The gradual lowering of the market value of the property is pictured by prominent real estate men well acquainted with the neighborhood for many years:
It is a positive fact, an economic fact, that any time a poor class of people moves into a neighborhood formerly occupied by people who had an earning capacity greater than that of the people moving in, there is depreciation. That is true whether Italians move in, or Poles, Negroes, Greeks, etc. If the people moving into the neighborhood earn less and have less than the people formerly living in that neighborhood, there is depreciation.
Between 1900 and 1910 a few Negroes moved into Wabash Avenue. The houses were very old and built close together, with few single residences. Negroes did not progress farther eastward in any large numbers because the next street was Michigan Avenue, probably the most select of all the streets in the area. With the pressure of increasing numbers and ascending economic ability urging them out of the congested, uncomfortable, and unclean dwellings west of State Street, Negroes could and would pay higher rents than the class of white persons to which the oldest houses would next descend. In 1912, in the area east of State Street, practically all of the original residents had gone, and few Negroes had come in. Real estate men estimate that generally natural depreciation proceeds at the rate of 2 to 2½ per cent a year. When Negroes first came into the area the buildings were at least twenty years old, and many were much older, representing at the lowest figure a very substantial depreciation.
There was another important factor in the depreciation of the area. In 1912 the old vice district west of State Street and immediately northwest of this area was broken up. The inmates numbered approximately 2,000 and were by no means confined strictly within the recognized limits. They moved into the nearest good houses available where they could continue to ply their trade clandestinely. They could afford to pay high rents, and numbers of real estate owners profited greatly by dealing with them. As many of these houses stood, they again yielded rents almost as high as when they were new. Cabarets, saloons, and amusement places packed the side streets, and buffet flats opened up in the residence blocks. Raids and prosecution, night visits from men who did not live in the district, called attention to the changed character of the neighborhood, and property values sank lower. Pressure from prosecuting agencies, as well as the attraction of better houses in less conspicuous neighborhoods, urged the vice element southward. This southward trend is indicated in the maps, facing pages [342] and [346], showing the environment of the South Side Negro.
While property in this area could be bought cheaply it was also possible to obtain proportionately high rents by placing Negroes or prostitutes in houses not rented to either class before. Negroes were always charged higher rents than were the whites who immediately preceded them.
The Juvenile Protective Association in 1913 made a study called The Colored People of Chicago and published it in a small pamphlet. Concerning the disposition of real estate men to profit in this way, the reports say:
... the dealer offers to the owner of an apartment house which is no longer renting advantageously to white tenants cash payment for a year's lease on the property, thus guaranteeing the owner against loss, and then he fills the building with colored tenants. It is said, however, that the agent does not put out the white tenants unless he can get 10 per cent more from the colored people.
The fact that for like quarters Negroes pay much higher rents than any other group in the city was discussed by the Chicago School of Civics and Philanthropy in a special study of housing for Negroes in 1911-12. The report says:
The explanation for this condition of affairs among the colored people is comparatively simple; the results are far-reaching. The strong prejudice among the white people against having colored people living on white residence streets, colored children attending schools with white children, or entering into other semi-social relation with them, confines the opportunities for residence open to colored people of all positions in life to relatively small and well-defined areas. Consequently the demand for houses and apartments within these areas is strong and comparatively steady, and since the landlord is reasonably certain that the house or apartment can be filled at any time, as long as it is in any way tenantable, he takes advantage of his opportunities to raise rents and to postpone repairs.
It was during this period that buildings could be easily purchased by Negroes. One white real estate dealer whose interests are almost exclusively in the area under discussion has purchased more than 1,000 such houses which he rents to Negroes. These buildings were not purchased from Negroes but from first, second, and third owners, and at a price much below the original value.