To understand racism in America, one must first disabuse themselves of the idea that race is a social construct—an idea that has been created and accepted by the people in a society.
Money is a social construct. We accept the idea that a dollar issued by the U.S. government is worth more than Monopoly money. Even if our currency were backed by gold, the precious metal is only valuable because we have collectively agreed to its worth. The American idea of race, specifically whiteness, is an economic construct. From the beginning, it has existed in conjunction with trade, ownership and the laws of supply and demand.To see how the government-sanctioned policy of redlining impacts America 80 years after it was instituted, one must first understand the era in which the policy originated. In the mid-193os, to lift America out of the Great Depression, the New Deal created huge economic programs sponsored by the federal government.
These are the policies that essentially built what we now know as the middle class. Programs like the new Social Security Administration gave people financial security, the Works Progress Administration gave people jobs, and the Home Owners’ Loan Corporation (HOLC) refinanced mortgages at low interests rates to prevent foreclosures.
To ensure that these mortgages were not risky, the HOLC created color-coded “residential security maps” of 239 cities. The maps essentially highlighted the neighborhoods that were good investments versus neighborhoods that were poor investments. The “risky” neighborhoods were highlighted in red, including every one of the 239 cities’ black neighborhoods.
We must remember that, because everyone was poor during the Great Depression, these maps did not reflect economic status. In fact, upscale black neighborhoods like LaVilla and Sugar Hill in Jacksonville, Fla., home to Duke Ellington, Ella Fitzgerald, and Zora Neale Hurston, were deemed “too risky,” by the HOLC.
But instead of using these maps only for HOLC refinances, which would have been racist in and of itself, banks began using these maps for all home purchases and refinances. Again, with Jim Crow segregation in place, blacks couldn’t simply move to the non-redlined, white neighborhoods. So, because of this, as generations of Americans lifted themselves out of poverty, black people could not take part in the primary driver of wealth, homeownership.
Redlining was outlawed in 1968 by the Fair Housing Act, but it still affects almost every economic aspect of black communities to this day.
The University of Richmond has compiled high-resolution images of the original redlining maps, and it is startling to see how much they reflect the racial, economic and wealth disparities in cities across America.
Residents who live in redlined areas pay higher interest rates and are denied mortgages more often than whites with the same credit and income, according to reporting for the Center for Investigative Journalism. People in redlined areas pay higher auto insurance rates, ProPublica reports. Homes in black neighborhoods are valued, on average, $48,000 less than homes in white neighborhoods with similar crime rates and amenities.