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Redlining: A History of Discrimination in Mortgage Lending

Closeup of a Pushpin In a Map of St PetersRedlining is a term that many people have sensed but might not know the technicalities of. Simply put, redlining is the systematic discrimination of certain groups of people in areas like housing and mortgage lending. This exercise has a lengthy and distressing history, and it continues to affect minority communities to this day. In this blog post, we will explore redlining, how it works, and its effects on generations of Americans.

What is Redlining?

Redlining is a term that was coined in the 1930s by John McKnight, a sociologist from Northwestern University. He utilized the term to describe the practice of banks and other financial institutions drawing lines on maps to draw which areas they deemed too risky to lend money in. These “redlined” areas were by and large neighborhoods that were home to minority groups like African Americans, Latinos, and Asians.

In practice and theory, redlining is discriminatory and illegal. The goal of redlining is to put financial and other services, including loans, mortgages, and insurance, out of reach for certain people in certain areas. This precludes these people from buying homes and owning businesses in these places. The areas most presumably to be redlined are black inner-city neighborhoods and those that are considered “slums” or have a high crime rate. Be that as it may, these classifications are repeatedly arbitrary and based on outdated or erroneous information.

The History of Redlining

Redlining has its roots in the early 20th century when the US government began to insure loans made by banks. The government did this to promote lending and help people buy homes. However, these policies had the unintentional consequence of enabling banks to discriminate against definite groups of people.

In 1934, the Federal Housing Administration (FHA) was created. The FHA’s job was to insure mortgages, which made them much less risky for banks. This allowed banks to lend money to people with lower incomes and credit scores. However, the FHA’s guidelines for lending were based on race. They expressly stated that loans should not be made in “residentially unstable or declining neighborhoods,” commonly minority neighborhoods.

Redlining Today

The effects of redlining are still being felt today. Studies have shown that minorities living in redlined neighborhoods are more likely to be denied loans and insurance and often pay higher interest rates when they can get financing. This has led to a cycle of disinvestment in these communities, as property values decline and families are coerced to move.

Redlining is an intricate issue with a long history, but minority communities across the country are still feeling its effects. For renters, redlining can make it difficult to find affordable housing. For homeowners, it can mean higher interest rates and insurance premiums. And for everyone, it can lead to further disinvestment in already-struggling neighborhoods.

If you feel that redlining has hurt your ability to find affordable St. Peters housing, some organizations can help. The National Fair Housing Alliance is a good resource for finding housing counselors and legal assistance. Remember, you have rights, and redlining is illegal. With knowledge and resources, you can fight back against this discriminatory practice.


It is also important to rent from an honorable company that does not overlook illegal practices like redlining. Real Property Management Three Bridges is committed to fair housing and equal opportunity for all renters. We believe that everyone deserves a safe and affordable place to call home. Talk to one of our St. Peters property managers to learn more about our properties and how we can help you find the perfect rental home. Or, you can browse our listings online.

We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.

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