A

PAYTON, PHILLIP A., JR. 1876-

AFRICAN AMERICAN REALTOR

Getting a Start

Phillip A. Payton Jr. was born and reared in Westfield, Massachusetts. He received his education from Livingstone College in Salisbury, North Carolina, and went to New York in 1899 to seek his fortune. Payton's early jobs included being a handyman at six dollars a week, a barber, and a janitor in a real estate office. Intrigued by the boom atmosphere at the turn of the century, Payton entered the real estate business. In an interview he described his first break: "I was a real estate agent, making a speciality of the management of colored tenement property for nearly a year before I actually succeeded in getting a colored tenement to manage," he said, "My first opportunity came as a result of a dispute between two landlords in West 134th Street. To 'get even' one of them turned his house over to me to fill with colored tenants. I was successful in renting and managing this house, and after a time I was able to induce other landlords to … give me their houses to manage." In 1904 he organized the Afro-American Realty Company.

A Thriving Business

The Afro-American Realty Company had its beginnings in a partnership of ten blacks organized by Payton. The partnership specialized in acquiring five-year leases on Harlem property owned by whites and subsequently renting them to blacks. Incorporated on 15 June 1904, the company had an estimated capital of $100,000 and was permitted to buy, sell, rent, lease, and sublease real estate in New York City. At first the company had sound support from eminent members of the black community. By 1905 it had assets valued at $690,000 and controlled twenty New York apartment houses, of which six were owned and fourteen held on long-term leases. At its peak Afro-American Realty had leased or mortgaged some twenty-five houses, most of them in Harlem. The paper value of the property was __BODY__.1 million, with annual rental income of $114,500.

Promises to Keep

Payton, however, was under increasing pressure from stockholders in the company who were dissatisfied with his performance. He promised the average investor much more than he was able to fulfill. The prospectus for the Afro-American Realty Company offered profits of 7 to 10 percent, but weekly advertisements omitted the lower figure. Blacks were told that it was their obligation to support this enterprise, which would help end racial prejudice. Such advertising eventually led to Payton being sued by his investors.

Collapse

Because of Payton's speculations, overextension, and the recession of 1907-1908, the company was left with many new tenements, but few tenants. In an attempt to raise additional capital he wrote to Booker T. Washington for a letter of introduction to Andrew Carnegie. Washington refused to intercede, because Payton's business was not a philanthropic matter. Payton went to see Carnegie anyway but won no support. In a final gesture to keep the corporation in business Payton asked Booker T. Washington to underwrite the company's notes due on 1 January 1908. He refused, and the Afro-American Realty Company collapsed, losing all its properties.

Achievements

The Afro-American Realty Company played a significant role in opening homes for blacks in Harlem. Payton owned and managed apartment houses and brownstones in sections never previously rented to black tenants. When the company folded, the buildings were taken over by white owners, but the black tenants remained, laying the foundations of the most famous Negro neighborhood in America.