Housing discrimination, including disastrous government-supported redlining, is hurting south Phoenix neighborhoods more than 50 years after it was struck down as illegal and predatory.

Catherine Reagor & Megan Taros Arizona Republic

Housing discrimination, including disastrous government-supported redlining,is hurting south Phoenix neighborhoods more than 50 years after it was struck down as illegal and predatory. 

Neighborhoods across south Phoenix still have low homeownership rates among Black and Latino people after areas south and east of downtown were redlined by the federal government in the 1930s.

That designation, the only one given to an area in Arizona, meant banks wouldn’t lend to people trying to buy homes there. 

That government action, as well as deed restrictions on where people of color could buy homes and other unfair practices, pushed many Black and Latino families south of downtown Phoenix and across the Salt River into substandard housing and neighborhoods with no sidewalks, public lighting or trees.

And by keeping the area’s residents from getting mortgages to buy homes for so long, the discriminatory policies kept many families from building the home equity that translates to savings and wealth.

Many parts of south Phoenix are now being revitalized with new housing and shopping developments and investment from the extension of light rail.

But the area, which saw some of the highest foreclosure rates during the Great Recession, is now seeing some of the biggest jumps in rents and home prices in the Valley.

South Phoenix’s real estate boom is shutting the door on many of the area’s longtime residents who can’t afford to live there now.

“Sadly, we still have redlining in south Phoenix,” said Patricia Garcia Duarte, executive vice president of Homeowner Homeownership Initiatives for Chicanos Por La Causa. “It just manifests itself in other ways than it did 50 years ago.”

She said despite housing discrimination shaping south Phoenix early on, the area still had thriving neighborhoods. But then freeway construction and development of Phoenix’s airport broke them up.

Housing advocates say the city hasn’t done enough to help them rebound.

Many longtime south Phoenix residents are hopeful about the area’s rejuvenation and are fighting for it.

“South Central Avenue (in south Phoenix) has been my go-to spot for decades. I ate, slept and prayed in the area,” said Star Reyes, client services manager for south Phoenix-based Raza Development Fund. “But I am so frustrated that 30 years later I am bringing my daughter to the area that hasn’t changed like the rest of Phoenix.”

Historical practices kept homeowner rates lower

Discriminatory housing practices started in Phoenix more than a century ago.

ASU’s Morrison Institute for Public Policy documents the history of Maricopa County and five other areas across the state affected by predatory housing policies in its report A Brief History of Housing Policy and Discrimination in Arizona.

“Present-day factors that determine where and how one can buy a home are influenced by historical public policy choices,” according to the report. “Past policies encouraged white homeownership, protected white people from economic downfall, and created segregation between white people and people of color.”

Although some policies have tried to reverse these practices and racial integration has drastically increased, the past still weighs on the present housing landscape of Arizona, the report found.

The impact of unfair housing policies can be seen in Arizona’s homeownership rates.

Black homeownership has dropped in Arizona during the past 50 years, despite approval of the Fair Housing Act that made discrimination illegal in 1968.

Latino homeownership in Arizona fell during the 2008 housing crash and hasn’t rebounded, reports Morrison.

“Thanks to federally mandated government redlining maps in the 1930s, areas like south Phoenix were cut off from getting access to loans for homes,” Arizona State University School of Social Transformation Professor Rashad Shabazz said. “Government actions like that hurt first-generation immigrants and working-class families trying to build stability and saving by buying a home. “

Those families didn’t get a chance to build wealth through homeownership and now don’t have a chance of buying because of high home prices, he said.

In 1970, about 66% of white households in Arizona owned a home, and about 49% of Black households owned a home, according to census data.

By 1990, white homeownership had slightly increased to 67% of households, while Black homeownership decreased to 41% of households.

During the housing boom, many Black and Latino people were targeted with predatory subprime loans. In 2006, 53% of all U.S. Black homebuyers and 47% of Latino homebuyers were using a subprime loan to buy or refinance. That compares with 26% of white homebuyers getting subprime loans.

In Arizona, which led the nation for foreclosures during much of the crash, subprime mortgages accounted for the majority of homes taken back my lenders. South and west Phoenix neighborhoods were hardest hit by the foreclosure crisis.

The latest census data shows in Arizona that white homeownership was 71.1% in 2019. The Latino homeownership rate was 53.9%, and Black homeownership was 34.6%.

Most neighborhoods in south Phoenix have even lower rates of Black and Latino homeowners.

“The legacy of redlining led to more problems for south Phoenix than low homeownership rates,” said Rebecca Flanagan, the former Arizona director of the U.S. Department of Housing and Urban Development. “It hurt schools, businesses and peoples’ health.”

