HOLC “redlining” maps: The persistent structure of segregation and economic inequality » NCRC (2022)

Executive Summary

Eighty years ago, a federal agency, the Home Owners’ Loan Corporation (HOLC), created “Residential Security” maps of major American cities. These maps document how loan officers, appraisers and real estate professionals evaluated mortgage lending risk during the era immediately before the surge of suburbanization in the 1950’s. Neighborhoods considered high risk or “Hazardous” were often “redlined” by lending institutions, denying them access to capital investment which could improve the housing and economic opportunity of residents.

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This study examines how neighborhoods were evaluated for lending risk by the HOLC, and compares their recent social and economic conditions with city-level measures of segregation and economic inequality. The study reveals:

The economic and racial segregation created by “redlining” persists in many cities

Redlining buttressed the segregated structure of American cities. Most of the neighborhoods (74%) that the HOLC graded as high-risk or “Hazardous” eight decades ago are low-to-moderate income (LMI) today. Additionally, most of the HOLC graded “Hazardous” areas (nearly 64%) are minority neighborhoods now.

(Video) Housing Segregation and Redlining in America: A Short History | Code Switch | NPR

Persistent economic inequality

There is significantly greater economic inequality in cities where more of the HOLC graded high-risk or “Hazardous” areas are currently minority neighborhoods. To a lesser extent this is also true of cities where more of the HOLC low-risk or “Desirable” areas have remained white. This could indicate that cities with less change in the racial and ethnic structure of their neighborhoods over the past 80 years have greater economic inequality today.

Persistent residential segregation

Cities where more of the HOLC high-risk graded “Hazardous” neighborhoods are mostly minority are associated with “hypersegregation”. Both black and Hispanic residents of hypersegregated cities are unevenly distributed and have lower levels of interaction with non-Hispanic whites. Minority residents also tend to be more clustered in neighborhoods of cities where there were more HOLC higher-risk or “Hazardous” neighborhoods.

(Video) Redlining: A Building Block of Racial Inequality Past and Present

Gentrification is related to some lessening of segregation,
but also with increasedeconomic inequality

Gentrification is associated with greater economic change in the HOLC highest-risk, “Hazardous” neighborhoods and higher levels of interaction between black and white residents, but also greater economic inequality in cities. Gentrification probably occurred in the HOLC “Hazardous” graded areas because of decades of depressed home values.

Regional differences in changes of HOLC “Hazardous”,
and LMI and majority-minority areas

Cities in the South showed the least change in the HOLC-evaluated “Hazardous” neighborhoods that today have lower incomes and higher populations of majority-minority residents. The Midwest closely followed the South in the persistence of low-to-moderate income (LMI) neighborhoods and HOLC “Hazardous” areas.

(Video) Redlined


Access to credit––home mortgage and small business loans––is an underpinning of economic inclusion and wealth-building in the U.S. Credit access, however, varies greatly depending on individual creditworthiness, and also on place-based factors like economic conditions of prosperity and growth which shape local credit markets. Another determinant of credit access is the risk associated with lending, which can be mitigated by the value of the collateral. Home mortgage lending credit access is subject to all of these factors, with the property collateralizing the loan. As a consequence, it has a neighborhood-level spatial structure, presenting a geography which can be examined in maps of cities across the country. Redlining––the practice of denying borrowers access to credit based on the location of properties in minority or economically disadvantaged neighborhoods––was widely practiced across the U.S., even in places not commonly associated with “Jim Crow” segregation laws (Rothstein 2017). While overt redlining is illegal today, having been prohibited under the Fair Housing Act of 1968, its enduring effect is still evident in the structure of U.S. cities. Part of the evidence of this enduring structure can be seen in the Home Owners’ Loan Corporation (HOLC) maps created 80 years ago, and the neighborhood economic and racial/ethnic composition today. The maps were created by the HOLC as part of its City Survey Program in the late 1930s. The HOLC deployed examiners across the country to classify neighborhoods by their perceived level of lending risk.

HOLC “redlining” maps: The persistent structure of segregation and economic inequality » NCRC (2)

HOLC examiners consulted with local bank loan officers, city officials, appraisers, and realtors to create “Residential Security” maps of cities. More than 150 of these maps still exist. The examiners systematically graded neighborhoods based on criteria related to the age and condition of housing, transportation access, closeness to amenities such as parks or disamenities like polluting industries, the economic class and employment status of residents, and their ethnic and racial composition. Neighborhoods were color-coded on maps: green for the “Best,” blue for “Still Desirable,” yellow for “Definitely Declining,” and red for “Hazardous.”

