Residential Relocation
Throughout the 1950s and 1960s, urban renewal programs and Interstate Highway construction dramatically reshaped American cities and disrupted older neighborhoods. Urban renewal programs developed in the 1950s and 1960s mandated that demolished housing must be replaced with better housing units and that projects could not begin until some semblance of a guarantee that displacees had somewhere to go. The Interstate Highway Acts, however, lacked such requirements to replace housing (“The Human Problems in Relocation,” South Omaha Sun, 1 January 1961). Moreover, it was not until the 1962 Federal Highway Act that state governments were required to provide relocation assistance to displaced home- and business-owners which did not become effective until July, 1965 (Mohl, 680).
Along Interstate-480's two-mile, north-south route stood 300 family residences, ninety-four duplexes, forty-nine multi-family conversion units, thirty-two commercial businesses, seven apartment buildings, and at least one church. An estimated 500 to 600 additional families lived on land reserved for I-480’s north and south interchanges (“Interstate Timetable Still Big Question: State Officials Have No Omaha Answers,” South Omaha Sun, 5 February 1959). Although plans for Omaha's urban Interstates had been in the works since the mid-1950s, it was not until early 1959, a full year after the first public hearing was held and routes were finalized, when citizens became alarmed at the encroaching interstate. In April 1959, Nebraska highway officials announced they would begin surveying and appraising land for the urban routes of Interstate-80, Interstate-480, and their respective interchanges. By the end of that year, state officials commenced purchasing homeowners' properties. Initial construction began by the spring of 1960.
The process of assuming control of residential properties often was a muddled and unclear process from the perspective of homeowners in the Interstate's right-of-way. Citizens' concerns focused around questions of when will the Interstate come, when will property be purchased, will homeowners have time to move their families, and how long can individuals rent their property. Prior to April 1959, the state provided no estimated timeline for citizens expecting to move. City Planner Alden Aust recognized the problem property owners faced noting that “Many small property owners also have faced serious financial loss due to difficulty in renting property in the route of the highways, still others are handicapped in making needed repairs on their homes. . .and those who must sell their property for one reason or another generally sell at a sacrifice.” (“Interstate Timetable Still Big Question: State Officials Have No Omaha Answers,” South Omaha Sun, 5 February 1959).
In late July 1959, Reverend Neil Danberg, chairman of the Omaha Human Relations Committee, argued that the city needed to survey the then-estimated 700 families who expected displacement in the 28th Street corridor between Grover and Dodge Streets. Danberg told a city sub-committee on housing that families facing displacement “must know what housing is available in other sections of the city, and what they may expect to pay, either in rentals or purchase price.” Without surveying these families’ needs and coordinating with real estate interests, Danberg feared that families, “because they had no place to move, [would be] hanging onto their homes while the bulldozers were at [their] front door” (“Danberg: Need Housing Survey—Help Those in Interstate’s Way,” South Omaha Sun, 23 July 1959). FHA Director Russell M. Bailey, referencing an FHA program proposal for Omaha, explained that city surveying estimated 3,652 families would be displaced by inner-city highway construction (“Program for Interstate Displacement Readied—Home Loans to $11,500 Available,” South Omaha Sun, 31 March 1960).
In April 1960, as the state purchased and condemned the first rounds of homes in the Interstate’s right-of-way, city officials attempted to assure citizens that long-term Federal Housing Administration (FHA) loans could be secured for uprooted persons under a special section of the National Housing Act. These loans would provide government financing of single family residences up to 100 percent of the FHA’s appraised value at a maximum of $11,500. Displaced individuals who needed special loan provisions were required to apply to the city for eligibility certificates and, upon approval, could present them to lenders to make arrangements for a loan (“Program for Interstate Displacement Readied—Home Loans to $11,500 Available,” South Omaha Sun, 31 March 1960).
While the government guaranteed FHA loans geared toward low-income individuals, various stipulations rendered the loans impractical or out of reach to low-income families. FHA loans provided individuals federally financed guarantees, but even if they received FHA approval, citizens were still required to find a lender willing to lend to them. State FHA Director Russell M. Bailey explained to the South Omaha Sun that “the FHA is merely an insuring agency for home loans made by private capital. And, private investors will not finance mortgages of persons whose income is not considered enough to meet mortgage payments (“Mayor Urges Governor—Help Aged in Interstate Path,” South Omaha Sun, 17 March 1960). Without a bank willing to lend a family money, FHA loan approval was meaningless.
Bailey also feared that the amount of money that some families needed to borrow “may be too small to interest some of the companies. It will be the reverse of what should be expected.” Bailey added that the loan rates in 1960, although geared toward low-income individuals, were reported with combined interest rates of six to seven percent—comparable to conventional housing loans in Omaha (“Program for Interstate Displacement Readied—Home Loans to $11,500 Available,” South Omaha Sun, 31 March 1960). City officials admitted that some individuals in the interstate’s path, many of whom had once owned homes, would likely be relegated to rental properties after displacement.
By September 1960, few residing in the Interstate’s path were certified for FHA loans. State FHA Director Russell Bailey reported that City Hall records showed only twenty-two people had been certified to meet the requirements for special FHA terms. Yet there were 530 families in the path of I-480’s South Interchange and 451 in the Interstate corridor between 31st and Frederick Street to 29th and Harney Street, all of which were eligible under Omaha’s FHA program. Bailey suggested that much of this discrepancy could be attributed to a high number of displaced renters who moved to other rental units elsewhere (“Interstate Housing: No Rush So Far for Special Loans,” South Omaha Sun, 29 September 1960).
A comparison of 1960 and 1970 census tracts along the Sheelytown I-480 corridor ultimately showed a population loss of more than 5,000 residents and over 1,000 housing units (1960 and 1970 Housing Demographic Reports, “Census Tracts 33, 39, 40, and 41 in Omaha, Nebraska”). Differing circumstances shaped the experiences of those citizens who had to relocate out of the path of the Interstate. Factors determining one's ease of transition to new housing in similar or different neighborhoods typically broke down along lines of income and employment, age, married or widowed status, family size, and family savings.