What is Redlining?
The New Deal
In 1934, President Franklin Delano Roosevelt established the New Deal - a series of programs aimed at economic recovery during the Great Depression. Two of the programs focused on increasing homeownership by #1 insuring home loans and #2 financially supporting the development of new suburban neighborhoods. Those home loans, issued through the Federal Housing Act (FHA), were generally only given to white home buyers, resulting in Redlining. Additionally, the developments that received federal financial support during this time were subsidized under the condition that the homes could not be sold to Black home buyers, resulting in racist Covenants, Conditions, and Restrictions. Consequently, while these programs helped the economy, they also resulted in federally sponsored housing segregation. These federal practices, and many others, were reinforced at state and local levels – including here in San Leandro, where African Americans were intentionally excluded from buying homes and renting.
What is Redlining?
Today, the word redlining is often used as an umbrella term for many forms of racist housing discrimination. The term comes from maps the Federal government created for 142 urban areas across the country in 1934. Parts of cities were color-coded to identify where it was safe to insure mortgages. Red was the lowest rating, indicating areas too risky to insure loans. Green, (generally the newer, white neighborhoods) indicated areas ideal for home loans. The basis for determining the color of a neighborhood was predominantly racial makeup, along with income level and occupation of those living there.
The maps were part of a government home loan manual that stated: "incompatible racial groups should not be permitted to live in the same communities." To achieve this desired segregation, the government denied insured home loans to African Americans. The justification for this was the thought that Black residents caused property value to decline and, in turn, would hurt federal investments. Even though there was evidence that opposed this theory, without the ability to get a government insured loan, most African American families had to buy homes on contract - building no equity and not allowing for any type of financial or upward mobility.
Side Notes:
Asian Exclusion
The 1924 Immigration Act went beyond the 1882 Chinese Exclusion Act by excluding all classes of Chinese immigrants and restricting immigrants from other Asian countries including Japan. For Asian immigrants already in the U.S., this forced them to create a society of their own, living separate from the surrounding community. So, the Chinatowns and Japantowns that we now celebrate for their cultural heritage, were created because of systematic discrimination.
Home Ownership
The birth of the American, single-family ideology came from a government campaign to promote home ownership that started after World War I. The government viewed home ownership as a way to combat communism in the U.S. – if you “owned a home, you couldn’t be a Communist.” (Richard Rothstein, “Color of Law”)