Some people don’t want to talk about redlining and how it hurt south Phoenix because it makes them uncomfortable, she said.

“But people need to know the history of south Phoenix, so the same mistakes aren’t repeated,” Flanagan said. “I wonder how many people will read the Morrison report and not believe it happened.”1930S REDLINING MAP OF PHOENIX. SOURCE: R. NELSON ET AL., “MAPPING INEQUALITY,” IN UNIVERSITY OF RICHMOND, ACCESSED MAY 25, 2021; ASU MORRISON INSTITUTE FOR PUBLIC POLICY

Redlined and pushed out

South and southeast Phoenix were the only part of Arizona officially redlined by the federal government.

The policy that spurred much of the U.S.’ racial segregation was started in the early 1930s by the federally backed Home Owners’ Loan Corp. That group made maps that labeled the riskiness of making loans in an area with an A to D scale, according to Morrison.1930S REDLINING MAP OF PHOENIX. SOURCE: R. NELSON ET AL., “MAPPING INEQUALITY,” IN UNIVERSITY OF RICHMOND, ACCESSED MAY 25, 2021; ASU MORRISON INSTITUTE FOR PUBLIC POLICY

Areas with “A” labels were considered the best places to live, to build more housing and lend in. Areas that got a “D” were considered the worst because of their racial makeup and future stability.

Areas from Van Buren Street to the Salt River and between 24th Street and near 27th Avenue were given D designations or shaded in red, hence the redlining term. Red areas on the maps were labeled “hazardous.” Yellow areas were called “declining,” and purple areas were called “still desirable.”

The Federal Housing Administration used the maps to determine where it would back loans. A “D” rating meant no mortgages for a neighborhood.

Of the $120 billion in new housing subsidized by the federal government between 1934 and 1962, less than 2% went to people of color, according to Morrison’s research.Sheila Harris, founding director of the Arizona Housing Department

I think redlining is still a problem for south Phoenix. Look at where the investment is going. Besides light rail, it’s gone to downtown Phoenix.

“I think redlining is still a problem for south Phoenix,” said Sheila Harris, founding director of the Arizona Housing Department. “Look at where the investment is going. Besides light rail, it’s gone to downtown Phoenix.” 

Redlining didn’t just keep people of color from buying homes in south Phoenix. It led to fewer bank branches and more pawn shops and payday lenders. It created food deserts in the area as well as a lack of health care centers and the absence of much-needed infrastructure including public lighting and sidewalks.

It also created other discriminatory problems for the area that can’t be documented.

Homes were demolished and residents pushed out with freeway construction and the development of Sky Harbor International Airport.

Garcia Duarte said some homeowners in the south Phoenix neighborhood around the airport who decided not to sell to the city and leave still can’t refinance to fix up their homes.

Neighborhoods in west Phoenix, including parts of Maryvale, also have been hurt by freeway construction and racial discrimination for mortgages.

But those areas weren’t officially redlined like south Phoenix.

Neighborhoods influenced by redlining

Here’s a closer look at some of those neighborhoods directly affected by redlining. 

ZIP code 85007: This ZIP code east of the Arizona Capitol and west of downtown Phoenix stretches across Interstates 10 and 17 all the way to the Salt River.  

The Matthew Henson Public Housing Project was built as segregated affordable housing for Black families in the 1940s in this area. About 20 years ago, it was redeveloped into Henson Village and is now home to people of different races, ethnicities and ages. It also includes affordable and market rate rents now.

About 53% of 85007’s residents are Latino and 11% are Black, according to the latest Census data.

The neighborhood’s median home price jumped almost 75% from $215,000 in 2015 to $375,000 at the end of 2021.

About 37% of the area’s residents own their homes. Metro Phoenix’s overall homeownership rate is about 65%.  

Rents in the area have shot up 67% from $844 in 2015 to $1,410 now, according to Zillow.

Landlords filed to evict 2,171 times during that time. The average number of evictions for all Valley ZIP codes since 2015 is about 600.

The median household income in the 85007 area is $35,642, almost half of the $68,000 median income for all of metro Phoenix.

ZIP code 85009: This ZIP code, which includes part of downtown Phoenix, is bisected by interstates 10 and 17. The neighborhood that stretches to the river was marked by red and yellow on the federal government’s redline map.

About 83% of the 85009 area’s residents are Latino and 3% are Black.

The median home price in the area hit $284,000 at the end of last year, nearly triple from $100,000 in 2015.

Only 45% of the neighborhood’s residents own their homes.

Since 2015, the typical rent in the area has climbed from $845 to almost $1,450.

