Palo Alto: A History of California, Capitalism, and the World Highlight

In the late 1940s, a group of middle- and working-class residents called the Peninsula Housing Association of Palo Alto bought an undeveloped ranch near Stanford and planned to build a co-op subdivision with hundreds of houses as well as common spaces. But 2 percent of the first 150 families were black, which meant the feds wouldn’t insure building loans, which meant banks didn’t issue them.25 On policy, Bank of America and others didn’t make construction loans the FHA refused to back, even if it was a very good investment, like a 260-acre subdivision next to Stanford in 1948. The association gave up and sold the land to a developer that agreed to the FHA’s conditions: whites only.