Jamelle Bouie of Slate describe the history of persistent racial discrimination in housing in America:
Hoyt, as chief economist of the Federal Housing Authority, wanted to improve the accuracy of real-estate appraisals so that an affiliated agency—the Home Owner’ Loan Corporation, established by the Home Owners’ Refinancing Act of 1933—could standardize the process for making mortgage loans, avoid undue risks, and bail out homeowners who lost their homes in the economic crash. Working with Hoyt at the FHA, the HOLC would map cities and divide neighborhoods into various risk categories that were based on his ethnic hierarchy and coded accordingly. A “green” neighborhood was white, affluent, Anglo-Saxon, and appropriately Protestant. A “blue” one had less desirable whites—Jews, Irish, and Italians—but was stable and upwardly mobile. A “yellow” one had undesirable, often working-class whites, and a “red” one was predominantly black or Mexican, regardless of wealth or class. And in these “redlined” areas, loans were either expensive or nonexistent, forcing families to rely on speculators and private sales by unscrupulous homeowners.
Under this system, whites had more flexibility in terms of where to live in a city or metropolitan region. If the individual or family were of the right stock, they could live anywhere in the "green" or "blue" neighborhoods. Additional benefits included access to mortgages, lower interest rates, and better neighborhood conditions (i.e., safety, amenities, better schools, and access to jobs). Under this system, whites are perceived as good neighbors aka the "norm") while blacks are perceived as bad neighbors (aka undesirables). Why do Americans accept this view as fact? It's due to an outdated racist housing policy developed by Holt and the FHA that still dictates racial residential patterns. As a result, race has become a proxy of neighborhood value. Bouie continues:
This is obviously racist, but it’s also unsurprising. As the Hoyt story shows, this discrimination is in the DNA of American real estate. For most of the last century, lenders and brokers—including national realtor organizations—used race as a proxy for neighborhood value. “Appraisal manuals,” writes Pietila, “continued to repeat Hoyt’s hierarchy until the 1960s … implying that the groups lowest on the ladder were detrimental to housing values.” These manuals also pushed realtors and homeowners to use private agreements—called covenants—that forbade sale to “undesirable” neighbors.
Though racial covenants and blockbusting are illegal today, realtors are using subtle racial methods to keep neighborhoods "white" via economics like gentrification, which can lead to displacement (long-time, low income residents are forced to move out because of rising rents). Low-income residents are forced to move further away to neighborhoods with fewer amenities and less transit-friendly.
A recent WBEZ article in Chicago revealed that there is no concentrated pockets of whitewhite poverty in Chicago. Yet the map easily points out concentrated pockets of black (and Latino to a lesser extent) poverty in Chicago. Low-income and middle-class whites left Chicago for the suburbs in the 1960s and 1970s when the rents began to increase. Blacks could not leave the ghettoes since racist realtors refused to grant mortgages for blacks to live in better neighborhoods. Thus, a century of racialized housing policy created the pockets of concentrated black poverty in Chicago. Blacks are not poor because they want to; it's because institutional policies isolated them to primarily the South Side of Chicago.