It happened in Chicago, New York, Los Angeles and Atlanta. In each of those cities at some point, I realized that if I lived in a neighborhood where the majority of residents looked like me, it was pretty much a guarantee that basic amenities — grocery stores, retail shops, lush green spaces and flourishing schools — were limited and home valuations were more likely to lead to unfair tax assessments.
This, we already know, is the result of decades of redlining, a process initially endorsed by the federal government in 1933 that allowed mortgage lenders and banks to legally deny Black Americans access to home loans. The 1968 Fair Housing Act banned housing discrimination, but almost 100 years later, we are still living with the effects and still struggling to find a resolution.
A true understanding of redlining goes much deeper than those ubiquitous color-coded maps that indicated the desirability and mortgage risk of a given neighborhood. Hidden in the details of how those maps came to be is a view into a federal government that relied on racial bias rather than hard data to rebuild the housing market after the Great Depression, said Todd Michney, historian and assistant professor at Georgia Tech, who has written several new papers on the topic.
The first maps were created in the mid-1930s by a division of the Home Owners’ Loan Corporation (HOLC) called the Mortgagee Rehabilitation Division. Michney spent six years combing through thousands of previously unexamined documents and correspondence from the men who worked in the division. They had big goals to invigorate the housing market and encourage large insurance investors to buy mortgages on the secondary market, Michney said, but his findings suggest that rather than having a clear strategy, the men were figuring it all out as they went.
Field agents, 13 in all, fanned out to cities and began building maps that designated areas as green, blue, yellow and red, which respectively ranged from the most desirable to the least desirable areas. The most desirable green areas were the neighborhoods where homeowners were believed to be the most likely to repay their loans while the least desirable red areas were believed to be at high risk for defaulting on their loans.
Only one Black neighborhood in the country — located in Savannah — was rated green. It was the only Black neighborhood in the country where local lenders succeeded in convincing HOLC not to downgrade it on the basis of race, Michney said. Five Black neighborhoods in North Carolina were rated yellow. The remaining Black neighborhoods in the country were all rated “hazardous” or red. Atlanta at the time had a population that was 34% Black and 29% of the city was rated red, according to Michney’s findings.
But correspondence from the field agents indicated that these maps didn’t match the data. Black homeowners repaid their mortgage loans at the same rate as white homeowners. “In some cities, there was a better record of repayment in the red neighborhoods than in the green neighborhoods. They were uncovering evidence along the way that showed their theories had no basis in reality,” Michney said. “Their whole purpose was to figure out who was more likely to repay their loans. They found that their theory wasn’t true, but they didn’t go back and question their assumptions.”
Instead the men plowed ahead, influenced by faulty beliefs that city neighborhoods experience a natural decline after 50 years as minority groups spread into neighborhoods — a fundamentally racist mode of thinking promoted by certain intellectuals of the era.
The maps themselves were developed out of public view, shared with industry insiders, and even then, only as training materials (none of the maps were handed over to outside entities, but many lenders created their own versions).
Michney believes HOLC did not set out to promote disinvestment in Black communities — the earliest versions of the maps had a separate category for Black neighborhoods outside of the four color schema — but their race-based assumptions would ultimately color the maps and set the stage for policies that continue to undermine Black wealth to this day.
Those same assumptions would eventually take root among the general public. “Even today, the average white homeowner thinks properties will decrease in value if Black people move into their neighborhoods,” Michney said. “We have to make sure we understand redlining better and that we understand the effects on policies.”
We also have to be vigilant in making sure that we hold lenders accountable, and we have to be more forward-thinking about strategies to eliminate racial segregation. “We need to put in place legislation that ensures people have access to credit on fair terms. We won’t be able to really remedy the effect of past discrimination unless we go further with something like reparations,” Michney said. “It is so important that we get our facts straight, and that is why I want to explain the details of how all of this was done.”
One remedy, still in the early stages, was inspired by the 2017 book “The Color of Law” by Richard Rothstein. The aptly titled New Movement to Redress Racial Segregation (NMRRS) is a national movement to organize everyday citizens who are ready to take the kind of action that can force the development of public and private initiatives that redress segregation.
Rothstein, in an introductory video this spring, said NMRRS will campaign to improve resources in low-income, segregated neighborhoods; prevent massive dislocation when those neighborhoods gentrify; create opportunities for Black residents to move to predominantly white neighborhoods if they choose; and press for policies that stabilize communities at risk for white flight.
Led by a steering committee comprised of civil rights advocates, real estate agents, religious leaders, nonprofits and more, NMRRS has the goal of raising $500,000 in funding to launch and operate a series of local organizing pilots. Already, the organization has hired a program development director, and the search for a national organizing director is underway.
Michney’s research offers us insight into the nuances of redlining’s history, and as that understanding deepens, so should our willingness to take action.
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