It’s been over 50 years since the Fair Housing Act of 1968 was passed under President Lyndon B. Johnson’s administration. The law was meant to prohibit discrimination concerning the sale, rental, and financing of housing. Today, however, the rate at which conventional mortgage loans are being denied to members of the African-American and Latinx communities is significantly higher than that of the white community. According to Chicago Tribune, the homeownership gap between blacks and whites is wider now than it was during the Jim Crow era.
Just a few years ago, the Federal Reserve and Department of Justice reviewed over 31 million records— analyzing loan applicants’ income, loan amount, and neighborhood— in an attempt to identify any disparities in lending. They found that modern-day redlining against minorities is prevalent in at least 60 metropolitan areas across the country. African-Americans struggle most in Southern cities, such as Atlanta, GA and Mobile, AL, while Latinos struggle most in Iowa City, IA.
This is characteristic of banks in the early 1900s. Maps were drawn with certain areas shaded red, denoting “dangerous” areas for bank lending due to the high frequency of African-Americans and European immigrants living in those areas. Now, this behavior persists, only more subtly. “The analysis…showed black applicants were turned away at significantly higher rates than whites in 48 cities, Latinos in 25, Asians in nine, and Native Americans in three.” In Washington D.C., it was found that all four groups are at a disadvantage in this regard compared to whites. Until the law is enforced as it should be, blacks and other minorities will be limited by both financial and governmental institutions.
Yes. Redlining is a live and well, unfortunately.
Whenever I encounter these statistics in the news I cannot help but think about the gross amount of predatory lending that took place within these communities during the years leading up to the 2008 housing crisis.
The same institutions which now deny home loans to members of these communities were never punished for their role in perpetuating the depressed economic status of these people. It is actually quite frustrating because many of these families could be considered ineligible for these loans because these institutions forced them to endure economic hardship that this country has yet to fully reckon with.
I am positive that none of these financial lenders are taking into consideration their own role in the economic situation of these communities. I doubt they ever will.
Here is a quick link to the predatory practices I was referencing: https://www.reuters.com/article/us-usa-foreclosures-race/racial-predatory-loans-fueled-u-s-housing-crisis-study-idUSTRE6930K520101004