What was the real cost of redlining — the federal government’s policy of blocking Black families from obtaining loans by assigning low mortgage security ratings to predominantly Black neighborhoods and color-coding them in red on maps.
In addition to fueling generations of dashed dreams and hampering upward mobility for millions, a report by Redfin said the practice that was outlawed in the 1960s remains a major factor in today’s wealth gap between Black and white families across the country.
Redfin’s report said the typical homeowner in a neighborhood that was redlined for mortgage lending by the federal government has gained 52 percent less — or $212,023 less — in personal wealth generated by property value increases than one in a greenlined neighborhood over the past 40 years.
“More than half a century after it was abolished, redlining continues to dictate the racial makeup of neighborhoods and Black families still feel the socioeconomic effects of such a discriminatory housing policy,” Redfin Chief Economist Daryl Fairweather said. “Black families who were unable to secure housing loans in the neighborhoods where they lived have missed out on one of the major ways to build wealth in this country. And even families who were able to buy homes in their neighborhood after redlining ended haven’t earned nearly as much home equity as people who bought homes in neighborhoods that were considered more valuable.”
There is no magic wand that can be waved to compensate for past discriminatory practices or to make people whole. However, it is
instructive to understand the past discriminatory barriers that prevented many from obtaining homeownership. If homeownership is part of the American Dream, we should all support programs that make that dream a reality for those who can afford it.