Landlords filed to evict renters 4,181 times in 85009 since 2015, according to Maricopa County Justice Court records.

The area’s median household income is $38,200.

ZIP code 85034: This south Phoenix area, home to the Eastlake neighborhood, saw more than 5,000 Latino families displaced during the 1950s when the airport was built there.

After 1900, this area drew many of Phoenix’s Black residents and has long been the city’s focal point for the civil rights movement.https://d8ce1b53f340cf60bc2f5ce0d395c228.safeframe.googlesyndication.com/safeframe/1-0-38/html/container.html

Now, about 63% of the area’s residents are Latino and 11% are Black.

Only 17% of the neighborhood’s residents own their homes, which is less than one third of the Valley’s homeownership rate.

The median price of a house in this ZIP is $320,000, more than triple from $101,450 in 2015. Rents climbed from $910 to $1,715 during that time.

Eviction filings since 2015 totaled 884. The area’s median income is $33,140.

ZIP code 85040: This neighborhood is just south of Sky Harbor and home to many industrial parks. But pricier homes are going up on the southern end.

A $1.35 billion light rail expansion will run along Central Avenue on the western border of this neighborhood.

About 60% of the area’s residents are Latino and 20% are Black.

The neighborhood’s homeownership rate is 45%.

The median home price climbed 158% from $130,000 in 2015 to $335,000 at the end of 2021.

Rents almost doubled from $940 to $1,825 during that time.

Tenants in 85040 experienced 4,604 eviction filings since 2015.

The area’s household income is $43,127, according to the latest Census data.

ZIP code 85041: This south Phoenix ZIP code runs from the Salt River along the west side of Central Avenue to South Mountain. Light rail will run through part of this neighborhood, where 67% of the residents are Latino and 15% are Black.

The median home price in the neighborhood has more than doubled from $159,000 in 2015 to $385,000 at the end of last year.

The typical rent for the area was $1,114 in 2015. It’s now $2,133

Since 2015, there have been 3,862 eviction filings for this area.

The median household income in 85041 is $58,438.

Victor Vidales, a lifelong resident of south Phoenix and real estate agent, said getting a mortgage is no longer a problem in the area that has been gentrified. The problem now for the area’s longtime residents is finding a home they can afford.

“We are seeing bids on south Phoenix homes of $50,000 to $100,000 above listing price,” said Vidales, who is also a member of SoPho Convening, which focuses on bringing equitable and sustainable development to the area.

“People who want to live close to family and friends in the area now must go to Buckeye, Tonopah or Apache Junction to find a home they can afford.”

Homebuyers of color shut out for years

For decades, Black and Latino homebuyers couldn’t legally buy or even live in homes outside of south Phoenix.

Read the deed of a 1948 Phoenix home

Read document

Many houses across central Phoenix built in the 1930s through the 1960s have covenants in their recorded deeds saying people of color can’t buy them.

The restrictions can be found in deeds for homes in many popular historic neighborhoods including Encanto, Willo and Coronado.

A deed pulled by Morrison from a Phoenix house built in 1948 said no one “with perceptible strains of Asiatic, Mexican, Mexican-Indian, Negro, Filipino or Hindu races could lease, buy or occupy the home.”

Developers in Phoenix and other parts of the U.S. could legally add and enforce the restrictive race covenant until the Fair Housing Act voided them.

A deed is created when a house is built and it stays with the house, so the racist covenants can’t be removed.

“I don’t want covenant restrictive covenants removed from deeds,” said Shabaaz, who has one in the documents for his home, which was built in 1965. “Those covenants document the institutionalized racism of the past that we must live with today.”Alison Cook-Davis, research director for ASU’s Morrison Institute for Public Policy

We think of housing discrimination of something from the past, but it continues to reverberate in the present. While there used to be clear laws restricting homeownership such as the deed covenants, now many of the practices are more subtle.

Another practice of housing discrimination found by Morrison: Real estate agents steered homebuyers of color to south Phoenix and away from more affluent, predominantly white neighborhoods.

In 1925, the Phoenix Real Estate Board barred Realtors from selling to “… members of any race … detrimental to property values in a neighborhood.”

Morrison cites 2018 research that shows “steering” is still happening.

“Steering affects families’ short- and long-term outcomes because of housing’s connection to poverty, employment, schooling, criminal activity, public safety and environmental health,” according to its report.

“We think of housing discrimination of something from the past, but it continues to reverberate in the present,” said Alison Cook-Davis, research director for Morrison. “While there used to be clear laws restricting homeownership such as the deed covenants, now many of the practices are more subtle.”

