A Brief History of Redlining, Part 2

Part two of this discussion of redlining explores the language that assessors used when making color-coded maps of neighborhoods in segregated cities. These maps were used to determine whether mortgage lending in those neighborhoods was desirable.

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Episode Transcript

Speaker 1 (00:01):
Welcome to Stuff You Missed in History Class from housework
dot Com. Hello, and welcome to the podcast. I'm Tracy
the Wilson and I'm Holly Frying. So this episode of
Stuffy miss and History Class is part of a two

(00:21):
part series on the history of redlining. And often are
two partners like they can stand alone reasonably well, but
in this case, part one really is necessary to making
sense of part two. So if you've skipped part one,
hopefully like you're maybe a brand new listener to the show,
we really really encourage you to pause this one, listen
to our previous episode, and then come back to this one. Also,

(00:45):
one of the things that we're going to talk about
today is the language that it's the assessors used when
making color coded maps of neighborhoods and segregated cities to
use as a reference on whether mortgage lending in those
neighborhoods was desirable or not. We're also gonna talk about
the language of the instructions and language and other documents also,
and some of this language is frankly offensive, and we

(01:06):
are including it as part of exploring these maps and
what they represented. Uh, we read from a couple of
instructions in the previous episode that we're definitely the mildest
of all of this. These maps at sort of demonstrate
and also predict ongoing patterns of housing discrimination that have

(01:26):
persisted since they were created. As we discussed in the
previous installment, the Homeowners Loan Corporation was a Depression era
government program in the United States that was meant to
save the homes of people who had defaulted on their mortgages.
In the h o l C started its City Survey
program to map more than two hundred cities around the

(01:48):
United States, creating color coded keys of where mortgage lending
was desirable and where it was not. They looked at
all aspects of the neighborhood, including the terrain, the buildings,
the amenities, the residents, and the economic factors tying all
of this together. The thought process that was kind of
guiding the approach to all these maps was that neighborhoods

(02:10):
go through a predictable and inevitable cycle. First, they would
be shiny and new and desirable, with lots of affluent
people moving into brand new houses in an area with
lots of amenities. Then they'd get a little older, a
little more dated, a little less well maintained. Then quote,
undesirable elements would quote infiltrate these aging neighborhoods. Eventually, these

(02:37):
undesirables would completely take over and the whole neighborhood would
be ruined thanks to crime, vandalism, and the population living there. So,
combining this overall view about how neighborhoods age with data
about the neighborhoods themselves and the people who lived there,
the h o LC made a collection of color coded maps.
Grade A, the first grade was green. This was the

(03:00):
best classification, and these were the most desirable neighborhoods. Grade D,
the fourth grade, was read or hazardous. These were neighborhoods
where mortgage lenders either did not operate or strongly preferred
not to operate. The middle two grades, blue and yellow,
which were also known as still desirable and definitely declining.
We're not as desirable as green, but they were not

(03:22):
off limits the way these red hazardous neighborhoods were either.
So here's how the h o LC described the four categories.
We're going to read them word for word. Quote. Green
areas are hot spots. They are not yet fully built
up in nearly all instances. They are the new, well
planned sections of the city and almost synonymous with the

(03:42):
areas where good mortgage lenders with available funds are willing
to make their maximum loans to be amortized over a
ten to fifteen year period, perhaps up to seventy five
to eight percent of the appraisal. They are homogeneous in
demand as residential locations in good time or bad hence
on the upgrade. Blue areas, as a rule, are completely developed.

(04:08):
They are like a n automobile, still good, but not
what the people are buying today who can afford a
new one. They are the neighborhoods where good mortgage lenders
will have a tendency to hold loan commitments ten to
fift under the limit. Yellow areas are characterized by age,
obsolescence and change of style, expiring restrictions or lack of them,

(04:32):
infiltration of a lower grade population, the presence of influences
which increase sales resistance, such as inadequate transportation, insufficient utilities,
perhaps heavy tax burdens, who a maintenance of homes, et cetera.
Ferry built areas are included, as well as neighborhoods lacking homogeneity. Generally,

(04:55):
these areas have reached the transition period. Good mortgage lenders
are more conservative and the yellow areas and hold commitments
under the lending ratio for the green and blue areas.
As a side note before Holly reads the red part,
if you're not familiar with the term jerry built, a
jerry builder was a term for a speculator who would
build a lot of houses out of very cheap, shoddy

