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Fund for an OPEN Society |
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because separate can never be equal. |
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Redlining |
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Redlining was the by far the most significant mechanism used to create and sustain segregation. According to Denton and Massey: |
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...beginning in the 1930s, the federal government launched a series of programs designed to increase employment in the construction industry and make homeownership widely available to the American public. The Home Owners' Loan Corporation (HOLC) was the first of these programs, and it served as a model for later efforts.... Unfortunately for blacks, the HOLC also initiated and institutionalized the practice of "redlining." This discriminatory practice grew out of a rating system HOLC developed to evaluate the risks associated with loans made to specific urban neighborhoods. Four categories of neighborhoods were established, and lowest was coded with the color red; it and the next-lowest category virtually never received HOLC loans. Black areas were invariably rated as fourth grade and redlined. [These practices] lent the power, prestige, and support of the federal government to the systematic practice of racial discrimination. In the 1930s and 1940s banks used the HOLC maps to make their own loan decisions. Thus HOLC not only channeled federal funds away from black neighborhoods but was also responsible for a much larger and more significant disinvestment in black areas by private institutions. By far the greatest effect of the HOLC rating system, however, came from its influence on the underwriting practices of the Federal Housing Administration (FHA) and the Veterans Administration (VA) during the 1940s and 1950s. These loan programs together completely reshaped the residential housing market of the United States and pumped millions of dollars into the housing industry during the postwar era. Loans made by the FHA and the VA were a major impetus behind the rapid suburbanization of the United States after 1945... the marriage of FHA financing and new construction techniques made it cheaper to buy new suburban homes than to rent comparable older dwellings in the central city. As a result, the FHA and VA contributed significantly to the decline of the inner city by encouraging the selective our-migration of middle-class whites to the suburbs. "In evaluating neighborhoods, the agency [FHA] followed the HOLC's earlier lead in racial matters; it too manifested an obsessive concern with the presence of what the 1939 FHA Underwriting Manual called “inharmonious racial or nationality groups." According to the manual, "if a neighborhood is to retain stability, it is necessary that properties shall continue to be occupied by the same social and racial classes." |
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We are living with the results of these programs today: white suburbs spreading further from the city centers, and African American and other minority neighborhoods which are still feeling the effects of the redlining which deprived them of home loans and economic development capital. |
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Contact Us
Email: open@opensoc.org NJ Office: 973.821.4198 PA Office: 215.546.0511 |
