Redlining was first identified in the Chicago neighborhood of Austin in 1960. In 1934, Congress passed the Federal Housing Act. This affected the nation as a whole; it was created “to promote private sector housing construction and loans by insuring mortgages.” This means that homes were being built in “private” sectors of the city and loans were also being insured to these “private” sectors. A man by the named of Homer Hoyt was then hired by the Federal Housing Commission to “develop underwriting criteria for federally insured homes(Brown,1991).” Maps of all cities were taken and color coded according to Homer Hoyt’s coding key. This particular action was one that offset the redlining crisis. The bottom line was, if your community was outlined in red and labeled “type D” it meant that your community was under developed and could not receive financial investments from their local banks. Imagine living during this time period. It is like people were caged in between these boundaries and if you lived in an area labeled “C” or “D” your community was left to decay which is unimaginable because looking at today we do not view society this way.
In the early 1900’s, before the Federal Housing Act was introduced, racial restrictive covenants were used nationwide. Racial restrictive covenants were agreements that prohibited people of color from buying homes and owning a piece of land, specifically in white communities. This became common after 1926 when the U.S Supreme Court validated the use of racial restrictive covenants. This is atrocious because it is assumed that everyone has a right to land and has the freedom and choice to settle where they wish to make a living; yet, if your skin is any other color than white, then you are considered essentially a drawback in white communities and all because of race which is a nonexistent concept. Not long after, the FHA was passed which further obstructed primarily African American communities to improve their communities. I found this to be outrageous because when I think of today, I cannot see this happening. I can’t picture the government putting people of color into these kinds of predicaments. Although it still happens with Native Americans sorrowfully, it is hard to picture this being okay and common.
Economically, white people were prospering from these actions. They were the ones who owned the majority of houses and were making money off of them (Coates, 2014). This caused a gap in between the rich and the poor. “Not only have segregated housing patterns caused social isolation, but they have also created great disparities in wealth between whites and non-whites” (Brown, 1991). Not only were they prospering economically, but socially. They were improving their society because they were gaining all these investments to improve their communities. They could afford it and were living away from the city out in the suburbs. “Landowners, realtors, appraisers, banks, mortgage, and insurance companies and federal, state and local governments have all played a role in promoting racial segregation in houses”(Brown, 1991). It became socially acceptable for white people to live next to white people and African Americans next to those who looked like them. This became the cultural climate for many cities even outside of Chicago. Others may say that people were more comfortable living in communities where they shared cultural practices or beliefs and although this may be true, it didn’t work out for long and it still didn’t justify the reasons why people of color couldn’t get community investments or were denied from receiving help from banks. It is possibly true that people were comfortable amongst people who share the same culture and perceptions etc. because it is even true today. There was always and will always be those people who want to venture out of their comfort zones and perhaps belong to a society where they may not be socially accepted because of their skin tone.