REDLINING: WHAT IT WAS AND HOW IT'S STILL HURTING MINORITIES TODAY
Racial discrimination in mortgage lending in the 1930s shaped the demographic and wealth patterns of American communities today, a new study shows, with 3 out of 4 neighborhoods “redlined” on government maps 80 years ago continuing to struggle economically.
The study by the National Community Reinvestment Coalition, released Wednesday, shows that the vast majority of neighborhoods marked “hazardous” in red ink on maps drawn by the federal Home Owners’ Loan Corp. from 1935 to 1939 are today much more likely than other areas to comprise lower-income, minority residents.
“It’s as if some of these places have been trapped in the past, locking neighborhoods into concentrated poverty,” said Jason Richardson, director of research at the NCRC, a consumer advocacy group.
In the 1930s, government surveyors graded neighborhoods in 239 cities, color-coding them green for “best,” blue for “still desirable,” yellow for “definitely declining” and red for “hazardous.” The “redlined” areas were the ones local lenders discounted as credit risks, in large part because of the residents’ racial and ethnic demographics. They also took into account local amenities and home prices.
Neighborhoods that were predominantly made up of African Americans, as well as Catholics, Jews and immigrants from Asia and southern Europe, were deemed undesirable. “Anyone who was not northern-European white was considered to be a detraction from the value of the area,” said Bruce Mitchell, a senior researcher at the NCRC and one of the study’s authors.
Loans in these neighborhoods were unavailable or very expensive, making it more difficult for low-income minorities to buy homes and setting the stage for the country’s persistent racial wealth gap. (White families today have nearly 10 times the net worth of black families and more than eight times that of Hispanic families, according to the Federal Reserve.)
“Homeownership is the number-one method of accumulating wealth, but the effect of these policies that create more hurdles for the poor is a permanent underclass that’s disproportionately minority.
“I think most people believe the problem is not with the rules but with the people. Most middle-class whites in America don’t have empirical observations of what happens in underserved neighborhoods or understand the historical treatment of poor and minority communities.”
-John Taylor, president and chief executive of the NCRC, consumer advocacy group.
The Federal Housing Administration institutionalized the system of discriminatory lending in government-backed mortgages, reflecting local race-based criteria in their underwriting practices and reinforcing residential segregation in American cities. The discriminatory practices captured by the HOLC maps continued until 1968, when the Fair Housing Act banned racial discrimination in housing.
But 50 years after that law passed, the lingering effects of redlining are clear, with the pattern of economic and racial residential segregation still evident in many U.S. cities — from Montgomery, Ala., to Flint, Mich., to Denver.
Nationally, nearly two-thirds of neighborhoods deemed “hazardous” are inhabited by mostly minority residents, typically black and Latino, researchers found. Cities with more such neighborhoods have significantly greater economic inequality. On the flip side, 91 percent of areas classified as “best” in the 1930s remain middle-to-upper-income today, and 85 percent of them are still predominantly white.
Researchers found that redlined neighborhoods in the South and the West are more likely today to be home to a largely minority population. Neighborhoods in the South and Midwest display the most persistent economic inequality.
Nearly 70 percent of formerly redlined communities in Baltimore remain predominantly minority, as well as lower income. Even neighborhoods in western Baltimore that had been rated as “desirable” subsequently became populated with minority, low-income residents as middle-class whites fled to the suburbs, researchers said.
Longtime residents of formerly redlined neighborhoods are often pushed out when the areas’ economic fortunes are reversed, researchers said. Many can no longer afford the rising rents. Homeowners often can’t afford the increases in property taxes, and as their home values rise, many are tempted to sell and cash out.
“Is gentrification promoting sustainable desegregation? Or is it just a movement towards increased segregation in the next census period?”
Source: washingtonpost.com
Racial discrimination in mortgage lending in the 1930s shaped the demographic and wealth patterns of American communities today, a new study shows, with 3 out of 4 neighborhoods “redlined” on government maps 80 years ago continuing to struggle economically.
The study by the National Community Reinvestment Coalition, released Wednesday, shows that the vast majority of neighborhoods marked “hazardous” in red ink on maps drawn by the federal Home Owners’ Loan Corp. from 1935 to 1939 are today much more likely than other areas to comprise lower-income, minority residents.
“It’s as if some of these places have been trapped in the past, locking neighborhoods into concentrated poverty,” said Jason Richardson, director of research at the NCRC, a consumer advocacy group.
In the 1930s, government surveyors graded neighborhoods in 239 cities, color-coding them green for “best,” blue for “still desirable,” yellow for “definitely declining” and red for “hazardous.” The “redlined” areas were the ones local lenders discounted as credit risks, in large part because of the residents’ racial and ethnic demographics. They also took into account local amenities and home prices.
Neighborhoods that were predominantly made up of African Americans, as well as Catholics, Jews and immigrants from Asia and southern Europe, were deemed undesirable. “Anyone who was not northern-European white was considered to be a detraction from the value of the area,” said Bruce Mitchell, a senior researcher at the NCRC and one of the study’s authors.
Loans in these neighborhoods were unavailable or very expensive, making it more difficult for low-income minorities to buy homes and setting the stage for the country’s persistent racial wealth gap. (White families today have nearly 10 times the net worth of black families and more than eight times that of Hispanic families, according to the Federal Reserve.)
“Homeownership is the number-one method of accumulating wealth, but the effect of these policies that create more hurdles for the poor is a permanent underclass that’s disproportionately minority.
“I think most people believe the problem is not with the rules but with the people. Most middle-class whites in America don’t have empirical observations of what happens in underserved neighborhoods or understand the historical treatment of poor and minority communities.”
-John Taylor, president and chief executive of the NCRC, consumer advocacy group.
The Federal Housing Administration institutionalized the system of discriminatory lending in government-backed mortgages, reflecting local race-based criteria in their underwriting practices and reinforcing residential segregation in American cities. The discriminatory practices captured by the HOLC maps continued until 1968, when the Fair Housing Act banned racial discrimination in housing.
But 50 years after that law passed, the lingering effects of redlining are clear, with the pattern of economic and racial residential segregation still evident in many U.S. cities — from Montgomery, Ala., to Flint, Mich., to Denver.
Nationally, nearly two-thirds of neighborhoods deemed “hazardous” are inhabited by mostly minority residents, typically black and Latino, researchers found. Cities with more such neighborhoods have significantly greater economic inequality. On the flip side, 91 percent of areas classified as “best” in the 1930s remain middle-to-upper-income today, and 85 percent of them are still predominantly white.
Researchers found that redlined neighborhoods in the South and the West are more likely today to be home to a largely minority population. Neighborhoods in the South and Midwest display the most persistent economic inequality.
Nearly 70 percent of formerly redlined communities in Baltimore remain predominantly minority, as well as lower income. Even neighborhoods in western Baltimore that had been rated as “desirable” subsequently became populated with minority, low-income residents as middle-class whites fled to the suburbs, researchers said.
Longtime residents of formerly redlined neighborhoods are often pushed out when the areas’ economic fortunes are reversed, researchers said. Many can no longer afford the rising rents. Homeowners often can’t afford the increases in property taxes, and as their home values rise, many are tempted to sell and cash out.
“Is gentrification promoting sustainable desegregation? Or is it just a movement towards increased segregation in the next census period?”
Source: washingtonpost.com
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