Redlining: A history of racial discrimination in real estate
Channel: Help Open
Date: 2022-07-17

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What is redlining?
Cornell Law School defines redlining as "a discriminatory practice that consists of the systematic denial of services such as mortgages, insurance loans, and other financial services to residents of certain areas, based on their race or ethnicity."
While that alone meets the definition of discrimination, redlining ignores the individual's debt history or background, making the person's location the leading factor in approval or denial.
How did we get here?
The Great Depression nearly collapsed the United States economy, so the Home Owners’ Loan Corporation was created as a part of the New Deal in order to refinance home mortgages and make home buying accessible to struggling Americans.
The corporation created “residential security maps” to evaluate the loan worthiness of potential debtors, from the newest and safest zones to the declining and dangerous.
The Home Owners’ Loan Corporation developed four categories for neighborhoods: Type A (Best), Type B (Still Desirable), Type C (Definitely Declining), and Type D (Hazardous). The type D neighborhoods were considered too risky for investment, with property values almost certain to drop. These areas included most of the Black residents, blocking their access to mortgages and keeping them in declining communities.
This map from the Rand Corporation shows a clear divide between the “good” side of Oklahoma City and the “bad” side, with the monthly maximum temperature shaded in each neighborhood demonstrating lower quality living conditions for people in type D neighborhoods.
To make matters worse, racial covenants prevented Black residents from buying homes in many suburbs and new developments despite their financial qualifications. The difference in economic momentum has had lasting effects that remain to this day.
Why does it matter?
This map shows the neighborhoods defined by the Home Owners’ Loan Corporation as compared to the diesel particulate matter in the air across Baltimore, Maryland. People living in A-rated neighborhoods experience almost no exposure while people in D-rated neighborhoods have the highest exposure to diesel particulate matter, leading to negative health impacts.
This plot chart from the same source clearly illustrates the link between neighborhood classification and health risk from diesel particulates.
Developments following the implementation of redlining further segregated American cities, with a document from the Federal Housing Administration saying, “incompatible racial groups should not be permitted to live in the same communities.” The FHA proposed building walls in Detroit that would physically separate the residents of Black communities from others. The Underwriting Manual even suggested redlining Black neighborhoods next to highways to protect wealthier areas. 
Homeownership is the main source of generational wealth in middle-class families, but Black Americans were blocked from buying homes in new developments for decades. This has had such a dramatic and lasting effect that even after the passing of the 1968 Fair Housing Act, the homes are unaffordable to families that were previously limited. To this day, average Black incomes are about sixty percent of average white incomes.
What can be done about it?
My proposal for reversing the negative effects of redlining is two-fold:
Implicitly racist policies need to be reversed to stop the ongoing damage of redlining. That means voting for legal changes and political staff that are committed to racial equity.
Low-income areas need investment to bounce back and improve the lives of residents. This would look like rebuilding deteriorating facilities for quality high-density housing, subsidizing schools in poorer districts, and continuing to develop safe and efficient public transportation to these areas to reduce the dependence on personal cars.

References
Gross, T. (2017, May 3). A 'forgotten history' of how the U.S. government segregated America. NPR. https://www.npr.org/2017/05/03/526655831/a-forgotten-history-of-how-the-u-s-government-segregated-america 
McCarthy, N. (2022, April 19). Redlining. Legal Information Institute. https://www.law.cornell.edu/wex/redlining
Mackinnon, B., & Fiala, A. (2018). Ethics: Theory and Contemporary Issues (9th ed.). Cengage Learning.
RAND Corporation. (2022). Environmental racism: A tool for exploring the enduring legacy of redlining on Urban Environments. https://www.rand.org/pubs/tools/TLA1456-1/tool.html