Information AboutRedlining |
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Redlining is the practice of denying or increasing the cost of services, such as . The term "redlining" was coined in the late 1960s by community activists in Chicago. It describes the practice of marking a red line on a map to delineate the area where banks would not invest. During the heyday of redlining these areas were most frequently minority Inner City neighborhoods. HISTORY OF THE PRACTICE Redlining began in the United States with the National Housing Act Of 1934 which established the Federal Housing Administration (FHA). In 1935, the Federal Home Loan Bank Board (FHLBB) asked Home Owners' Loan Corporation (HOLC) to look at 239 cities and create "residential security maps" to indicate the level of security for real estate investments in each surveyed city. In these maps many minority neighborhoods in cities were not eligible to receive loans at all. This meant that Ethnic Minorities could secure Mortgage Loan s only in certain areas, and it resulted in a large increase in the residential Racial Segregation and Urban Decay in the United States. Urban Planning historians theorize that the maps were used for years afterwards to deny loans to people in black communities by private and public entities. On the maps the most affluent areas, those considered desirable for lending purposes, were outlined in blue and known as "Type A". "Type B" neighborhoods were less well off and outlined in yellow. "Type D" neighborhoods were outlined in red on the map. Most of the Black Neighborhoods were characterized as "Type D" and were considered to be the worst for lending. Some redlined maps were also created by private organizations, such as J.M. Brewer's 1934 map of Philadelphia. The maps created by private organizations were designed to meet the requirements of the Federal Housing Administration Underwriting Manual. The manual encouraged lenders to consider these standards if they wanted to receive FHA insurance. FHA appraisal manuals instructed banks to steer clear of areas with "inharmonious racial groups" and recommended that municipalities enact racially restrictive zoning ordinances as well as covenants prohibiting black owners.''Principles to Guide Housing Policy at the Beginning of the Millennium'', Michael Schill & Susan Wachter, Cityscape "Racial" Provisions of FHA Underwriting Manual, 1938 Recommended restrictions should include provision for the following: The private sector fight against redlining is generally acknowledged as having been led by , 2007 . In a 1992 speech, President Bill Clinton called ShoreBank “the most important bank in America.”. SEE ALSO
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