(05:17):
materials with kind of unsubstantial construction. Not even the Oxford
English Dictionary is sure exactly how the name jerry got
attached to it. But to go back to the description,
we're going to hit red areas next quote. Red areas
represent those neighborhoods in which the things that are now
taking place in the yellow neighborhoods have already happened. They

(05:40):
are characterized by detrimental influences in a pronounced degree, undesirable
population or infiltration of it, low percentage of homeownership, very
poor maintenance and often vandalism prevail. Unstable incomes of the people,
and difficult collections are usually prevalent. The areas are rodder

(06:00):
than the show called slum districts. Some mortgage lenders may
refuse to make loans in these neighborhoods, and others will
lend only on a conservative basis. So after a brief
word from a sponsor, we're going to look at the
maps of Richmond, Virginia as an example of what these
maps actually said about the neighborhoods they were documenting. So

(06:22):
to get back to these maps, when you look at
all of the documentation that went into creating these maps,
there are some clear and obvious patterns that emerge. We're
going to look at the maps of Richmond, Virginia as
a primary example because those maps and all of their
supporting documentation have been digitized as part of a project
by the Digital Scholarship Lab of the University of Richmond.

(06:44):
We're gonna link to that from our show notes. Uh
And to be clear, I looked at the maps for many, many,
many other cities and their documentation as part of researching
these two episodes. And the reason that we are using
the Richmond maps for the bulk of the examples is
because they WIYH that they have been organized online is
extremely easy to jump back and forth between the maps

(07:04):
and the documentation, and to go back and forth between
the different parts of the documentation um, these same trends
are definitely evident and other maps all over the country also.
When it came to the inhabitants, assessors gave a basic
description of the types of people living in each neighborhood.
The instruction was, quote what is the general type of

(07:26):
occupation i e. Executive businessmen, retired, professional, clerical, skilled mechanic
or factory workers, laborers, etcetera. In Richmond, Virginia as our example,
the residents of green sections were described as quote best people.
Blue section inhabitants were some more of the best people,
as well as salaried workers and quote responsible trades class.

(07:50):
In the yellow section, most of the inhabitants are quote
working people, mechanics, mill hands, and a number of other
specific hourly wage jobs. I would say I did not
find as much categorizing of the people in green as
best people outside of Richmond, Like there were four specific
things about them, being various affluent roles like executive people

(08:12):
and people that were generally wealthier. So in the Richmond
maps there are twelve red neighborhoods, and as we said before,
these are the ones where mortgage lending was not seen
as desirable. According to the assessor, they have the lowest
annual income of all of the neighborhoods. They also have
the highest percentage of renters, and seven of the red

(08:35):
neighborhoods out of the twelve, As I just said, the
inhabitants are described only as a Negro. Four of those
descriptors are left blank. For comparison, there's only one left
blank in each of the blue and yellow sections, both
of which have far more sections than red. None of
them are left blank in the Green section the one.

(09:00):
There is one Red neighborhood that's marked as quote laboring whites.
So while the white neighborhoods included information about what people
actually did for a living, all that was noted about
the black neighborhood's inhabitants was that they were black. There
was a whole separate part of the Richmond assessment that
was specifically about race. Richmond's green, blue, and yellow neighborhoods

(09:24):
are all marked as zero Negro. All of the red
zones are or more negro, apart from South Richmond, which
was zero when this map was made. South Richmond was
a working class white neighborhood almost entirely surrounded by two
other neighborhoods, each of which had a black population. Richmond

(09:45):
assessors were also to note, as all other assessors were,
the infiltration of inhabitants. Here was the instruction to assessors
quote any threat of infiltration of foreign born Negro or
other low A grade population. If so, indicate these by
nationality and rate of infiltration, like this Negro rapid. That's

(10:10):
where the quote ends. In the Richmond map. The red
zones that are not already a hundred percent black were
noted with an infiltration of Negro, and one yellow section
was noted as being infiltrated by renters working people. The
Richmond maps also emit lots of other detail about any
of the majority black neighborhoods. There's no description about the

(10:32):
terrain or the buildings. It was enough to know that
black people lived there. And while there were blanks left
at various spots for other neighborhood types, this was really
really disproportionate in terms of the black neighborhoods. It would
be easy to write all of this off as the
work of one rogue racist assessor who worked in the Richmond,
Virginia area, but the same pattern is true in maps

