Redlining was a practice by lenders and insurers of drawing boundaries on maps and then grading these boundaries based on assessed credit-worthiness of people living in those areas. Lenders deemed the red areas as “hazardous” and the area residents as “unworthy” of engaging in the mortgage process and homebuyer programs. Unsurprisingly, the areas outlined in red were neighborhoods of segregated Black Americans. While similar discriminatory practices had been employed before the 1930s, redlining became more systematic during the New Deal era after the establishment of the Home Owners’ Loan Corporation (HOLC) and the passage of the Federal Housing Administration.
As homeownership has been the primary way most American families have built wealth, being barred from the option and utterly removed from the process contributed greatly to the wealth disparity between Black and white Americans that we still see today. Upward mobility from poverty is attributable to three components: economic success, being valued in a community, and power and autonomy. Homeownership and the building of housing equity is one of the few paths the average person can take to fulfill these three pillars. Additionally, redlining has been linked to the current health disparity between Black and white Americans, as suppression of economic opportunity raises health issues like diabetes, hypertension, and early mortality due to heart disease.
As decades passed, the old, redlined areas were targeted for predatory policies like subprime and high-interest loans, contracts for deed to trick potential homebuyers, and the usage of eminent domain to take Black-owned residential and commercial properties to build highways. This means the impact of the initial redlining — which took place nearly a century ago — is still abundantly clear today. In 2018, research into the long-term effects of redlining showed that 74 percent of previously redlined neighborhoods were still low income; and 64 percent were considered neighborhoods with primarily Black and Latina/o residents. Furthermore, according to a 2022 study, people residing in historically redlined areas live in proximity to nearly twice the density of oil and gas wells, leading to higher air pollution and the cardiovascular disease, impaired lung function, anxiety, depression, and preterm birth that stems from this pollution.