Redlining [red-lahy-ning]: noun: a discriminatory practice by which banks, insurance companies, etc., refuse or limit loans, mortgages, insurance, etc., within specific geographic areas, especially inner-city neighborhoods.
The practice of redlining in cities across the United States, including Philadelphia, started with the creation of the Federal Housing Administration in 1934 and ended in 1968 with the Fair Housing Act.The Federal Housing Administration (FHA) created maps that ranked residential neighborhoods based on their desirability for further investment in a color-coded system. Often, higher ranks of “A” or “B” were likely to receive loans, while ranks of “C” or “D” were likely to be denied loans.
The FHA used various factors to differentiate rankings of zones, among which was the description of the kinds of people living in the area. Often, areas that were predominantly African American communities, or even immigrant communities, were ranked low on the scale. The common, but unstated, thought was that the arrival of African Americans and Immigrant in a community signaled the decline and ultimate demise of a neighborhood.
Often districts with a “D” ranking were primarily African American neighborhoods – and on maps they appeared as territories outlined in red, thus leading to the origin of the term “redlining”.
The creation of these maps was intended to help lenders determine areas that were better for investment. However, such maps promoted institutionalized discrimination by allowing lenders to deny services and opportunities to lower-income communities. The FHA cogently stated that individuals from low-ranking territories should not have been approved for loans. Consequently, this meant that African Americans who were just as eligible for loans as White Americans on paper were being denied because they resided in a “D” ranked territory.
The result of redlining in this way had a crippling effect on red-zone territories. Knowing that loans and mortgages were often denied to people in red-zones, builders and developers rarely created new buildings to replace the ones falling and crumbling apart. With the loss of buildings then came the loss of local business: In essence, access to banking, healthcare, retail establishments and even grocery stores all became limited. Moreover, with the declining state of neighborhoods, crime rates also increased – further perpetuating the idea that red-zones were not a good place for investment.
Evidently, the history of redlining has lingering effects on families of today. Families in these zones have lower family wealth or still don’t have down payments on their homes because they didn’t receive the loans they needed in the 20th century to secure housing.
Unfortunately, even though redlining was outlawed in the 1960s, subtle practices of redlining still exist today. Recently, in May 2015, the Department of Housing and Urban Development (HUD) settled a lawsuit with a Wisconsin bank that was suspected of discriminating against African American and Hispanic individuals when granting loans from 2008 to 2010. Though not explicitly stated, the activities of Wisconsin bank were seen as redlining since the bank denied plenty of loans to qualified individuals living in minority neighborhoods.
Moreover, a study conducted in 2013 also illustrated instances of “retail redlining” affecting communities within New York City. According to the article, this kind of redlining made it more difficult for poor black communities to receive proper healthcare.Some interesting research, including some done by scholars at Penn, discuss redlining in Philadelphia as well. Amy Hillier, in her article “Redlining In Philadelphia,” describes that one group of lenders, the Home Owners Loan Corporation (HOLC), actually made 62% of their loans to regions that, after the development of maps created by the FHA, were deemed red-zones. What is different in this situation is that HOLC was able to create their own security maps, as opposed to relying purely on those created by the FHA. Hillier’s research shows that that after HOLC created its own security maps, the relationship between loans made by HOLC and divestment from red-zone areas might actually be overstated.
Current attitudes towards different parts of Philadelphia are also linked to redlining of the past. The idea that, around Penn, walking past 42nd street is unsafe is just one example. In an article in Philadelphia Magazine, Malcolm Burnley wrote a piece discussing the connection between race, socioeconomic status and “Philadelphia’s most walkable areas.” In the article, he notes that “these [public recognition of walkable area] trends are less correlated with race and more with long-running discriminatory housing practices in cities across the country. It’s well-known that black Philadelphians have been pushed out of supremely walkable downtown areas over time, moving from Center City into North and West Philly.” Essentially, Burnley is saying that current ideas of what places are considered dangerous or safe to walk in are associated with redlining practices of the mid-1900s.
Redlining is a practice that has made such an impact on communities, including Philadelphia, that it still presents its own set of problems today. While this article cannot include the entire history of redlining and all the societal impacts its has made, hopefully Penn students will be able to learn the brief history of an issue that was faced by the community we are surrounded by every day.