NCRC has taken these maps and compared the grading from 80 years ago with more current economic and demographic status of neighborhoods as low-to-moderate income (LMI), middle-to-upper income (MUI), or majority-minority. To a startling degree, the results reveal a persistent pattern of both economic and racial residential exclusion. They provide evidence that the segregated and exclusionary structures of the past still exist in many U.S. cities.

In 1933, the HOLC was established to assist homeowners who were in default on their mortgages and in foreclosure. The HOLC was one of many “New Deal” programs––policies intended to relieve the worst effects of the Great Depression––leading the way in establishing the modern government-backed mortgage system. In the case of the HOLC, stabilization of the nation’s mortgage lending system was the primary goal. It accomplished this task by purchasing mortgages that were in default, providing better terms for financially struggling families. For example, the HOLC and the Federal Housing Administration (FHA) introduced innovative loan programs, making fully amortized loans available over a 25-year period (Crossney and Bartelt 2005). This replaced the previous private and locally based system in which mortgages were usually made only for 5 to 10 years, at the end of which a “balloon” payment, covering the entirety of the principal, was due. Some scholars have argued that the maps and codification of appraisal practices introduced by the HOLC bolstered “redlining” as a pattern in government mortgage lending (Jackson 1987; Massey and Denton 1993). Others have argued that the maps were confidential documents and an analysis of individual HOLC loans, most of which were made by 1936, before the “residential security maps” were completed, indicates that the agency provided mortgages to both white and minority borrowers (Hillier 2003a, 2003b; Crossney and Bartelt 2005). From this evidence it appears that the residential security maps were not used by the HOLC to qualify mortgage refinancing; however, it is unclear to what degree the maps may have been used later, by FHA appraisers. Hillier (2003b) found that when conventional loans were made in HOLC red-coded “Hazardous” areas, they had higher interest rates for borrowers, and also found discriminatory practices by the HOLC in allowing brokers to follow local segregation standards in the resale of properties acquired by foreclosure. Greer’s 2014 analysis extends beyond the HOLC maps themselves to encompass later FHA mortgage risk maps of Chicago, finding that those maps directly impacted lending decisions, barring loans over larger sectors of the city. While the ultimate use of the HOLC residential security maps is a subject of debate, it is clear that the HOLC maps compiled the common understanding of local-level lending decision makers of the risk in the neighborhoods of their cities. Consequently, the HOLC maps document which areas were considered lower risk, and therefore preferred for loans, and higher-risk areas where lending was discouraged. The maps document the neighborhood structure of cities and indicate areas which may have been subject to “redlining” by banks when making lending decisions. Since the HOLC maps document the contemporary expert judgement of neighborhood lending risk, they provide an archive of lending risk perception immediately prior to World War II––background material which can help us understand the extensive reconfiguration of the U.S. urban system with the explosion in suburbanization of the post-WWII period.

(Video) How Redlining is Still Killing Communities

This study utilizes neighborhood-level grading from the HOLC maps to assess both the economic status and proportion of minorities living in those areas today. Digitized images of the HOLC Residential Security maps for 115 cities were compared with the presence of LMI and MUI income census tracts currently in those areas using 2010 Decennial Census, and 2016 Federal Financial Institutions Examination Council (FFIEC) Census-derived data. This data was compared then statistically analyzed at the national, regional, and city levels. The questions of this analysis concern the persistence of inequality in cities where the structure documented by the HOLC maps has changed the least; regional differences between cities; and the relationship of neighborhood change and recent gentrification. Specifically, the questions are:

  1. What proportion of the area on the HOLC maps classified least favorably as “Hazardous” (“D” or colored red) is presently occupied by LMI and minority-majority communities for each city? What proportion classified with the most favorable grade of “Best” (“A” or colored green) is currently non-Hispanic white and MUI?
  2. Are there regional differences in how the city-level changes took place?
  3. Do cities with greater persistence of an inequitable structure (more HOLC “Hazardous” or “D” graded areas that are minority-majority and/or LMI) correlate with current indicators of economic inequality and segregation?
  4. Is there an association between higher levels of gentrification and the change of HOLC “Hazardous” or “D”-graded areas into higher income MUI and majority non-Hispanic white areas?

