What is redlining? A look at the history of racism in American real estate

by Melissa Lafsky
February 8, 2023 · 1 minute
by: Melissa Lafsky
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This article originally ran in Bankrate.com

The days of legally sanctioned race-based housing discrimination may be behind us, but the legacy of attitudes and practices that kept nonwhite citizens out of some neighborhoods and homeownership remains pervasive. “Redlining,” one of these practices, is especially notorious in U.S. real estate history.

What is redlining? Technically, it refers to lending discrimination that bases decisions on a property’s or individual’s location, without regard to other characteristics or qualifications. In a larger sense, it refers to any form of racial discrimination related to real estate.

America’s discriminatory past can still be present today with nonwhite mortgage borrowers generally getting charged higher interest rates and the persistence of neighborhood segregation. These trends can be traced in part to redlining, an official government policy dating from the 1930s, which codified racist attitudes in real estate finance and investment, and made it more difficult for nonwhites to purchase homes.

Redlining and racism in America have a long, complex and nuanced history. This article serves as a primer on the policy’s background and how it continues to affect real estate and nonwhite homeownership today. It also includes suggestions to reduce redlining’s lingering effect.

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