I think the threat of race-based violence would have made this very difficult. One family, perhaps, but a little neighborhood? Not OK -- I'm thinking specifically about the Tulsa riots of 1921 and other racial violence (https://en.wikipedia.org/wiki/List_of_incidents_of_civil_unr...).
(Grew up in suburban Kansas and spent plenty of time hanging around towns like the fictional Gedanken.)
Iowa has a history of progressivism. For example in 1851 it was the second state to legalize interracial marriage. In 2009 it was the forth state to legalize same-sex marriage (and not through any change of the laws, the Iowa supreme court decided it was legal)
I know the culture I experienced was not pervasive in the whole midwest. I'm also not saying that there weren't bigots, but it was certainly very much different than a lot of other places in this country.
The white population was "down" to 98.9%
The census count for "black" in my county in 1920 and 1900 was 5. Not 5%, 5. It was 99.97% white.
It's a fact that people seem to have quite some trouble with. Much of the midwest is nearly entirely white (and at that a pretty narrow subset of northern europeans) because only a small set of people had any interest in settling there.