Phoenix businessman Lincoln Ragsdale, a leader in the Black community for almost half a century, lived in the Eastlake community in the 1940s and 1950s. He started a mortuary, an insurance firm and real estate brokerage because many Phoenix businesses then wouldn’t work with Black people.

He married Eleanor Ragsdale, who also became a real estate agent. The couple had children and looked for a bigger home nearby.  They found a house they liked in central Phoenix but couldn’t see the inside because real estate agents wouldn’t show a home in a predominantly white neighborhood to Black buyers.

The couple had a white friend buy the home and then transfer it to them.

Not served, excluded, threatened

Discrimination against Black Phoenix residents was more widespread than redlining.

The Ragsdales found the N-word spray-painted on their home one morning shortly after they moved in, but they didn’t move.  

In 1952, local bandleader Louis Jordan was refused service at Sky Harbor’s Sky Chef restaurant. City officials did stop that discrimination because the eatery was in a city-owned facility.

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In 1953 during spring training, professional baseball players Monte Irwin and Bill White became the first Black people to stay in downtown Phoenix’s Hotel Adams. But it took the New York Giants manager threatening for the team to leave the hotel for that to happen.

Tempe and Scottsdale were “sundown towns” before before the 1960s. Black and Latino people were only allowed to pass through, go to work or shop in the cities during the day.

Anyone breaking the rule could be cited by police or beat by white residents.

Flanagan said Latino friends who grew up in south Phoenix have talked about how the closest public swimming pool to them was in Tempe, and they were only allowed to go there the day before it was drained.

And discrimination could be more subtle.

Harris remembered when she was working for a housing nonprofit based in south Phoenix during the 1980s, the group couldn’t get pizza delivered because restaurants didn’t want to go there.

A controversial light rail plan on top of  promises unfulfilled

Phoenix annexed south Phoenix in the 1950s, and public officials made many promises to correct discrimination that led to substandard housing and infrastructure.

But decades of broken promises and underinvestment have long soured the relationship between south Phoenix residents and the city. The community fought for developments that would address pressing needs in the community like a lack of shade, health care and food insecurity.

Many reports with proposed solutions have been sitting on shelves, started but never completed.

The light rail expansion is supposed to make good on some of those promises, but it has been controversial with residents and businesses who say it won’t benefit them.

“The South Central light rail extension is only successful if it creates value for existing community members, residents and business owners,” said growth and transportation expert Shannon Scutari, who is also a member of the South Central Collaborative that works to provide south Phoenix with equitable opportunities for community development.

“If it doesn’t reduce transportation costs for south central families and increase their quality of life, it will sorely miss the mark.”

Three years ago, after an effort from residents calling for action to help neighbors being pushed out by rapidly increasing home prices, the ball began rolling on what would become the South-Central Transit Oriented development plan, which would serve as a roadmap for the future of the community.

Last month, after three years of planning, thousands of doors knocked on and more than 30 meetings, the community got its wish.

Phoenix aligned with community leaders in south Phoenix in a step to codify guidelines to combat gentrification and build up infrastructure in the community by approving the South-Central Transit-Oriented Development plan.

“The south-central corridor for too long has been perceived as the underdog, the forgotten, the left behind, the place you don’t want to visit at night. The area has suffered from decades of underinvestment and all too often looked upon as a place with way too many challenges and tremendous adversity,” said Francisca Montoya, a resident and volunteer in the planning effort.

“But south-central Phoenix is also a beautiful community that has withstood the test of time with optimism, strength, resilience and, most important, a deep sense of pride. It is time for the rest of Phoenix to take notice,” she said.

Many homebuyers and investors have taken notice of south Phoenix, which has led to the area’s first affordable housing crunch. The area has become a hotspot for homebuilding, but many of the new houses cost more than residents can afford.

“Every week, I get notices from folks who want to buy and build high rises, and I say, no, we need more affordable housing in this community,” said longtime south Phoenix leader and City Councilmember Calvin Goode in an Arizona Republic podcast from 2019.https://playlist.megaphone.fm/?e=AZUSA4523795641

 “We’re very proud of this area in terms of what we have been able to develop. But there’s still more to be done,” said the Eastlake resident and civil rights leader, who died in 2020.

Coverage of housing insecurity on azcentral.com and in The Arizona Republic is supported by a grant from the Arizona Community Foundation.

Reach the reporter at Catherine.Reagor@arizonarepublic.com or 602-444-8040. Follow her on Twitter @catherinereagor.

Megan Taros covers south Phoenix for The Arizona Republic. Have a tip? Reach her at mtaros@gannett.com or on Twitter @megataros. Her coverage is supported by Report for America and a grant from the Vitalyst Health Foundation.

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