Title: Redlining (1937- ) •
Headings: Redlining (1937- )
Redlining (1937- )
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Content: Redlining (1937- ) •
Redlining (1937- )
Redlining Map, Charlotte, North Carolina, 1935
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Redlining refers to a discriminatory pattern of disinvestment and obstructive lending practices that act as an impediment to home ownership among African Americans and other people of color. Banks used the concept to deny loans to homeowners and would-be homeowners who lived in these neighborhoods. This in turn resulted in neighborhood economic decline and the withholding of services or their provision at an exceptionally high cost. The origin of the term stems from the policies developed by the Home Owners Loan Corporation (HOLC) created in 1933 by the Franklin Roosevelt Administration to reduce home foreclosures during the Depression and then institutionalized by the 1937 U.S. Housing Act which established the Federal Housing Association (FHA). Federal housing agencies including the HOLC and the FHA determined whether areas were deemed unfit for investment by banks, insurance companies, savings and loan associations, and other financial services companies. The areas were physically demarcated with red shading on a map. In contrast, zones which were to receive preferential lending status were marked in green shading and intermediate areas in blue shading. Often these decisions were arbitrarily based on the area’s racial composition rather than income levels. While the practice was almost universal before 1968, the Civil Rights Act passed that year theoretically outlawed redlining. Nonetheless its impact was felt long after that date.