These questions are approached through the spatial analysis of the HOLC map archive, and the degree to which the old grading corresponds with current neighborhood economic and racial/ethnic status. This is then compared with overall city-level indicators of segregation and economic inequality.

(Video) Wenfei Xu

  • View Full Report (PDF)
  • Download full report (PDF)
  • Interactive: View and download maps for 140 metropolitan areas
  • How 1930s discrimination shaped inequality in today’s cities
  • Reversing the red lines: Disinvestment in America’s cities


What was the purpose of the Home Owners Loan Corporation? ›

One of the lesser-known programs of President Franklin Delano Roosevelt's New Deal, the Home Owners Loan Corporation (HOLC) was established in 1933 to help struggling homeowners pay their mortgages.

What is redlining how residential segregation shaped US cities? ›

The “redlined” areas, most often occupied by Black Americans and immigrant communities, were deemed too risky to insure mortgages. As a result, loans to Black Americans weren't likely to be insured — drastically limiting their housing options.

What is the process of redlining? ›

Redlining is the practice of denying a creditworthy applicant a loan for housing in a certain neighbor hood even though the applicant may otherwise be eligible for the loan.

Where is redlining most likely to occur? ›

Black inner-city neighborhoods were most likely to be redlined. Investigations found that lenders would make loans to lower-income Whites but not to middle- or upper-income African Americans.

What is HOLC redlining? ›

The Home Owners' Loan Corporation (HOLC) was created in the New Deal Era and trained many home appraisers in the 1930s. The HOLC created a neighborhood ranking system infamously known today as redlining. Local real estate developers and appraisers in over 200 cities assigned grades to residential neighborhoods.

What is the relationship between HOLC and redlining? ›

HOLC and FHA directed widespread neighborhood appraisals to determine investment risk, referred to as “redlining,” which took into account residents' race. Redlining thereby contributed to segregation, disinvestment, and racial inequities in opportunities for homeownership and wealth accumulation.

What is redlining in the United States? ›

Redlining is an illegal practice in which lenders avoid providing services to individuals living in communities of color because of the race or national origin of the people who live in those communities.

When was redlining created? ›

In the 1960s, sociologist John McKnight originally coined the term to describe the discriminatory banking practice of classifying certain neighborhoods as "hazardous," or not worthy of investment due to the racial makeup of their residents.

What cities have redlining? ›

The legacy of redlining is particularly pronounced in the Northeast and Midwest,1. where cities like Cleveland, Pittsburgh and Chicago are home to some of the most segregated formerly redlined zones in the country. This segregation is especially entrenched in redlined cities with large Black populations.

Why is it called redlining? ›

The term redlining came about in reference to the use of red marks on maps that loan corporations would use to outline mixed-race or African American neighbourhoods. Neighbourhoods in more-affluent areas, which were deemed the most worthy of loans, were usually outlined in blue or green.

What is the cause of redlining? ›

The National Housing Act of 1934, which created the Federal Housing Administration (FHA) in response to the Great Depression of the late 1920s and early 1930s, was a direct response to the banking crises and failures of the late 1920s that resulted in drastic fall in home loans and ownership.

What was redlining quizlet? ›

A discriminatory real estate practice in North America in which members of minority groups are prevented from obtaining money to purchase homes or property in predominantly white neighborhoods.

What is redlining in simple terms? ›

Redlining can be defined as a discriminatory practice that consists of the systematic denial of services such as mortgages, insurance loans, and other financial services to residents of certain areas, based on their race or ethnicity.

What is redlining and why is it unethical? ›

Redlining is an unethical and unlawful discriminatory practice of systematic denial of services to a certain race or ethnic group. The term is used for describing a situation when a particular ethnic group or race is denied the financial services including mortgages, insurance, or loans.

How long did redlining last? ›

A: Redlining, practiced from the 1930s – 1960s, blocked African Americans from obtaining homes, home loans, and home repairs and remains a major factor in the wealth gap between Black and white families.

What is a HOLC map? ›

EXECUTIVE SUMMARY. Eighty years ago, a federal agency, the Home Owners' Loan Corporation (HOLC) created “Residential. Security” maps of major American cities. These maps document how loan officers, appraisers, and real estate professionals evaluated mortgage lending risk during the era immediately before.

