The United States has a population of around 13.4 percent Black or African Americans. This amounts to around 40 million people. 

This article attempts to simplify the concept of redlining and examine its impact on Black Americans today.

What Is Redlining?

In a nutshell, redlining is a practice that denies certain neighborhoods equal access to services. Usually, this is in reference to financial services, but often includes other types of services as well. 

This discrimination is usually based on race or ethnicity and most commonly occurs in neighborhoods that are home to minorities. The individuals from these neighborhoods are unfairly denied loans, mortgages, home rentals, and more.

This usually arises due to preconceived notions and stereotypes associated with a specific community. They are then applied to individuals regardless of their own credit scores.

So how did this all begin?

A Quick Journey Through History

James Mcknight coined the term “redlining” in the 1960s. The money lenders of that time would outline certain Black neighborhoods in red, with the intent of denying them any kind of investment or loan. 

Banks would reject loans and mortgages regardless of income and credit records. A white American of similar or even lower income was far more likely to get the same type of loan than their Black counterpart.

This was by no means restricted to lenders. In fact, in the 1930s, this extended to real estate. The governments of that time provided white-Americans with more housing opportunities within the suburbs, while denying the Black Americans access to these areas.  

The Impact of Redlining on Black Americans Today

The introduction of the Community Reinvestment Act of 1977 and the Fair Housing Act of 1968 rendered these practices illegal. 

However, just because a practice is illegal does not mean it does not still exist. The continuance of these practices further promotes residential segregation and the growth of the racial wealth gap. 

In fact, reports show that people of color are continuing to be denied housing on the basis of their race. 

recent analysis shows that even Black Americans with better credit, higher or equivalent incomes are charged a higher rate of interest and refinancing fees than their white American counterparts. This discrimination is not limited to face-to-face lenders. The study shows that it also extends to algorithms and technology.  

Listen to: “‘The Color Of Law’ Details How U.S. Housing Policies Created Segregation” :