By: Zainab Ali
Have you come across the term redlining before? Maybe you heard a politician or activist use it in their speech. But what exactly does it mean, and what is the history behind it as well as its impacts today?
The term redlining refers to the practice of banks denying mortgages to people based on group characteristics such as a person’s race and ethnic background! This practice started in the United States of America with the introduction of Franklin Roosevelt’s Housing Administration. This housing administration granted mortgage loans to primarily white people who lived in “green” areas but denied lending loans to foreign-born or people of colour from “red areas.”
This practice was introduced as a result of the 1933 housing shortage, which led the federal government to increase and segregate America’s housing stock explicitly. These federal government efforts were designed to mainly provide housing for the white, middle-class to lower-middle-class families. Many people of colour were left out of the new suburban communities and pushed into urban housing projects.
Additionally, the Federal Housing Administration (FDA) subsided builders, mass-producing entire subdivisions for white people. They also required that none of the homes be sold to African-Americans and other people of colour. When questioned about this practice, the FDA’s justification was that if African-Americans purchased homes in or near these suburbs, the property values of homes they were insuring and the white homes they were insuring would decline, and because of this, their loans would be at risk.
However, there wasn’t any basis for this FDA claim. Property values rose when homes in all or mostly white neighbourhoods were attempted to be purchased by African-Americans. This is because African-Americans were more willing to pay more for properties than white people since their housing supply was so restricted and limited their choices. So the justification that the FDA used wasn’t based on actual data or proof.
The practice of Redlining has contributed to long-lasting effects on wealth inequality since people who grew up in the red-zoned neighbourhoods struggled to build intergenerational wealth.
Furthermore, Canada has also seen redlining historically, and a prime and well-documented example is the story of Africville. Africville in Halifax was a small thriving Black Community that was forcefully displaced on the order of the municipal government. In 1964 the area was bulldozed down. But even before the destruction, the Black neighbourhood was segregated and disadvantaged by many levels of the government.
The practice of redlining still continues to exist in Canada as many immigrants and people of colour face discrimination from banks, landlords, developers, etc. Also, due to the lack of Canadian housing data related to race compared to America, it’s difficult to monitor this issue and its impact. The lack of data in many cases also makes practices of race-based housing discrimination harder to identify and regulate.
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