What is a redlining map? ›

Redlining was the practice of outlining areas with sizable Black populations in red ink on maps as a warning to mortgage lenders, effectively isolating Black people in areas that would suffer lower levels of investment than their white counterparts.

What is HOLC New Deal? ›

The Home Owners' Loan Corporation (HOLC) was a government-sponsored corporation that was part of the New Deal. It was founded June 13, 1933, by former president Franklin D. Roosevelt. It was created to refinance home mortgages in order to prevent things like foreclosure.

Who created the redlining map? ›

The maps were created by the HOLC as part of its City Survey Program in the late 1930s. The HOLC deployed examiners across the country to classify neighborhoods by their perceived level of lending risk.

Why was the HOLC created? ›

The HOLC was established in June 1933 to help distressed families avert foreclosures by replacing mortgages that were in or near default with new ones that homeowners could afford.

What is the homeownership gap? ›

We define the homeownership gap as the difference between the “official” homeownership rate and a recomputed rate that excludes owners who are in a negative equity position, meaning that the value of their houses is less than their outstanding mortgage balance.

What are 3 long term effects of redlining? ›

Ultimately, we show that 1930s-era redlining maps have had decades-long consequences for affected neighborhoods, reducing home ownership rates, house values and rents while increasing segregation.

Which of the following best describes the practice of redlining? ›

Which of the following best describes the practice of redlining? Giving neighborhoods bad credit ratings based, in practice, on color.

How do we stop redlining? ›

We can achieve that in several ways, including:
  1. Increasing access to down payment assistance. ...
  2. Increasing access to affordable credit. ...
  3. Investing in affordable homeownership. ...
  4. Retargeting the mortgage interest deduction.

What is a major consequence of redlining? ›

Discriminatory practices, like redlining, blockbusting, and predatory lending, led to a lower rate of appreciation for real estate in redlined neighborhoods, which paved the way to an increased wealth gap between Black and white families.

How does redlining affect education? ›

The findings demonstrate that districts and schools currently located in formerly redlined neighborhoods have significantly less per-pupil revenues, larger shares of Black and non-white student bodies, less diverse student populations, and lower average test scores compared with those located in neighborhoods that were ...

What is an example of redlining in real estate? ›

Refuse to make a mortgage loan or provide other financial assistance for a home. Refuse to provide information regarding loans. Develop different loan terms or conditions for a protected class, such as higher interest rates or servicing fees.

What is another term for redlining? ›

disqualify, disbelieve, disrespect, dislike, hate, scorn, ignore, neglect, disregard, condemn.

What does redlining mean in contracts? ›

All documents and contracts go through several drafts before reaching their final form. Redlining is the process of tracking changes between document drafts. The name derives from those familiar red lines word processing programs add under text when they track changes.

What do you mean by segregation? ›

1 : the act or process of segregating : the state of being segregated. 2a : the separation or isolation of a race, class, or ethnic group by enforced or voluntary residence in a restricted area, by barriers to social intercourse, by separate educational facilities, or by other discriminatory means.

What is the difference between de facto segregation and de jure segregation? ›

The decisionrested on a critical distinction in constitutional law between “de jure” segregation—resulting from purposeful discrimination by the government—and “de facto” racial imbalance de rived from unintentional or “fortuitous” actions by state and private entities.

What is redlining AP Gov? ›

Redlining. a practice in which banks refuse to make loans to people living in certain geographic locations. "separate but equal" rule. doctrine that public accommodations could be segregated by race but still be equal. Strict scrutiny.

What is an example of steering quizlet? ›

Which of the following is an example of steering? Correct. Leading prospective purchasers to or away from certain neighborhoods or locales is steering. Refusing to make loans to persons for properties in certain areas is redlining.

What was the Home Owners Loan Corporation simple terms? ›

Home Owners' Loan Corporation (HOLC), former U.S. government agency established in 1933 to help stabilize real estate that had depreciated during the depression and to refinance the urban mortgage debt. It granted long-term mortgage loans to some 1 million homeowners facing loss of their property.

Why did the Home Owners Loan Act end? ›

The HOLC tried to avoid selling too many homes quickly to avoid having negative effects on housing prices. Ultimately, more than 800,000 people repaid their HOLC loans, and many repaid them early enough. HOLC officially ceased operations in 1951, when its last assets were sold to private lenders.

