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"Shaker Heights was held out as a model city of encouraged integration and relative prosperity. What happened?"

What happened was the "inner-city" of Cleveland expanded into the "diverse" community.....

Loans were made to avoid "red-lining" lawsuits against lenders, and anyone (especially certain minorities) were given loans freely with no money down, and no background checks. Those that could (and most Shaker residents previously) moved out to more affluent suburbs, leaving the "Democrat voterbase" take the town....