Tuesday, April 28, 2015

The Legacy of Redlining in Baltimore: Using Credit to Curb Social Mobility


The housing crisis that plagues Baltimore City has gained national infamy. From its extensive coverage in The Wire to the estimated 46,000 vacant homes, the lack of adequate housing for residents has become an integral part of the City’s identity. But not every neighborhood is rife with foreclosure signs; Baltimore is a city of great inequality and has affluent areas with high median income and homeownership rates. Strong correlations between a neighborhood’s overall well-being and its racial makeup hark back to the practice of redlining, a form of institutionalized racism. While the era of government-sanctioned segregation may have ended, it appears that lines drawn decades ago remain distinct racial, social, and economic boundaries. Redlining refers to the common tendency of banks to refuse business loans and mortgages to individuals from certain localities or charge higher rates for them, rather than evaluating potential debtors by their assets and income. 

Redlining dates back to the Great Depression, when the national housing market was in shambles. In response, the federal government established the Home Owner’s Loan Corporation (HOLC) as part of the New Deal and charged it with increasing both home-ownership and employment rates.

Read more: http://www.jhupolitik.org/2015/01/06/the-legacy-of-redlining-in-baltimore-using-credit-to-curb-social-mobility/