory financial arrangements such as contract selling, in which they would collect a weekly fee toward the purchase of the house but offer none of the legal or financial protections of a mortgage.⁹⁶ They were aided by black real estate brokers who contracted with white NAREB members to steer African Americans into particular neighborhoods.⁹⁷ NAREB members could not be accused of violating association ethics about harming property values, and everyone involved profited from commissions and referral fees.

THE VILLAGE OF CROSS KEYS

The Baltimore Country Club soon put the remainder of its property on the west side of Falls Road on the market. Rouse seized the opportunity to purchase it in 1961 and begin his company’s first planned community. He named it the Village of Cross Keys. Rouse may have adopted the name Cross Keys, but the community was to be more similar to Roland Park. Whatever the motive, the name changed what Cross Keys would come to mean to all Baltimoreans.⁹⁸

The tract’s strong boundaries, which included the Jones Falls, Falls Road, and the new school complex, appealed to Rouse, who envisioned the “island nature” of the land giving rise to an isolated “urban village” complete with an ornamental gatehouse and perimeter fences. When the Roland Park Company created its borders seventy years before, it visually separated Roland Park from Cross Keys with a hedge. In 1961, Rouse proudly declared that the Village of Cross Keys would form a “fine addition to the Roland Park Community.”⁹⁹

Rouse knew that the success of the Village of Cross Keys depended on securing the alliance of Roland Park residents. When he needed a zoning variance for the Village of Cross Keys, he held a series of meetings with them. He never consulted with the remaining residents of Cross Keys on the edge of his proposed tract. Roland Park residents agreed to support a zoning variance so long as Rouse signed on to a set of restrictions governing the development, though no race clause was included.¹⁰⁰ Rouse agreed.

The plans for the Village of Cross Keys called for ninety-eight town houses set back and facing away from Falls Road and clustered on an internal network of streets named Bouton, Olmsted, and Palmer Greens. Rouse’s company worked hard to convince Baltimoreans that the town houses were not the row houses that dominated Baltimore’s housing stock.¹⁰¹ This distinction served to separate the Village of Cross Keys from Baltimore City, much like the Roland Park Company used the term “suburb” to carve out its own niche in opposition to the city. The focal point of the complex would be a commercial and office complex called the Village Square intended to serve residents. Flanking the clusters of town houses would be garden apartments, mid-rise apartments, and one luxury high-rise named Harper House, after the slaveowner Robert Goodloe Harper who owned the land in the early nineteenth century.

Rouse intended for the Village of Cross Keys to be open to people of all races and religions. His company never advertised that fact, but his past disavowals of housing segregation drew the attention of black organizers. The Congress of Racial Equality (CORE) made it clear to Rouse that they would monitor whether black people indeed bought and rented homes.¹⁰² This made members of Rouse’s team uneasy. The project’s head of publicity wondered if the consequences of CORE approval would include unwanted attention to “breakthrough” integration. Concerned that prospective white buyers might choose to live elsewhere, company officials resolved to “quietly seek out a qualified Negro” to rent a garden apartment in order to neutralize the publicity of African Americans visiting the Village of Cross Keys and moving in.¹⁰³ White Village of Cross Keys residents pressured Rouse by voicing their expectation that racial integration would amount to a small quota of nonwhite residents. One added, “I do think that two colored families are more than adequate.”¹⁰⁴

Rouse considered instituting quotas for African Americans. It was not the first time. In 1951, he and a partner had formed a company to manage rentals of a new Roland Park Company apartment building for which they had secured financing. There they instituted a Jewish quota and quelled rumors that they would rent units to black people. Rouse had been offended by pushback from Baltimore’s Jewish community, who threatened to fight the quotas in the press. He reasoned that “the simple fact is that a wholly non-Jewish management company has attempted to be effective in opening the doors of a previously closed community, and the fruits of that effort are to be a public statement branding the owners of the apartment building and its managers as anti-Semitic.”¹⁰⁵ He ultimately opted not to enforce quotas in the Village of Cross Keys, but Rouse retained a vision of racial integration in which his company allowed a few highly vetted individuals to live in what would unquestionably remain a majority-white community.

CONCLUSION

With its restrictive covenants and orientation toward Roland Park, Rouse’s first planned community served as a microcosm of how the very practices begun next door would remain too profitable for the next generation to dispense with. Rouse favored racial integration, but integration meant a small and highly vetted contingent of renters in a firmly majority-white complex of rentals and condominiums. The same thinking made it acceptable to Rouse to adopt the name of a black neighborhood for his first subdivision, purchase land from the party responsible for part of that neighborhood’s demolition, name the largest building in the middle of it after a slaveowner, and when he needed to secure zoning changes, consult only with local white residents. Rouse’s brand of liberalism allowed him to reconcile his roles in the FHA, the Baltimore Plan, and Waverly as a supporter of both private development and expansive federal power, of both integration and quotas.

This postwar refinement of racial capitalism enabled the most well-known and politically powerful postwar developers to disavow racial inequality but perpetuate it as part of doing business. William Levitt, the developer perhaps most associated with the postwar suburban boom through Levitt and Sons’ Levittown subdivisions, told Time magazine, “We can solve a housing problem, or we can try to solve a racial problem. But we cannot combine the two.”¹⁰⁶ Levittown garnered more national and international attention than any other American suburb of the immediate postwar years. The success of their developments cast Levitt and Sons into the spotlight as industry leaders.

It was the attention on Levittown that prompted the NAACP and other local organizations to pressure the FHA housing director to stop underwriting mortgages to Levittown unless Levitt agreed to a nondiscrimination policy in the wake of Shelley v. Kraemer. Though unsuccessful, their efforts prompted Levitt’s lawyers to couch the company’s position in terms of free enterprise. Attempts to integrate Levittown, they argued, interfered with free enterprise.¹⁰⁷ Taken together, Levitt’s comments and the position of company attorneys amounted to a curiously contradictory discourse in which the developer both abdicated responsibility for market conditions while claiming the right to participate in the housing market as he saw fit.

In the context of the Cold War and the building momentum of the 1950s civil rights movement, the shift toward a discourse of free enterprise seemed to mark a shift toward how developers conceived of their role in shaping housing markets. Whereas the developers of the early twentieth century turned to racial segregation as part of a broader experiment with making suburbs profitable, by the 1950s Levitt could plausibly claim, as an NAACP attorney put it, that he “could not take a chance on admitting Negroes and then not being able to sell his houses.”¹⁰⁸ Though befitting of the time period, such statements echoed how the previous generation of developers strategically devolved sales decisions to residents. Developers relied on this tactic of popular sovereignty to bolster discriminatory outcomes. In the 1910s and 1920s developers like the Roland Park Company invoked images of hypothetical riots and lynching. In the 1950s the Levitts turned to free enterprise and the common sense of the market.