Redlining

Redlining was a longtime practice by which banks refused to issue mortgages to African Americans for the purchase of homes in white areas. An example of systemic racism that is often overlooked (like blockbusting), the practice of redlining was a highly effective informal way of ensuring continued segregation without enacting strict (and legally challengeable) formal Jim Crow–type ordinances. The practice of redlining was widely utilized across the United States and was by no means exclusively a Southern phenomenon.

The term “redlining” comes from the way the practice was developed and employed. As lenders responded to the governmental dictates in determining who would be good risk and who would be more likely to default on loans, they literally took out maps, and, using red ink, identified the more desirable areas as well as those neighborhoods populated by people deemed a higher risk to default. The neighborhoods inhabited by those citizens deemed the greater risks were predominantly those inhabited by Black and Latino residents. As a result, banks and other mortgage lenders commonly rejected loans for creditworthy borrowers based strictly on their race or where they lived. As part of that practice, financial firms, real estate agents, and other parties demarcated geographic areas that were effectively off limits for issuing loans. Individuals living in those areas were denied mortgages and loans based not on a review of their individual circumstances but rather upon their race or residence under predetermined dictates based on those categorical determinations.

Quite simply, when they sought to buy a home, Black citizens were directed only to lower-cost areas, not even given the chance to look at homes that would in the long run have yielded a range of greater economic and social opportunities. It was also not something undertaken in isolation. In fact, redlining represented an intersection between purely racial concerns, financial ones related to the maintenance of property values, and school considerations, especially prior to court-ordered school desegregation. It was, in fact, one of a collection of practices that included racially restrictive covenants and “racial steering” by real estate agents, all of which were aimed at creating and maintaining racially segregated housing patterns.

While not limited to the South, redlining was a very common practice in Arkansas and was a major factor in what some historians have seen as the resegregation of the state’s urban areas, most especially Little Rock (Pulaski County). Indeed, numerous studies reveal that the housing patterns in Arkansas, especially in Little Rock, show more segregation in the twenty-first century than existed in the immediate aftermath of World War II—and redlining, in conjunction with federal housing polices of the period, is a large part of the reason.

Beginning with the enactment of the Federal Housing Act of 1949, housing practices and patterns began to change. Especially with urban renewal projects of the 1950s and 1960s upending existing Black neighborhoods, redlining became a means of creating—or maintaining—racially homogenous neighborhoods. Specifically, the practice was used to prevent those dislocated Black families from moving to the developing white suburbs, places whose creation was being fostered by the construction of highways that connected the sprawling suburbs that were developing to the north and west to the city. Instead, the city’s relocated Black residents were directed to the more isolated east and south. While redlining was not the only factor, it played a substantive role in an effort that by all accounts represented a conscious approach to influencing the city’s housing patterns.

Reports indicate that redlining in Little Rock was intended to keep the city divided in a social, racial, and geographical manner. While redlining became an increasingly common part of the home-buying process following the New Deal’s creation of the Home Owners’ Loan Corporation (HOLC), the federal program put the onus on local authorities to divide their cities according to the local citizens’ ability to pay off any loans that were granted, as well as to make credit determinations. While such decisions were intended to be made according to data-driven financial information, in reality, the program allowed local officials to make those judgments in ways that would serve their racial and social goals. The result was that redlining consigned the city’s Black homebuyers to specific areas and ended up segregating the city to a degree beyond where it had been before the HOLC was established.

The passage of time and subsequent studies have revealed some additional and perhaps unanticipated results of the practice. First, and not necessarily a surprise, is the role of redlining in the increased cycle of inequality. The impediment to a full range of housing options has been shown to impact the ability of minority and low-income homeowners to build equity in their homes and businesses, which were themselves already impacted by the redlining in those areas. The lending practices that resulted from redlining led to higher interest rates for those who ultimately sought to move into better areas once the illegal practices had been outlawed, or remained in their homes with their declining property values. Another result is the fact that studies have shown that across the country, in a study of over 100 cities, neighborhoods that had been redlined were on average five degrees hotter than those who had received favorable mortgage treatment; in some cases, the difference was as high as twelve degrees. The developments to which those who had been redlined were consigned tended to have fewer trees and parks but more paved areas while also being closer to highways and asphalt lots that absorb and radiate heat.

While officially banned, the practice of redlining continues to leave an imprint on communities and individuals decades later.

For additional information:
Kirk, John. “The Roots of Little Rock’s Segregated Neighborhoods.” Arkansas Times, July 10, 2014. Online at https://arktimes.com/news/cover-stories/2014/07/10/the-roots-of-little-rocks-segregated-neighborhoods (accessed November 17, 2021).

———. “Urban Revival: Renewing Segregation.” The Road from Hell Is Paved with Little Rocks. University of Arkansas at Little Rock. https://ualrexhibits.org/desegregation/political-action-and-reaction/renewing-segregation/ (accessed November 17, 2021).

“Little Rock, Arkansas.” Mapping Inequality: Redlining in New Deal America. https://dsl.richmond.edu/panorama/redlining/#loc=12/34.751/-92.368&city=little-rock-ar (accessed November 17, 2021).

Semuels, Alana. “How Segregation Has Persisted in Little Rock.” The Atlantic, April 27, 2016. https://www.theatlantic.com/business/archive/2016/04/segregation-persists-little-rock/479538/ (accessed November 17, 2021).

William H. Pruden III
Ravenscroft School

Last Updated: 11/17/2021

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