Redlining
Home ownership—what a powerful dream! For Black Americans still grappling with the legacies of slavery, sharecropping, and Jim Crow, buying a house in the 1950s and 1960s meant moving from dependence on white landowners to economic independence and freedom.
But this dream was pursued amidst a housing system built on institutional racism—rife with discrimination, predatory lending, speculation, and outright corruption.
Cliff speaks explicitly about one such discriminatory practice, redlining. He’s referring to the policy of the Federal Housing Authority (FHA), who refused to insure mortgages in neighborhoods with more than a few Black residents. Mortgage companies followed suit, also refusing to lend to African Americans. Redlining mean that, for many African Americans, the only option for home ownership was to buy on contract—a choice that came with inflated fees and stringent eviction policies.
This is the context in which Cliff and his neighbors were being displaced from their neighborhood and told to go look for new homes.
Redlining continues today—in a new guise.
In 1977 the Community Reinvestment Act was passed. For many of its advocates the act was a victory for civil rights. It got rid of officially sanctioned redlining and instead required that a certain percentage of federally-backed loans went to minority and working class communities.
The result? Reverse redlining. Banks and lenders started specifically targeting low-income communities with high interest or predatory loans. During the subprime lending boom (1993-2007), families living in predominantly African American neighborhoods were given high interest loans at up to five times the rate of families living in primarily white neighborhoods
During the subprime lending boom (1993-2007) families living in predominantly African Americans neighborhoods were given these high interest loans at up to 5 times the rate of families living in primarily white neighborhoods. So, when the 2008-2014 mortgage bubble burst, Americans of Color were hardest hit.
But this dream was pursued amidst a housing system built on institutional racism—rife with discrimination, predatory lending, speculation, and outright corruption.
Cliff speaks explicitly about one such discriminatory practice, redlining. He’s referring to the policy of the Federal Housing Authority (FHA), who refused to insure mortgages in neighborhoods with more than a few Black residents. Mortgage companies followed suit, also refusing to lend to African Americans. Redlining mean that, for many African Americans, the only option for home ownership was to buy on contract—a choice that came with inflated fees and stringent eviction policies.
This is the context in which Cliff and his neighbors were being displaced from their neighborhood and told to go look for new homes.
Redlining continues today—in a new guise.
In 1977 the Community Reinvestment Act was passed. For many of its advocates the act was a victory for civil rights. It got rid of officially sanctioned redlining and instead required that a certain percentage of federally-backed loans went to minority and working class communities.
The result? Reverse redlining. Banks and lenders started specifically targeting low-income communities with high interest or predatory loans. During the subprime lending boom (1993-2007), families living in predominantly African American neighborhoods were given high interest loans at up to five times the rate of families living in primarily white neighborhoods
During the subprime lending boom (1993-2007) families living in predominantly African Americans neighborhoods were given these high interest loans at up to 5 times the rate of families living in primarily white neighborhoods. So, when the 2008-2014 mortgage bubble burst, Americans of Color were hardest hit.
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