“Redlining” a Spatial Concept for Specific Territories

Redlining was originally a spatial concept that referred to specific areas that were not receiving suitable amounts of mortgage credit. Redlining is considered one of the primary explanations for the disinvestment that took place in central metropolitan cities during the middle decades of the 20th century. It played a significant role in deindustrialization, suburbanization, and racial segregation in many cities. Scholars, journalists, and fair housing activists largely agree that redlining involves ideas about creditworthiness that have little or nothing to do with the mortgage applicant, yet always takes the location of the property into account.

Contemporary redlining research has used various types of data and methods to determine whether lenders have avoided certain areas or types of areas.

Racial minorities, more specifically African Americans, did not have access to conventional home loans and had to resort to schemes like contract sales that involved steep interest rates. Consequently, the population of these neighborhoods became unstable, and existing homeowners struggled to obtain a loan for maintenance and repairs, leading to further property deterioration. There were concerns about geographic disparities in lending, which fueled efforts to supplement the Fair Housing Act with federal legislation explicitly aimed at redlining. When lending institutions redline an area, they avoid lending to whole spatially contiguous areas, not just small blocks with similar characteristics scattered throughout a city. In their search for more subtle forms of discrimination against certain areas, researchers have more recently looked for statistical associations between racial composition and mortgage outcomes without the same concern for spatial relationships.

Nearly 70 percent of redlined communities in Baltimore remain predominantly minority and lower income. Neighborhoods in western Baltimore that were rated as "desirable" successively became populated with minority, low-income residents as middle-class whites fled to the suburbs, researchers said. A 2015 study of home mortgage and small-business lending in Baltimore by the NCRC found that race, more than income, affected mortgage lending in the city. Lending is greater in neighborhoods with larger white populations, with banks providing more than twice as many mortgage loans to white residents as they did to black residents.

Research has found that redlined neighborhoods in the South and the West are more likely today to be home to a large minority population. Neighborhoods in the South and Midwest display the most persistent economic inequality. In Macon, Georgia, 65 percent of neighborhoods were marked as "hazardous" in the 1930s, making it the most redlined city in the United States, followed closely by Birmingham, Alabama.

Rather than identifying a spatially contiguous area that has been underserved, this view of redlining considers whether neighborhoods with racial minorities are overall underserved. Although these spatial and contextual views of redlining are conceptually quite different, they may lead to the same conclusions. Because of the extreme levels of segregation in American cities during the second half of the 20th century, areas with high levels of racial minorities are often clustered. These views of redlining are conceptually quite different, requiring different types of analyses to uncover them. The emphasis on spatial relationships is equally relevant to studies of contemporary redlining. The subtle search by researchers for the ideal statistical model to test for redlining diverts attention from the efforts to identify actual neighborhoods where redlining occurs. Address-level mortgage information, increasingly accessible for studies of contemporary redlining, can be mapped and analyzed using the relatively simple spatial methods identified in this article. By creating map layers to identify underserved communities, researchers and fair housing advocates can focus their efforts on combatting discrimination, creating new opportunities for homeownership, wealth accumulation, and community development.

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