Redlining is an old practice that has not gone away. It’s still a problem today. But what exactly is redlining, how did it get started, and why does it matter? This post will explore redlining and why it matters if you're looking for a home or investment property. We’ll also look at some examples of how redlining continues to affect communities in the United States today.
What Is Redlining?
Redlining denies or increases the cost of services, such as banking, insurance, access to jobs, health care, or even supermarkets, to residents, mainly racially determined geographical areas. The practice was used to deny loans to people living in poor neighborhoods—where they would be more likely than not to default on their mortgages if they tried to buy a house—forcing them into these neighborhoods and keeping them there for generations.
Like most American cities today (and globally), Detroit was once segregated by race. During World War II and up until 1968, when the Fair Housing Act took effect under Lyndon B Johnson’s administration (Congress passed it, but he signed it into law), it was common practice for housing developers looking for new locations for homes or apartments—or any development—to use redlining maps which outlined areas where banks would not make loans because of their perceived high risk for defaulting on those loans due primarily because those people were seen as “undesirable” customers who would not pay back what they had borrowed because they were less likely able than others due various reasons including income level differences between races —and also because many lenders thought that money invested into such properties wouldn't be profitable enough since there weren't enough jobs available locally so newly established businesses wouldn't have much business coming through their doors either.
Why Redlining Matters
We love that the Fair Housing Act works, but discrimination is still a problem in America. And it's not just about race—housing discrimination happens on various bases, including sex, family status (being pregnant or having children), disability, sexual orientation, and gender identity.
The FHA didn't end housing discrimination by itself. The law was a significant step forward for the country. But we can't forget how far we still have to go: housing discrimination affects people's lives daily.
Housing Discrimination is Illegal, Right?
The Fair Housing Act is a federal law prohibiting discrimination in housing sales, rental, and financing. Congress passed the act after years of campaigning by civil rights groups tired of landlords refusing to rent to African-Americans and other minorities.
The Fair Housing Act also has several other provisions, including:
- It requires that no person be subjected to discrimination because of race, color, national origin, religion, or sex when buying or renting a home;
- It bans discrimination in mortgage lending;
- It prohibits blockbusting -- attempts by real estate agents or developers to convince white homeowners that property values would decline if African Americans move into the neighborhood;
- It requires owners of federally-subsidized buildings built for first-time home buyers not to discriminate against applicants based on race;
How Redlining Affects People Today
While redlining was outlawed in 1968, its effects are still felt today.
- People of color. The Fair Housing Act was designed to stop housing discrimination against people who aren't white, but it hasn't been enough to get rid of that practice. The National Fair Housing Alliance recently released a report called "The State of Segregation" detailing how affordable housing options in some metropolitan regions have become even more segregated than they were before 1968—and whether you live in a predominantly white area or not, there's a good chance you'll be affected by this segregation.
- Low-income families and communities of color. Even if you're not African American or Hispanic yourself, it's possible that your children could be affected by these policies: according to research from Rutgers University and UCLA, children who grow up in racially diverse neighborhoods tend to do better academically than those who don't—and there are fewer options for integrated neighborhoods now than ever before!
- People with disabilities or special needs (both physical and mental). If you'd like your child with autism or Down syndrome to attend school within walking distance from home instead of taking him on public transit every day...you might run into problems finding suitable housing under rent control laws that restrict what landlords can charge tenants—mainly since many low-income families rely on these protections when searching for homes after moving into an area where rents have already skyrocketed thanks to gentrification caused by discriminatory practices like redlining!
How Segregation, Discrimination, and Redlining Impact Communities Today
Redlining is the practice of denying loans to people in specific neighborhoods or zip codes, and the Fair Housing Act outlawed it in 1968. But that doesn’t mean that redlining isn’t still happening today.
If you live in a predominantly non-white neighborhood, you are more likely than your white counterparts to be denied a home loan. If you live in an area where property values are on the decline, which happens in communities affected by segregation and discrimination—like those impacted by gentrification—you are less likely to get approved for a home loan than someone who lives next door with better credit scores and higher incomes (which makes sense since most banks make their money off mortgages).
This is reverse redlining: banks deny loans based on race or class instead of geography (i.e., redlining). This practice continues today despite its illegality because lenders have found clever ways around it: For example, when they lend money at higher interest rates because they assume minority borrowers will be more likely to default on their loans due to poor credit histories due solely to living conditions created by racism itself!
As we have seen, redlining is a vicious cycle affecting communities today. Even though it was made illegal in 1968, there are still ways for banks and other lenders to discriminate against people based on race and ethnicity. The Fair Housing Act was supposed to help solve this problem by prohibiting housing discrimination. Still, it didn’t do enough—and even today, some loopholes allow redlining to continue. For us as citizens to break free from the cycle of discrimination in our neighborhoods, we need strong laws like the one passed by Congress nearly 50 years ago and continued support from groups like National Community Reinvestment Coalition. They advocate for fair housing practices across America!