In 1938, federal policy guidance suggested that "insofar as it is practical, it is desirable that the Greendale population be representative of the population of Milwaukee County, the selection area." The projections suggested that there be 52 one-bedroom homes, 230 two-bedroom homes, 272 three-bedroom homes, and 18 four-bedroom homes. The guidance suggested consideration in terms of having different Protestant, Catholic, and Jewish faiths represented proportionately as well as balancing the public/parochial school attendance reflected in the county. It also suggested that if Greendale reflected the racial demographic of the county, there would be 11 African American families among the village's initial 572 tenants in 1938, but indicated that this characteristic would be of "doubtful significance" to the tenant selection committee. Only white families were selected to be able to rent homes in Greendale.
Even as more African Americans moved to Milwaukee in the 1940s, Greendale remained racially segregated. Whites in the suburbs were given opportunity to have better living conditions, and had better access to schools. Interstates were built by tearing down African American homes, yet African Americans were prevented from getting mortgages from redlining even as they were kept from moving to other parts of the city or suburbs by other means. Not being able to buy homes also meant that they couldn't build equity leading to generational wealth like Greendale residents could.
In 1968, a Housing Committee encouraged the village trustees to pass ordinances prohibiting discrimination and to pass an open housing ordinance that would be stronger than the state law with its many loopholes. The Housing Committee attempted to persuade the village trustees by presenting a "faith in open housing" pledge signed by 1,000 Greendale residents. Faith leaders, including Greendale Community Church's Pastor Robert W. Horat, talked about open housing to their communities. Boston Store, newly coming to Southridge Mall, pledged its support for open housing.