"In recent years a once obscure lending practice has become a touchstone for America’s understanding of its racist past and the reverberations it still has today. But new research complicates our understanding of the historic practice of redlining, where certain neighborhoods are cut off from lending for reasons of race and class. It did not quite work in the way that it is popularly understood.
In mainstream journalism, and political discourse, redlining is associated with the maps drawn up by the Home Owners Loan Corporation (HOLC). This New Deal-era institution was created to refinance extant loans for borrowers who were struggling during the Great Depression. In the late 1930s, the agency drew up color-coded maps that evaluated neighborhoods based on their presumed prospects, with those believed to have the worst outlooks drawn in red.
It has long been assumed that these maps, which covered most Black residents of American cities and roughly half of whites, guided lending and investment away from red areas and toward green and blue ones (which were almost all majority white).
But new research shows that the maps very probably did not guide private lenders or the Federal Housing Administration (FHA), which clearly engaged in racist lending practices all on their own. The HOLC, however, actually loaned widely in Black neighborhoods and other red-shaded areas.
“If you're trying to use the HOLC maps to tell us how federal policy influenced things, then that's the wrong set of maps,” says Price Fishback, professor of economics at the University of Arizona. “Some people have been doing these long-range studies and saying this was all FHA policy using the HOLC maps. They've been using various techniques that require you to explicitly look at these boundaries. But they're using the wrong boundaries.”
Although the two agencies were set up at a similar time, HOLC was a temporary program (it ceased operating by 1951) meant to help homeowners who were in danger through no fault of their own. The FHA didn’t interact with existing loans, but was tasked to build a new insurance program backing “economically sound” loans with lower interest rates and longer duration periods than was traditional at that time.
Fishback and his co-authors are not arguing that racist mortgage practices did not occur. But they are trying to disentangle the policy of the two New Deal-era mortgage institutions, one of which engaged in heavily anti-Black practices (the FHA) and the other of which did not (HOLC). This also means that the famous redlining maps issued by the latter agency do not reflect how discriminatory lending was put into practice."
I'm sorry, but any map and accompanying notes that says that black people, as well as Jews and Italians are an "infiltration" into any neighborhood, is what it is. This is a government entity that allowed a separate category for one race of people to be put on their checklist, in the same manner one would check off the presense of any undesirable feature, ie: flood zone, railroad tracks, major highway, Negroes. I do NOT buy Price Fishback and his cohorts' attempts to make HOLC less culpable than it was. Yes, the FHA was racist, but so was HOLC.
I also have a suspicion that if one looked at any loans or mortgages HOLC supposedly issued in redlined neighborhoods, they were not issued to minority or immigrant homeowners, but to investors buying swaths of property, which they either became the landlords of, or resold at a great profit to those within those communities that had the wherewithal to buy in the only communities that they were allowed to buy in.
Beautifully written....as always! I'll post on the "Designing History" LinkedIn page; please follow us too!
There has been some interesting clarification recently regarding the HOLC maps~
Redlining Didn’t Happen Quite the Way We Thought It Did, by Jake Blumgart, Governing Magazine, September 21, 2021.
https://www.governing.com/context/redlining-didnt-happen-quite-the-way-we-thought-it-did
"In recent years a once obscure lending practice has become a touchstone for America’s understanding of its racist past and the reverberations it still has today. But new research complicates our understanding of the historic practice of redlining, where certain neighborhoods are cut off from lending for reasons of race and class. It did not quite work in the way that it is popularly understood.
In mainstream journalism, and political discourse, redlining is associated with the maps drawn up by the Home Owners Loan Corporation (HOLC). This New Deal-era institution was created to refinance extant loans for borrowers who were struggling during the Great Depression. In the late 1930s, the agency drew up color-coded maps that evaluated neighborhoods based on their presumed prospects, with those believed to have the worst outlooks drawn in red.
It has long been assumed that these maps, which covered most Black residents of American cities and roughly half of whites, guided lending and investment away from red areas and toward green and blue ones (which were almost all majority white).
But new research shows that the maps very probably did not guide private lenders or the Federal Housing Administration (FHA), which clearly engaged in racist lending practices all on their own. The HOLC, however, actually loaned widely in Black neighborhoods and other red-shaded areas.
“If you're trying to use the HOLC maps to tell us how federal policy influenced things, then that's the wrong set of maps,” says Price Fishback, professor of economics at the University of Arizona. “Some people have been doing these long-range studies and saying this was all FHA policy using the HOLC maps. They've been using various techniques that require you to explicitly look at these boundaries. But they're using the wrong boundaries.”
Although the two agencies were set up at a similar time, HOLC was a temporary program (it ceased operating by 1951) meant to help homeowners who were in danger through no fault of their own. The FHA didn’t interact with existing loans, but was tasked to build a new insurance program backing “economically sound” loans with lower interest rates and longer duration periods than was traditional at that time.
Fishback and his co-authors are not arguing that racist mortgage practices did not occur. But they are trying to disentangle the policy of the two New Deal-era mortgage institutions, one of which engaged in heavily anti-Black practices (the FHA) and the other of which did not (HOLC). This also means that the famous redlining maps issued by the latter agency do not reflect how discriminatory lending was put into practice."
I'm sorry, but any map and accompanying notes that says that black people, as well as Jews and Italians are an "infiltration" into any neighborhood, is what it is. This is a government entity that allowed a separate category for one race of people to be put on their checklist, in the same manner one would check off the presense of any undesirable feature, ie: flood zone, railroad tracks, major highway, Negroes. I do NOT buy Price Fishback and his cohorts' attempts to make HOLC less culpable than it was. Yes, the FHA was racist, but so was HOLC.
I also have a suspicion that if one looked at any loans or mortgages HOLC supposedly issued in redlined neighborhoods, they were not issued to minority or immigrant homeowners, but to investors buying swaths of property, which they either became the landlords of, or resold at a great profit to those within those communities that had the wherewithal to buy in the only communities that they were allowed to buy in.
Perhaps so, I certainly have no particular expertise in the topic. Was Fishback familiar to you already? I had never heard of him.