One historical cause of residential segregation was redlining. Lenders would color-code different neighborhoods on residential maps; red was generally the color used to designate a neighborhood as “dangerous,” meaning mortgages would not be approved in those areas, since they were considered to be high-risk areas for mortgage defaults. This was generally a blanket rule: people found themselves unable to get mortgages to buy property in redlined areas, regardless of their income or the value of the particular house they wanted to buy. And a high proportion of Black (and sometimes White immigrant) residents generally meant that a neighborhood would be automatically tagged as a high-risk area.
The University of Pennsylvania Redlining in Philadelphia project provides an example of a map created to guide lending in Philadelphia. The map was created in 1934 by J.M. Brewer, who owned a real estate consulting company and later was chief appraiser for Metropolitan Life Insurance.
This legend was adapted from the original for the U. of Pennsylvania website:
The legend looks like the “colored” areas are coded yellow, but it’s actually red on the map. Brewer created another map in 1935 and helped draw the federal Home Owners’ Loan Corporation (HOLC) map of Philadelphia in 1937.
Redlining made it difficult for Blacks (and some White ethnics) to buy homes. Racial discrimination meant Blacks often couldn’t buy homes outside Black neighborhoods, but Black neighborhoods were often redlined by lenders, meaning Blacks couldn’t get mortgages to buy houses inside them, either. As a result, Blacks were disproportionately barred from one of the major avenues to acquiring wealth (building equity through home ownership), leading to increasing racial disparities in wealth and home ownership over time.