(10:55):
from all over the United States, the black neighborhoods are
overwhelmingly marked in red, and the red neighborhoods are disproportionately
skipped over in terms of actual detail. Other than the
fact that black people live there. There's also the fact
that the instructions themselves UH talked about noting an influx
of black residents as a problem. As an example of

(11:19):
a non Richmond map where these trends are equally apparent,
in Acron Ohio assessment include includes this in a Grade
Sea neighborhood made of predominantly Italian rubber workers, quote only
three Negro families located in entire area, and these are
better type colored and own their own homes. That's the

(11:40):
end of that quote. A Great d neighborhood in Akron
is described as being predominantly Jewish rubber workers and laborers,
but with end quote, infiltration of colored fairly rapid, with
quote present heavy Negro encroachment gradually increasing end quote. As
we said earlier, we are going to link to so
many of these maps in our show notes, and in

(12:02):
many cases, people who find maps of their own cities
at neighborhoods will see the same trends still present and
who lives where, and which neighborhoods are considered nice. So
there's some debate among historians about exactly where these maps
fit in with the process of redlining. The maps themselves
weren't discovered until nine seventy, long after they were made.

(12:24):
They kind of disappeared from you for a while after
the Great Depression. That's unclear how they were actually used
in practice. One train of thought is that the h
o LC maps started the practice of redlining, especially redlining
black neighborhoods specifically. Another argument is that this practice was
actually already in place, so these maps are a symptom

(12:47):
and a documentation of something that was already happening, not
the cause. A third argument is that none of this
proves anything. It's impossible to tell whether lenders were really
discriminating based on race or or whether their actual decisions
were based on individual borrowers financial needs or not. One
thing that's used to support that argument is that a

(13:09):
lot of the h o LC's own original refinancing efforts,
which like we said, we're part of mortgage relief during
the Great Depression and started years before these maps were
actually made, did happen in neighborhoods that were later coded
to be in categories C or D, so yellow or red. However,
these maps are also not the only evidence of racial

(13:30):
discrimination in housing in the nineteen thirties and beyond. A
Federal Housing Administration Underwriting Manual from nine five includes the
instruction quote protection against adverse influences is obtained by the
existence and enforcement of proper zoning regulations and appropriate deed restrictions.
Important among adverse influences are the following infiltration of inharmonious

(13:55):
racial or nationality groups, the presence of smoke, odors, fog,
et cetera. The National Association of Real Estate Broker's Code
of Ethics, as amended in nineteen fifty two, reads quote
Realtors should never be instrumental in introducing into a neighborhood
a character of property or occupancy, members of any race

(14:16):
or nationality, or any individual whose presence will clearly be
detrimental to property values in the neighborhood. In other words,
the instructions themselves made to map surveyors, underwriters, and real
estate agents contained clear directions to discriminate against home buyers
and neighborhoods based on race. So we talked to Part

(14:37):
one about home buying being viewed as an investment. This
can be hard to believe for people who lost lots
of money or their homes in the most recent housing
market crisis in the United States. I my home declined
precipitously in value. Uh, that's my personal experience. But in
the nineteen thirties, the median home price in the United

(14:58):
States was about fifty thousand dollars. In it was more
like a hundred and fifty thousand dollars. So these patterns
of discrimination, which were either started by or documented by
the h OLC neighborhood maps, excluded minorities, especially black people,
from being able to participate in that long term investment.

(15:22):
It also prevented predominantly black neighborhoods from making a transition
from rental neighborhoods to owner occupied neighborhoods. As a general rule,
owner occupied neighborhoods are better maintained and more stable than
rental neighborhoods. The idea here is that people who own
their homes are more deeply invested in the home itself
and the good of the surrounding neighborhood than people who rent.

(15:43):
This is not any tirade against renters at all. We
have Tracy and I have both been renters. We have
been there. But that is a statistical fact that renters
just don't tend to have the same investment in their home. Also,
sometimes the people that buy houses to rent out do
not have the same investment in a neighborhood right there
to collect rent. So again not knocking renters in the least.

