All men are equal, but their circumstances are not. America bears an ugly history of racial segregation in cities, mostly due to the practice of redlining. Lending companies and banks withhold mortgages and other loans from people who live in neighborhoods of certain ethnic makeups. In a perfect world, arbitrary factors such as race would not affect someone’s ability to buy a home. Unfortunately, we do not live in a perfect world. Even in our supposedly “progressive” nation, prejudice against people of color runs rampant. Though there has been a definite decrease in blatant redlining, subtle redlining remains a prevalent issue in society today. Redlining has not improved much over time- it has only transformed. Many blame the Home Owner’s Loan Corporation (HOLC) for the creation of redlining. Established in 1933 as part of the New Deal, this organization created the infamous color-coded Residential Security Maps. The color red was assigned to the highest-risk areas. From 1936 to 1940, HOLC
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Because white people made up a significantly larger percentage of the population than blacks or hispanics do, they had a greater effect on housing demand. When white people wanted to live somewhere, the property value increased. Therefore, it was more beneficial for companies to invest in areas wanted by whites (“Interview with Dalton Conley”).
Many different parties have roles to play in the lending process: potential homeowners; real estate agents; developers, speculators, and potential landlords; lending companies; and the government. Each of these groups could unintentionally or purposely be the source of redlining.
The attributes of potential homeowners- age, income, race, etc.- affect what sort of home they seek. They favor better quality neighborhoods, and are more likely to purchase a worse home in a better area than a better home in a less desirable place (Kantor and Nystuen,
Because white people made up a significantly larger percentage of the population than blacks or hispanics do, they had a greater effect on housing demand. When white people wanted to live somewhere, the property value increased. Therefore, it was more beneficial for companies to invest in areas wanted by whites (“Interview with Dalton Conley”).
Many different parties have roles to play in the lending process: potential homeowners; real estate agents; developers, speculators, and potential landlords; lending companies; and the government. Each of these groups could unintentionally or purposely be the source of redlining.
The attributes of potential homeowners- age, income, race, etc.- affect what sort of home they seek. They favor better quality neighborhoods, and are more likely to purchase a worse home in a better area than a better home in a less desirable place (Kantor and Nystuen,