Redlining:
The Map That Built the Wealth Gap

The Home Owners' Loan Corporation (HOLC), created by Congress in 1933 to refinance mortgages during the Depression, sent appraisers to 239 cities1 to map neighborhood investment risk. They used four grades — A (green, "Best"), B (blue, "Still Desirable"), C (yellow, "Declining"), and D (red, "Hazardous"). The determining factor for a D rating was not building quality, employment, or infrastructure — it was race. Any neighborhood with Black residents was automatically rated D regardless of its actual condition. The FHA Underwriting Manual explicitly instructed appraisers to mark down any neighborhood with "inharmonious racial groups."2

The maps were used by banks, the FHA, and the VA to determine where they would lend. Redlined neighborhoods were denied mortgage loans, home improvement loans, and business loans. Without access to capital, property owners could not maintain their buildings. Neighborhoods declined — producing the condition the maps had predicted through the mechanism the maps had created. Redlining was self-fulfilling prophecy enforced by federal policy.

The Fair Housing Act of 1968 made redlining illegal. The maps' effects were not reversed. A 2018 analysis by the National Community Reinvestment Coalition found that formerly redlined neighborhoods — mapped 80 years earlier — remained 74% non-white and had home values $156,000 lower3 than formerly green-rated areas in the same city. The segregation the maps encoded persists. The wealth the maps denied has not been restored.

The legacy runs further than property values. School funding in most states is tied to local property taxes — meaning that lower home values in formerly redlined neighborhoods produce lower-funded schools. A 2020 study found that formerly redlined neighborhoods are an average 2.6°C hotter in summer4 than non-redlined areas due to the deliberate absence of trees and green space. The maps made their neighborhoods hotter, poorer, and less educated — and those effects compound across generations with no intervention to reverse them.