A blog post from Chicago magazine tells part of the story of how Chicago helped lead the way for northern segregation:
In his new book Segregation: A Global History of Divided Cities, Carl H. Nightingale traces the phenomenon back to Sumer, but narrows down to a focus on Johannesburg and Chicago. In the former, segregation was explicit. In the latter, it couldn’t be; in 1917, the NAACP challenged a segregation ordinance in Louisville, leading to the decision in Buchanan v. Warley, in which “a multiracial team of attorneys led by a black professional had forced a white supremacist judiciary to choose between racism and a basic premise of laissez-faire capitalism—and property rights won out, at least in the case of neighborhood segregation.” But there was profit to be had in racism, and it would soon find ways around “laissez-faire capitalism,” with curious allies in the Progressive movement.
About a decade before Buchanan, the National Association of Real Estate Boards grew out of the Chicago Real Estate Board; it would coin the term realtor, and set professional standards for the sale of real estate (now the National Association of Realtors, it remains one of the most powerful lobbying organizations in the country). In the 1920s, its general counsel was Nathan William MacChesney, a former president of the Illinois Bar and a co-founder of Northwestern’s Journal of Criminal Law and Criminology. MacChesney was considered a progressive; in the words of David Roediger, “the principal figure in the ‘progressive’ reform of real estate.”
The NAREB, and MacChesney, had a powerful progressive ally in Richard T. Ely, then an economist at the University of Wisconsin; in the mid-’20s, he moved to Northwestern. Ely, a proponent of the Social Gospel, had ties to Chicago progressives—he was the first president of the American Association of Labor Legislation, a “useful synechodoche for progressive economics,” which had Jane Addams on its board.
But Ely and MacChesney also represented troubling strains in the Progressive movement, as Nightingale writes:
Though neither elaborated a full-fledged theory of race in print, both had swum in a similar soup of racialized and imperialist reform politics for most of their careers…. several times [Ely] advocated measures to slow down the reproduction of people he deemed part of the “sad human rubbish-heap”—the “feeble-minded,” welfare recipients, and criminals…. MacChesney, whose list of board memberships in reform organizations was legendary, likewise wrote a eugenical tract advocating sterilization programs for the mentally ill and for prisoners…
The Great Migration continued to increase Chicago’s black population, but the city now had a powerful tool to control it. By 1940, according to historian Beryl Satter, Chicago had more racial-deed restrictions than any other city in the country; half the city was covered by such covenants. Nor was it limited to Chicago, Satter writes: “Real estate boards across the nation recognized CREB’s pioneering work in maintaining all-white communities and looked to CREB for advice as they crafted their own racially restrictive plans.” The fear that Johnson—himself a child of the Great Migration—and his colleagues had warned about in 1922 came to fruition, encoded into law.
Chicago is a global city but also has a checkered past. I don’t think many Chicagoans today would like the comparison to Johannesburg.
This history should be familiar to those who know America’s past: real estate interests and others, including the federal and local governments, developed a system of racially-restrictive covenants, discriminatory mortgage lending practices, and other practices like blockbusting in order to limit where blacks and other minorities could live. When these techniques were struck down and fair housing laws became common by the late 1960s, whites responded by leaving many urban neighborhoods and moving to the suburbs.