By Jordan Green
TIPP CITY — The Tipp City Public Library hosted a panel on June 14 discussing the Undesign the Redline exhibit that had been on display for the past few months.
The panel was led by Tom Cochran, an attorney and former teacher at Tippecanoe High School and featured Mark Willis, director of the Hall Hunger Initiative, Amy Riegel, executive director of the Coalition on Homelessness and Housing in Ohio, and Dr. Todd Uhlman, associate professor of History from the University of Dayton.
What is redlining?
Redlining is defined as, “discriminatory practices by banks or other financial services by denying credit or other financial services to consumers because of their racial demographics,” said Uhlman.
After the Great Depression, the Federal Government began to take a more hands on approach to the economy. A series of policies designed to jump start the country were put into place under President Roosevelt known as the New Deal.
In 1934, the federal government passed the National Housing Act and, with it, created the Federal Housing Administration. The goal was to increase homeownership in the United States by insuring mortgages through the federal government.
To “minimize risk” the Federal Home Loan Bank and the Home Owners’ Loan Corporation created what they called “residential security maps.” Neighborhoods in over 200 cities were mapped into four categories from least to most risky for the banks.
However, this was during a time of segregation in the United States. Wealthy neighborhoods often excluded minorities and became what was known as “Sundowner Towns.” Towns like these, such as Tipp City during the time, used police intimidation, policies, and harassment to prevent minorities from living in the city or neighborhood. Thus, preventing African Americans from living in wealthier areas and restricting them to city centers or localized communities.
As the Home Owner’s Loan Corporation began to create their residential security maps, they divided neighborhoods into four distinct risk groups, Types A through D. Type A was outlined in green and meant the area was very low risk for a mortgage. Type D was outlined in red (hence redlining) and was a sign to banks to not give mortgages to people living in this area and who wanted to buy homes in this area.
The caveat with type D is that the redlined areas were predominantly African American.
This had the effect of institutionalizing race-based discrimination in crediting in the United States. Any private organization who wanted the federal government to insure their mortgage loans needed to follow the Federal Housing Administration’s guidelines, which included abiding by the residential security maps.
As an effect of this policy, between 1945 and 1959 only 2% of mortgage loans went to African Americans.
“Homeownership is one of the most significant sources of generational wealth in America,” said Regal.
And with these policies, African Americans were systematically excluded from homeownership and forced into a cycle of poverty that would have effects for generations to come.
What are the effects of redlining today?
Redlining was ended as a practice in 1977 by the Community Reinvestment Act — nearly a decade after the Fair Housing Act of 1968 that was intended to disrupt the practice. But the effects still linger today.
“Redlining erected pathway of disinvestment into Dayton [and other redlined communities],” said Regal.
As banks systematically excluded these neighborhoods from loans, the property values continued to decline. This had a muti-pronged effect of increasing poverty.
First, as property taxes go down, services funded by property taxes lost revenue. This includes schools, hospitals, and emergency services like police, fire, and EMTs. As funding for schools declined, children from these areas lost the economic mobility that comes from receiving a quality education.
Dayton, which was heavily redlined and is one of the most segregated communities in the country today, “consistently has the worst, or second worst, school district in the country,” said Regal.
Lower property values also had the effect of factories and other pollution emitting businesses moving into these redlined areas. This creates worsening health conditions in the area coupled with lower funding for hospitals.
Another modern effect is food density.
“If you look at a redlining map from the 30s and compare that with a food desert map today in the Dayton area, they overlap,” said Willis.
A food desert is an area that has limited access to affordable and nutritious food.
These areas have high rates of poverty because of generations of denied financial services and decreasing property values and social services. Companies are incentivized by market economics to avoid these areas. Less money in the hands of consumers means less profits for the company.
Unhealthy eating habits arise from a lack of access to cheap, nutritious food and cause obesity, which increases the risk of heart disease and diabetes.
Another effect is the modern form of redlining. Most banks do not offer mortgage loans at a principal lower than $50,000. In neighborhoods that were classified as type D, a lot of the property values have continued to go down.
“In Springfield, in this former type D neighborhood here, you can buy a home for $20,000. But nobody is going to give you a mortgage for $20,000, you have to pay cash,” said Regal.
In effect, access to financial services is still being denied to these neighborhoods, now on the basis of the conditions those same redlining policies created.
What can be done?
“In a sense, we need to get the word out,” said Uhlman. The presenters explained people need to talk about the effects these policies are still having on communities, so governments are pressured to act.
Another way to reduce these effects is “inclusionary zoning requirements for low-income housing,” said Regal.
Inclusionary zoning would create properties for low-income families to buy and live. Over time, property values would increase and help bridge the wealth gap in the country while providing access to economic opportunity for low-income families.
Most current low-income housing are one- and two-bedroom apartments. Creating single family homes with a high population density (duplexes, stacked homes) gives space for families to grow and live as opposed to being restricted by space.
Food deserts can be combated in a variety of ways. Community gardens offer cheap access to healthy food and encourage community involvement. Public transportation from food deserts to markets where healthy food is available increases access. And supermarkets and food retailers can be incentivized to open in food deserts through changes in the local tax code.
The redlining exhibit will continue to move around the Dayton area.
For more information on redlining and its’ effects check out these links: