A fundamental element in the social dimension of US urban residential patterns is racial segregation (Massey & Denton 1998). One practice—that of redlining—was essential to establishing the racially segregated neighborhood structure which continues to persist in many cities (Rothstein 2017). During the 1930s through the postwar period the construction of homes across newly developing residential tracts, expansion of the federal highway system, and availability of low interest/low down payment mortgages underwritten by the Federal Housing Administration (FHA) and the Department of Veterans Affairs (VA) contributed to rapid suburbanization of the White middle class (Jackson 1987). Redlining – the denial of access to financial services such as mortgage loans or insurance for people living in minority neighborhoods, was a common practice during this important era in the development of the US urban system (Aaronson et al. 2017). Redlining was government sanctioned. Mortgage loans insured by the FHA were subject to redlining practices until 1962 when President Kennedy banned the practice by federal agencies (Executive Order No.11,063, 1962). Private lenders continued to redline areas without penalty until the Fair Housing Act of 1968 made it illegal (Department of Housing and Urban Development n.d.).

Redlining was one practice among several that created a system of inequitable access to credit, reinforcing economic and residential segregation (Shapiro 2004). While mortgage credit flowed to White families—allowing them to purchase new homes and build equity—families living in redlined areas were denied the same opportunity. People of color could not purchase properties in the newly developed suburbs, nor did they have sufficient access to credit to reinvest in their neighborhoods. The resulting low rates of homeownership are one factor that has continued to exacerbate the wealth divide between White and minority households (Bhutta et al. 2020). Decades of discriminatory lending practices by the FHA and VA cemented the segregated residential pattern of structural racism in US urban areas.

The most comprehensive source of maps delineating which neighborhoods would have been redlined are the Home Owners’ Loan Corporation (HOLC) residential security maps (Nelson et al. n.d.). The HOLC maps were created between 1935 and 1940 and documented neighborhoods in over 200 cities. As they created these maps, HOLC examiners relied upon information gathered from local real estate and lending professionals to complete standardized forms that comprehensively evaluated not only the site and location, structural condition, and past valuations of properties, but also the social and demographic make-up of neighborhoods (Winling & Michney 2021). The examiners used a four-tiered grading system in order to classify neighborhoods: a grade of “A” was reserved for the “best” neighborhoods, which were colored in green on the map—while the lowest graded areas received a “D,” or “hazardous,” rating and were shaded red. Neighborhoods with a population that was not of native-born European background were generally downgraded, and almost invariably a neighborhood with any African American presence received the lowest grade of “D”

While the HOLC itself refinanced loans in both White and Black neighborhoods in the period 1933-1936, before the residential security maps were completed, the FHA did practice redlining (Hillier 2003). An in depth study of FHA lending patterns and the HOLC maps in Baltimore, Greensboro, and Peoria found that “hazardous” graded areas received only 1.6%, 2.2%, and 1.2% respectively of all loans the FHA made in these cities between 1935 and 1940 (Fishback et al. 2021). High graded areas with “Best” and “Still Desirable” ratings received 67.3%, 53.1%, 73.9% of the FHA loans made during that period. Mortgage lending by the FHA favored new developments or neighborhoods that were graded highly on the HOLC maps and avoided “hazardous” neighborhoods.

Redlining denied access to financial services in neighborhoods, concentrating disadvantages and resulting in higher measures of social vulnerability today (Richardson et al. 2020). A key question in understanding the legacy of redlining in US neighborhoods is: Who lived in these neighborhoods in 2020? A spatial mismatch between historic neighborhood boundaries and current census tracts—the level at which many sources of data (i.e., demographic, health, etc.) is available—is a barrier to using HOLC maps in demographic research. To overcome this spatial mismatch and facilitate research on historic redlining policies, we used ArcGIS to create weighted redlining scores for 2010 and 2020 census tract boundaries, representing the degree of redlining within a tract. We then used the 2020 US Census Bureau data to determine:

1. How many people today live in the HOLC “D,” or “hazardous,” graded areas?
2. What is the demographic profile of “hazardous” areas contrasted with better graded “best” areas?
3. How many housing units are in “hazardous” areas?
4. What is the rate of vacancy for housing in “hazardous” areas?
5. Are there significant differences in the race/ethnic composition of “hazardous” areas compared to non-hazardous areas?

This new report updates our findings from the 2018 report and introduces an updated historic redlining score method which can be used with the Census 2020 tract boundary files.