Redlining is a term that many people have heard but might not know the specifics of. Simply put, redlining is the systematic discrimination of certain groups of people in areas like housing and mortgage lending. This practice has a long and troubled history, and it continues to affect minority communities to this day. In this blog post, we will explore redlining, how it works, and its effects on generations of Americans.
What is Redlining?
Redlining is a term that was coined in the 1930s by John McKnight, a sociologist from Northwestern University. He used the term to describe the practice of banks and other financial institutions drawing lines on maps to depict which areas they reviewed as too risky to lend money in. These “redlined” areas were on average neighborhoods that were home to minority groups like African Americans, Latinos, and Asians.
In practice and theory, redlining is discriminatory and illegal. The goal of redlining is to put financial and other services, including loans, mortgages, and insurance, out of reach for certain people in certain areas. This hampers these people from buying homes and owning businesses in these places. The areas in all likelihood to be redlined are black inner-city neighborhoods and those that are considered “slums” or have a high crime rate. Despite that, these classifications are time and again arbitrary and based on outdated or faulty information.
The History of Redlining
Redlining has its roots in the early 20th century when the US government began to insure loans made by banks. The government did this to inspire lending and help people buy homes. However, these policies had the inadvertent consequence of enabling banks to discriminate against particular groups of people.
In 1934, the Federal Housing Administration (FHA) was created. The FHA’s job was to insure mortgages, which made them much less risky for banks. This allowed banks to lend money to people with lower incomes and credit scores. However, the FHA’s guidelines for lending were based on race. They specifically stated that loans should not be made in “residentially unstable or declining neighborhoods,” normally minority neighborhoods.
The effects of redlining are still being felt today. Studies have shown that minorities living in redlined neighborhoods are more likely to be denied loans and insurance and often pay higher interest rates when they can get financing. This has led to a cycle of disinvestment in these communities, as property values decline and families are compelled to move.
Redlining is a complicated issue with a long history, but minority communities across the country are still feeling its effects. For renters, redlining can make it difficult to find affordable housing. For homeowners, it can mean higher interest rates and insurance premiums. And for everyone, it can lead to further disinvestment in already-struggling neighborhoods.
If you feel that redlining has hurt your ability to find affordable Fort Worth housing, some organizations can help. The National Fair Housing Alliance is a good resource for finding housing counselors and legal assistance. Remember, you have rights, and redlining is illegal. With knowledge and resources, you can fight back against this discriminatory practice.
It is also important to rent from an estimable company that does not tolerate illegal practices like redlining. Real Property Management 360 is committed to fair housing and equal opportunity for all renters. We believe that everyone deserves a safe and affordable place to call home. Talk to one of our Fort Worth property managers to learn more about our properties and how we can help you find the perfect rental home. Or, you can browse our listings online.
We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.