What were the failures of the HOLC? ›

The mortgage-foreclosure rate only fell slightly over the next three years. In June 1936, nearly 40 percent of the HOLC borrowers were more than three months behind on their mortgage payments. By 1940, the HOLC had foreclosed on 17 percent of its loans.

What does FHA stand for in history? ›

Federal Housing Administration (FHA), agency within the U.S. Department of Housing and Urban Development (HUD) that was established by the National Housing Act on June 27, 1934 to facilitate home financing, improve housing standards, and increase employment in the home-construction industry in the wake of the Great ...

Was the HOLC New Deal successful? ›

The HOLC ceased operations on April 30, 1951 with “a slight profit,” defying expectations that taxpayer money would inevitably be lost in such a venture [8]. The Home Owners' Loan Act of 1933 proved to be one of the most successful policies emanating from the first 100 days of the New Deal.

What is the purpose of Federal Housing Administration? ›

We insure mortgages on single family homes, multifamily properties, residential care facilities, and hospitals throughout the United States and its territories.

What means loan corporation? ›

a loan that is given to a company, rather than to a government organization or an individual person: The bank said demand for large corporate loans was low but offset by growth in personal lending. Want to learn more?

How did the FHA help the Great Depression? ›

One of the first changes the FHA made was to lower the down payment amount needed. The length of the purchase contracts was extended, letting people pay off their loans over fifteen years. The FHA system also introduced the amortization of loans, meaning that people paid interest and principal over time.

Is the FHA still around today? ›

FHA loans—mortgages insured by the FHA and issued by an FHA-approved lender—still exist today. Designed for low- to moderate-income borrowers, they require a lower minimum down payment and lower credit scores than many conventional mortgages. 3 They are especially popular with first-time homebuyers.

Was the FHA successful? ›

Among its many achievements, FHA modernized the American mortgage system, improved the quality of the nation's housing stock, prevented millions of Americans from losing their homes, allowed millions more to purchase their first home, and financed the construction of millions of modestly priced rental units.

What was HOLC in response to? ›

On April 13th, 1933, President Roosevelt sent a message to Congress requesting legislation that would protect homeowners from foreclosure. In response, Congress rapidly created the Home Owner's Loan Corporation. The H.O.L.C.

When did the HOLC end? ›

The Home Owners Loan Corporation does not exist today as is was defunct February 3 of 1954. The HOLC contributed to an increase in the supply of rental housing. And essentially saved the housing market. Overall the HOLC helped stabilize the real estate that had depreciated greatly during the Great Depression.

What did HOLC stand for in 1930s? ›

The home owners' loan corporation (HOLC) was a fed. eral program established in 1933 to provide relief to distressed residential mortgage. borrowers and their lenders, and is an important antecedent for current and future. mortgage modification efforts. Over 3 years it purchased more than 1 million mort.

What is the purpose of FHA quizlet? ›

FHA mortgage insurance protects lenders against losses resulting from default by the borrower. Money which provides the FHA insurance protection to lenders comes from the insurance premiums which are paid on each loan insured by the FHA.

Why was FHA created? ›

History. The National Housing Act of 1934 created the Federal Housing Administration (FHA), which was established primarily to increase home construction, reduce unemployment, and operate various loan insurance programs. The FHA makes no loans, nor does it plan or build houses.

What did the National Housing Act of 1934 do? ›

The National Housing Act was signed on June 27, 1934, by President Franklin D. Roosevelt to improve housing conditions, make housing and mortgages more accessible and affordable, and to reduce the foreclosure rate during the Great Depression. The law was part of the New Deal.


1. Redlining and Racial Covenants: Jim Crow of the North
(Twin Cities PBS)
2. IRP Seminar, January 30, 2020 - Jacob Faber
(Institute for Research on Poverty)
3. Undesigning Redlining in NYC Schools
(Barnard Center for Research on Women)
4. City Club of Boise Virtual Conversation: The Impacts of Redlining on Health, Wealth and Housing
(City Club of Boise)
5. Founding Failures: How America’s Racial Caste System Has Limited Opportunities for People of Color
(American Constitution Society)
6. Redlining, Public Health and COVID-19 vulnerability
(NCRC Reinvestment Works)

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