"One Sunday morning in March 1949, a group of nearly 300 people, clutching deck chairs and sleeping bags, lined up to buy new homes in what had, until recently, been a stretch of potato fields in central Long Island. They hoped to move to "fabulous Levittown," as its developer, William J. Levitt, had branded his creation: more than 17,000 gleaming houses in an all-white community with freshly dug wells and newly paved roads."
"Selling bonds-essentially issuing buyers an IOU, plus interest-is a quick way for a government to raise funds. You, or someone you know, probably own a U.S. Treasury bond. But institutional investors-a mix of insurance companies, mutual funds, and private-equity firms-buy bonds too, including from local governments and school districts. Cities get money up front, and buyers are assured that they'll turn a profit; this win-win proposition made many postwar suburbs take the plunge into the bond market."
Levittown's developer built more than 17,000 uniform houses but provided little public infrastructure, leaving new leaders responsible for maintenance, trash, and schools. New suburban governments turned to municipal bonds to raise funds quickly, selling IOUs that institutional investors purchased. During the 1950s suburban expansion, school districts and local governments dramatically increased debt to finance growth. Credit-rating agencies assessed repayment likelihood unevenly, awarding lower interest rates to wealthier communities and saddling poorer towns with higher costs. The unequal municipal-bond market therefore reinforced and deepened economic and geographic inequality across suburbs.
Read at The Atlantic
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