From Perception to Policy

[This text was originally published in AREA Chicago #6 in June 2008]

As far back as the 1920s the Chicago School of Urban Sociology used the city as a laboratory, an open-air experiment from which they tried to derive general principles and laws. The idea was to observe what actually happened, then use those observations to predict the future. But how does subjective perception become scientific reality? And how does science, in its turn, become government policy? Today, a brief look back over the Chicago School models of urban development might provide some important clues to our own possible futures.

One of the foundational figures of this influential school, Ernest Burgess, believed that cities developed through successive waves of growth emanating from the center. Next came a transitional zone with businesses and factories, then a down-and-out district of tenement housing where immigrant populations were completely disoriented by a cultural and social flux that they had never experienced before. Moving further outward from this hard-luck zone, the situation was supposed to get gradually better. You had workingman’s homes with people slowly rising in society, then a residential area with decent middle-class housing and finally the genteel world of suburban villas, lawns and gardens. Burgess explains the zones and their transitions in his classic Chicago School article, “The Growth of a City” (1925):

“In the expansion of the city a process of distribution takes place which sifts and sorts and relocates individuals and groups by residence and occupation. The resulting differentiation of the cosmopolitan American city into areas is typically all from one pattern with only interesting minor modifications. Within the central business district or on an adjoining street is the ‘main stem’ of ‘hobohemia,’ the teeming Rialto of the homeless migratory man of the Middle West. In the zone of deterioration encircling the central business district are always to be fond the so-called ‘slums’ and ‘badlands,’ with their submerged regions of poverty, degradation, and disease, and their underworlds of crime and vice. Within a deteriorating area are rooming-house districts, the purgatory of ‘lost souls.’ Nearby is the Latin Quarter where creative and rebellious spirits resort. The slums are also crowded to overflowing with immigrant colonies—the Ghetto, Little Sicily, Greektown, Chinatown—fascinatingly combining Old World heritages with American adaptations. Wedging out from here is the Black Belt, with its free and disorderly life. The area of deteriorate, while essentially one of decay, of stationary or declining population, is also one of regeneration, as witness the mission, the settlement, the artists’ colony, radical centers—all obsessed with the vision of a new and better world.

The next zone is also inhabited predominately by factory and shop workers, but skilled and thrifty. This is an area of second immigrant settlement, generally of the second generation. It is the region of escape from the slum, the Deutschland of the aspiring Ghetto family. For Deutschland (literally, ‘Germany’), is the name given, half in envy, half in derision, to that region beyond the Ghetto where successful neighbors appear to be imitating German Jewish standards of living. But the inhabitant of this area in turn looks to the ‘Promised Land’ beyond…”

For Burgess, neither Chicago nor any other city fits perfectly into this ideal scheme. Geography intervenes, like the lakefront and the Chicago River, and irregularities are brought by transportation networks—railroad lines, then freeways. Nonetheless, this vision of the city as an expanding sequences of uniformly improving zones ended up settling in the bureaucratic mind as the ruling image of what a city is, and what a city does, thereby influencing policy for around 50 years, until the mid-1970s. How did such a simplistic image get turned into official urban policy


Part of the answer comes by examining the work of Homer Hoyt, an economist who studied at theUniversity of Chicago and worked mostly in real estate. Hoyt became part of the Federal Housing Administration (FHA), taking the analysis from the laboratory of Chicago to the entire nation. He conducted studies about where industry was located and how transportation lines were routed through the urban fabric. What he did in the course of his empirical studies was to transform Burgess’s idealized model. Instead of having concentric rings you have zones that are all connected to the center, like a pie cut into irregular pieces, all differentiated by the socio-economic status of their inhabitants. Henrika Kuklik puts it like this, in an excellent article entitled “Chicago Sociology and Urban Planning Policy: Sociological Theory as Occupational Ideology”:

“Hoyt’s analysis of data from sixty-four American cities confirmed the Chicago model, although he termed the sequential stages of urban development ‘sectors’ rather than ‘zones.’ Urban growth obeyed invariant laws: populations moved from the town center to the periphery, following established communication routes and favoring the most rapid transportation lines, and new residential construction moved toward free open country, pulled in the same general direction as major retail and office buildings. While Burgess had introduced the influence of transportation axes as factors distorting the regular circular sequence of city growth, Hoyt argued that roads were the primary stimulants behind city growth, which invariably followed a development sequence identical to Burgess’ … Like the Chicago sociologists, Hoyt expected collective irrationality to stimulate urban change; ‘crowd psychology’ propelled group movements from one neighborhood to another in the wake of fashion.”

