(Image Credit: Mapping Inequality)
“Redlining destroyed the possibility of investment wherever black people lived.”
-Ta-Nehisi Coates, national correspondent for The Atlantic
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Redlining began when government officials outlined select areas of neighborhood maps different colors to show where it was safe for banks to mortgage. In order for lenders to receive FHA insurance, they had to adhere to FHA standards which were only to mortgage green, secure neighborhoods. Areas colored green were considered secure to insure while red areas were seen as dangerous to mortgage.
“The term ‘redlining’ refers to the practice of using a red line on a map to delineate the area where financial institutions would not invest.” |
(Image Credit: Trinity College Digital Repository)
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“Districts were generally redlined on the basis of the racial and ethnic composition.”
-Gabrielle Jackson, a researcher for the Fair Administration Law of Justice at the University of Pennsylvania
"Call me paranoid, but that sure looks like redlining from here."
(Image Credit: Illinois Periodicals Online)
However, a grade could fall even if there weren’t people of color living directly in the district. An area in Richmond, Virginia known as area C4 was graded C, primarily because there was a predominantly black area nearby with a D grade. Another area in Richmond was downgraded because the white children had to pass through area C4 in order to get to school. The more exclusive a neighborhood was towards people of color, the higher the grade was.
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“Black people were viewed as a contagion. Redlining went beyond FHA-backed loans and spread to the entire mortgage industry, which was already rife with racism, excluding black people from most legitimate means of obtaining a mortgage.” 
Areas C4 and D8 in Richmond, Virginia.
(Image Credit: Mapping Inequality)
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“A change in social or racial occupancy generally leads to instability and a reduction in values.”
-The 1936 FHA Underwriting Manual
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The FHA justified redlining by claiming that if banks insured black Americans’ purchases of homes, then their overall home values and sales would decrease.
“The lines they helped draw, based in large part on the belief that the presence of blacks and other minorities would undermine property values, altered what would happen in these communities for years to come.” |
“When African-Americans tried to buy homes in all-white neighborhoods or in mostly white neighborhoods, property values rose because African-Americans were more willing to pay more for properties than whites were simply because their housing supply was so restricted and they had so many fewer choices. So the rationale that the Federal Housing Administration used was never based on any kind of study.” |