(16:07):
A two thousand fourteen study at Penn State put a
dollar amount on the difference, uh, and that is that
owner occupied neighborhoods benefit their neighborhood to the tune of
one thousand, three d twenty seven dollars per home per year.
So that's to sub that up again, meant that these
neighborhoods that had been excluded from being eligible for mortgage

(16:29):
lending meant that they were sort of trapped as being
only rental neighborhoods without people who lived there being able
to make the transition into being homeowners and to put
more investment into their own surrounding area. So the h
o l C ceased operations and its assets were liquidated
in nineteen fifty one, and from the late nineteen forties

(16:50):
through the late nineteen sixties, a number of court decisions
and laws attempted to address the ongoing discrimination within the
mortgage and homebuying process. Racely restrictive covenants were found to
be unconstitutional. In the nineteen forty seven Supreme Court case
Shelley versus Cramer, a black couple the Cramers had moved
into the Shelleys neighborhood, which, per a restrictive covenant, was

(17:13):
supposed to be all white. The Shelleys took the Cramers
to court, and in a unanimous decision, the Court found
that state's enforcement of racially restrictive covenants violated the Fourteenth
Amendment to the Constitution. The Fair Housing Act was passed
in nineteen sixty eight, making it illegal for property owners, landlords,
and real estate brokers to discriminate against people based on

(17:34):
their race. The government also soon took steps to keep
lenders from discriminating illegally. The Home Mortgage Disclosure Act, which
was passed in nineteen seventy five, required lending institutions to
report data about all of their mortgages, and in nineteen
seventy seven, the Community Reinvestment Act encouraged banks to reinvest
money in the neighborhoods where they did business. However, even

(17:58):
though redlining is illegal now, lenders, insurance companies, and other
businesses have continued to engage in it. And that's in
spite of a surgeon lending to minorities in the nineteen
nineties that seemed like it might close that gap. We're
going to spend a few minutes talking about some examples.
A study of Detroit, Michigan, which is a majority black city,

(18:18):
looked at two thousand census data and compared the proportion
of black residents in the census tracts against mortgage lending
in the same area. It found that quote, despite the
identification of other significant factors such as educational attainment, the
presence of independent effects associated with race demonstrated that in
the city of Detroit, redlining occurs in the contemporary period.

(18:42):
At two thousand eight, paper and the Journal of Economic
Issues looked at loans in Mississippi and found denial rates
for minorities to be exceptionally high in a way that
wasn't explained by actual economic factors. And that study, black
and Hispanic borrowers actually did have generally weaker credit histories
than white or Asian borrowers, but the denial rates for

(19:05):
black and Hispanic borrowers were really out of whack compared
to the actual number and extent of that difference. There
have also been investigations of actual lenders and financial institutions.
In eleven, the Department of Justice settled a case against
Prime Lending, a wholly owned subsidiary of Plains Capital Bank,

(19:26):
for a nationwide pattern of discriminating against black borrowers. In
May of the U s Department of Housing and Urban
Urban Development announced a two hundred million dollars settlement in
red lighting claims against Associated Bank in a for unfair
lending practices that went on between two thousand and eight
and quote. The settlement stems from a HUD secretary initiated

(19:50):
complaint alleging that from two thousand eight, the Wisconsin based
bank engaged in discriminatory lending practices regarding the denial of
more gage loans to African American and Hispanic applicants and
the provision of loan services in neighborhoods with significant African
American or Hispanic populations. And of course, this pattern is

(20:13):
not confined to mortgage lending. Accusations of redlining have also
been leveled at the insurance and student loan industries. In
terms of insurance specifically, some people argue that the increased
premiums charged in minority neighborhoods are appropriate because those neighborhoods
are more expensive for the insurer, But studies of that
idea are actually conflicting in their results, and the term

(20:35):
is also used today to describe retailers whose prices are
higher in the lowest income neighborhoods. So if I set
at the very top of this two partter that it
was inspired by a conversation where somebody demanded that we
explained to them something, and the explanation that was in
demand was why have Asian people succeeded more? It was

(21:00):
actually grosser than that. It was why is there no
racism against Asians if there's so much racism? And I
was like, well, because there is racism against Asians, it
just looks a lot different from racism racism against other
minorities because of all these social factors that have gone
on since the abolition of slavery a hundred and fifty

(21:20):
years ago. And one of the things that I mentioned
was redlining, and the person I was talking to clearly
didn't believe that redlining was ever a thing, and thought
I was talking about the more recent mortgage crisis, which
is a different thing. Like his argument was that the
whole mortgage crisis had been uh caused by giving loans

(21:43):
to people who couldn't afford them, which is only one
piece of that story. A lot of the loans that
were given to people who couldn't afford them were in
and of themselves predatory loans, Like the loans structure itself
was wrong and was like setting people up for failure.

