“In Chicago, lenders have invested more in a single white neighborhood than all the Black neighborhoods combined. Call it modern-day redlining” writes Linda Lutton of WBEZ Chicago Public Radio, Andrew Fan, City Bureau and Alden Loury, WBEZ.
The term redlining was coined to describe the 1930s policy of marking maps with red lines to indicate neighborhoods with a high proportion of minority residents and to warn banks against investments there. Those communities were consequently unable to attract and retain people who could afford to buy homes which led to further racial segregation and urban decay. Although redlining was made illegal in 1977, the practise continues today.
Only 8.1 percent of the $57.4 billion loans for residential properties made between 2012 and 2018 went to Black neighborhoods, 8.7 percent went to Latino neighborhoods and a whopping 68.1 percent to majority white neighborhoods. And this is despite the fact that Chicago has an equal spread of neighborhoods containing each demographic. Some of the city’s largest lenders have the worst records. Although price differentials in homes might explain some of this disparity, the number of loans in Chicago’s majority white neighborhoods was four times higher during that period.
Some of the underlying reasons why banks won’t lend also stem from earlier lending discrimination which has left a wealth disparity between Blacks and whites. And house prices in many of Chicago’s poorer neighborhoods have still not recovered from the 2008 housing crisis. But mortgage lending discrimination still exists.
When financial institutions won’t lend, homes don’t sell, properties remain vacant and people who want to invest just can’t. Poorer neighborhoods need the capital investment that home loans and home ownership can bring. They also need the people, the services and the sense of pride that home ownership brings with it.
Read the original article here.
Image by Colin J Bird / CC BY-SA 4.0