Redlining

The practice of marking a red line on a map to delineate the areas where banks would not invest, sounds unreal. But it is real. Redlining is the practice of denying or increasing the cost of certain services such as banking, insurance, access to jobs and health care. Eventually this practice was applied to discriminate against groups of people, regardless of geography. Through the 1990’s banks would lend to lower whites but no to any black people who were even in the middle to upper class. Redlining began with the National Housing Act of 1934 which created the Federal Housing Administration. In the book, When Work Disappears: The World of the New Urban Poor written by William Julius Wilson he says that the federal government contributed to the decay of inner city neighborhood by withholding mortgage capital and making it hard for these neighborhoods to attract and keep families able to buy homes. This policy effectively made sure that African Americans could not secure mortgage loans. In 1935 the Federal Home Loan and Bank Board created “residential security maps” to show the level of security for real estate investments in each city that was surveyed by the Home Owners Loan Cooperation. The maps were made by assumptions about the community and not accurate information about an individuals ability to fit the lending criteria. These maps were also used years after by private and public companies to deny loans to black communities. The maps were conducted by mapping out 4 types. The newest areas, the ones most desirable for lending, were outlined in blue and were known as Type A. These areas were mostly the suburbs on the outskirts of the city. The neighborhoods that were “still desirable” were labeled Type B. The older, “declining” areas were labeled as Type C and were outlined in yellow. Type D were neighborhoods outlined in red and were most risky for mortgage support. These areas were older and it the center of cities also were mostly black neighborhoods. Redlining paralyzed the housing market, and lower property values. It encouraged landlord abandonment and the population density became much lower. The abandoned buildings would become only inhabited by drug dealers or addicts, eventually causing crime to increase.