(22:03):
They were people were doing or banks are doing things
like giving people separate loans to cover just the interest,
which is a whole bad situation. Like, there was a
lot going on beside that. Um, this was not a
case where the person actually later said thank you for
explaining that to me. Uh. He actually went away after
I gave him uh like a link to the Wikipedia

(22:27):
page about redlining, because Wikipedia seemed to be the only
source that he considered to be uh worthwhile it was
a Yankee conversation, but this whole I had heard of
redlining when I bought my house. Me too, right, because
I bought my house through a program for first time homebuyers,

(22:49):
and one of the things that they were specifically trying
to combat was the ongoing problems in the housing market
that came about because of redlining. And so that's where
I heard about it for the first time. And when
I started researching this, what I thought I was going
to find was a lot of neighborhoods that had been
redlined so people wouldn't provide mortgage there. And it was like,
it happens to be that the poorest communities often were

(23:13):
predominantly African American and it was like a weird chicken
and egg thing. That is what I thought in my
head I was going to find. I was completely forward
when I actually found instructions on survey forms that were
specifically like note if there's an infiltration of quote negroes

(23:33):
like I was not. I did not. It was worse
than I thought it was going to be. That's what
I'm trying to say. Yeah, the wording makes it sound
like you're sending like a spy out in wartime, like
you have to look for these horrible people. No, but yeah,
it makes my heart hurt. Frankly me too. So I

(23:55):
have some listener mail to take us out on a
much lighter note than this, uh, which we talked about
things like this because they're important and because their examples
of how history continues to affect people's lives today. So uh.
This this listener mail, though, was about something much more
light hearted. It's from Rebecca, Rebecca says, Oh, it's from Becca,

(24:18):
It says Becca at the bottom. So I'll call Rebecca.
Becca says, Dear Holly and Tracy. I really enjoyed the
good humor versus popsical episode in my ears perked up
at the mention of Frank Epperson in Oakland. I live
in Alameda, an island, Yes, an island next to Oakland.
I had heard the story of Frank Epperson, but had
no idea about the intricacies between good humor and popsicle.

(24:39):
Neptune Beach, where Everson sold some of the first popsicles,
was an amusement park in Alameda. Alamada was a getaway
for wealthy San Franciscans. They had vacation homes and visited
by traveling on the ferry. There was not a bay
bridge yet. Some of the homes built are still in
Alameda and referred to as the Gold Coast. Unfortunately, in

(25:00):
the seventies, a developer filled a huge portion of the
estuary and built apartments that blocked the Gold Coast views.
Neptune Beach is also gone, however, there are some remnants
of little vacation cottages, now turned into homes. Neptune Beach
operated from nineteen seventeen until nineteen thirty nine. The Strethlow
family owned and operated the beach and filled in a
section of bait at an Olympic sized swimming pool and

(25:23):
a roller coaster with views of the bay. They had
swimming races and a hand carved carousel and ferris wheel.
The park closed in ninety nine, mainly because of the
Great Depression. Also, the Bay Bridge was built and people
lost the allure of traveling on the ferry. The main
access point to the beach was via the ferry and
also where one paid admission, but with cars, people were

(25:45):
able to access the beach without paying, also leading to
its demise. And then she sends a link of some
neat pictures of the park which we will put in
our show notes. Thank you again for your great podcast, Becca.
Thank you, Becca. We didn't talk about Neptune Beach much
at all except for impact things, so it is really
cool to hear that first person account of various things

(26:05):
from there from somebody who lives in the area. If
you would like to write to us about this or
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(26:25):
at miss in history. UH. If you would like to
go to our parent company's website, you can put in
the word mortgage in the search bar and you will
find uh information on how mortgages where a lot of
which was inspired by these changes that were made in
the industry after the Great Depression. Can also come to
our website, where we're gonna have links to so many
of these maps so you can see them for yourself.

(26:48):
We also have show notes for all of our episodes.
We also have an art I have of all of
our episodes. I should say that the show notes are
the for the episodes of Holly and I have worked
on there. They don't really exist as much before, so
you can do all that at and a whole lot
more at how stuff works dot com, or missed the
history dot com for more on this and thousands of

(27:09):
other topics because it how stuff works dot com. M