The History of Redlining

The History of Redlining

I often find myself thinking about the history of racism in America and asking how that history could still be impacting the lives of Americans today. While it feels like we have made huge steps in addressing racism and in expanding economic and social opportunities for black and minority people in our country, we still have a long way to go, and the effects of our history of racism still plays a role in the world around us.
Homeownership is a great example of the way that historic racism still impacts the racial inequality that we see around us today. Matthew Desmond in his book Evicted does an excellent job showing how racist and segregationist policies influenced the homeownership and economic development of black people in the United States. He writes, “in the 1920s and ’30s, rent for dilapidated housing in the black ghettos of Milwaukee and Philadelphia and other norther cities exceeded that for better housing in white neighborhoods. As late as 1960, rent in major cities was higher for blacks than for whites in similar accommodations. The poor did not crowd into slums because of cheap housing. They were there – and this was especially true of the black poor – simply because they were allowed to be.”
For many Americans, a house is the most expensive thing they own and is their primary vehicle for wealth creation. Being able to purchase a home can set an individual up for a retirement, an inheritance to pass on to children and grandchildren, and can provide numerous other financial and social benefits for the individual and their family. The practice of redlining was a deliberate act of denying housing to black and minority individuals. Both homeownership and renting was limited, as Desmond’s quote shows, to certain neighborhoods and areas within cities for black people. They could not purchase homes in suburban areas, because banks would not lend to them for purchasing a home outside a redlined area. Real estate agents would not show black people homes in white neighborhoods. Landlords in white neighborhoods wouldn’t rent to black people.
From this segregation came the crowding of black and minority populations into city centers that were ignored and underdeveloped. Housing was limited in these areas, driving the price up for those who could not buy or rent in a cheaper white area due to racism. Black people could not build wealth, even if they became successful business people. They were stuck around low socio-economic status people, meaning their children could not connect with more wealthy individuals and network for future opportunities.
For decades after the Civil War, black people were intentionally denied access to the kinds of assets that allowed many American’s to get started on a path toward wealth generation for themselves and their families for generations to come. Not only were black people not able to purchase homes in good neighborhoods that would appreciate in value, they were denied affordable rent in white neighborhoods, paying more for worse quality housing in redlined areas. They were denied the opportunity to begin building wealth and to pass an inheritance along to their children while paying more for worse housing. When we see the wealth gap that exists between black and white people today, we can look back and see that redlining played a direct role in the creation and maintenance of that gap. Racial disparities that exist today often have deep roots that we cannot see if we don’t look closely to understand how the policies impacted the lives of those who could not build wealth and set their families up for future success.