This basic structural analysis became the hard core of U.S. government policy for about 40 or 50 years, once the FHA really got into swing. The idea, of course, was to improve the city, to make it more genteel. But Hoyt also wrote about how race influenced neighborhoods and property values, and his ideas had a major impact on FHA housing policy—that is to say national policy—for a long time. Remember, he was in the real-estate business. In a book called “100 Years of Land Values in Chicago” he made these observations:

“If the entrance of a colored family into a white neighborhood causes a general exodus of the white people it is reflected in property values. Except in the case of Negroes and Mexicans, however, these racial and national barriers disappear when the individuals of the foreign nationality groups rise in the economic scale or conform to the American standards of living… While the ranking may be scientifically wrong from the standpoint of inherent racial characteristics, it registers an opinion or prejudice that is reflected in land values; it is the ranking of race and nationalities with respect to their beneficial effect upon land values. Those having the most favorable effect come first in the list and those exerting the most detrimental effect appear last:

  1. English, Germans, Scots, Irish, Scandinavians
  2. North Italians
  3. Bohemians/Czechoslovakians
  4. Poles
  5. Lithuanians
  6. Greeks
  7. Russian Jews of lower class
  8. South Italians
  9. Negroes
  10. Mexicans

This is a case of the “Thomas Theorem,” formulated in 1928 by an important member of the Chicago School, William Issac Thomas. It reads like this: “If men define situations as real they are real in their consequences.” In the case at hand, what that means is that the subjective definition of what adds or subtracts value to an area becomes a reality that can be acted on by the government. Homer Hoyt published books based on exactly these kinds of “realities,” books which were not only used in the real-estate business but were also taken up by the Federal Housing Administration and treated as a justification for bureaucratic policy. Hoyt thought that if just one black family moved into a neighborhood, its property values were sure to go down. What arose from that in the private sector was the practice of red-lining: if there were “low-ranking” people in an area, then banks would not give loans in that area because they were afraid the home equity would be devalued. What happened on the governmental level is that the FHA distorted their federal funding programs, they didn’t provide support for people to buy homes in areas that were racially characterized, and above all, they did not support people of color who wanted to move into predominantly white neighborhoods. A subjective definition of property value created structural racism in the FHA up until the 1970s. The consequences were that certain areas became ethnic ghettos, on the basis of a perception that was made into reality. Huge areas of the inner cities were “condemned to decay,” as Henrika Kuklik put it in her article. Here are her conclusions:

“In the social scientific model adopted by the FHA, residential segregation and central city decline have the status of natural law. If members of what Hoyt euphemistically called an ‘inharmonious race’ are present in significant numbers, housing values suffer. Mixed populations may be found in borderline areas, but because ‘the presence of even one non-white person on a block otherwise populated by whites may initiate a period of transition,’ neighborhoods tend to become the preserve of some one racial group. The wealthy are inexorably drawn to the suburbs, rarely returning to formerly desirable sectors, and new construction is economically unfeasible in the older parts of the city. Central city decline is inevitable: ‘The erection of new dwellings on the periphery of a city … sets in motion forces tending to draw population from older houses and to cause all groups to move up a step leaving the oldest and cheapest houses to be occupied by the poorest families or to be vacated.’

In formulating its guidelines for action, the FHA translated Hoyt’s scheme into standardized judgements, easily implemented by anyone. It complied detailed neighborhood maps, charting the investment potential of various areas. The presence of even a single black family on a block was for FHA purposed sufficient to mark that entire block black, as it did, for example, in a March 1939 map of Brooklyn. Consistent with its procedures, the FHA tacitly endorsed ‘restrictive covenants,’ agreements written into deed that no blacks ever be permitted to live in FHA-financed dwellings, unless they were servants. Indeed, not until 1950, two years after the US Supreme Court had ruled restrictive covenants unconstitutional, did the agency prohibit covenants on the properties it insured. The guidelines formulated for the agency by Homer Hoyt remained operative, and in consequence entire neighborhoods were condemned to decay.”

This is the story of a particularly inglorious chapter of American urban planning history: how certain kinds of research were simplified, standardized and used as a justification for the extraction of surplus value from real-estate, under the guise of the “improvement” of the city. The abuse here is obvious, and it leads to one equally obvious question: What if the similar things were still going on today?

The Burgess-Hoyt model of urban growth is finished, it’s no longer operational. Its principles have been challenged and struck down, so that real-estate speculators and government officials can no longer do what they did from the 1930s to the 1950s, in a period that changed the shape of American cities. But do we really know what happened in the recent housing bubble, the one that ended just yesterday? What kinds of theories served to identify the people who would be offered subprime loans? Why did the government intervene to lower interest rates and in that way encourage the formation of the bubble? What were the consequences when it burst, and for whom? In the wake of this disaster, cheaply built suburbs around the country will shrink; gentrified inner cities will become even more expensive; and the poorest will be squeezed between the two. Shouldn’t our democratic government at the municipal, state and national levels help to make this situation better, rather than drafting policies that lead to new forms of income polarization and urban decay?

The point of this short look back over the history of Chicago School sociology is to make us think about the experiment we are all involved in today. The city is still a laboratory. Value is still a subjective decision. And only a watchful public eye on the many arenas where business meets government can keep the definitions of a powerful few from becoming everyone’s economic and legal reality. ♦

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