An History of Redlining


I was cleaning out the directories on my hard drive and I came across a draft of a paper that I had jointly worked on with Phil Mann at the University of Miami back in the late 80's. I thought that the part of it that dealt with the history of red-lining in Miami might be of interest to the rest of you.

John Little

see also Nationwide Insurance

The origins of the term "redlining" in Dade County Florida can be traced to the Home Owners Loan Corporation (HOLC), a federal New Deal agency of the 1930's. HOLC developed an elaborate appraisal and rating system for different neighborhoods in cities across the country. These neighborhood appraisals were plotted on "residential security maps". These maps were used for years afterwards as a tool for deny loans to residents of Dade County's black communities.

Type "A" neighborhoods, outlined in blue on the map, were those more affluent areas that were considered to be the most desirable for lending purposes. Type "B", outlined in yellow, although slightly less affluent than type "A", were also considered to be desirable for lending purposes. Type "C" neighborhoods, outlined in green, were generally sparsely populated fringe areas that were typically bordering on all black neighborhoods. All of the black and low income neighborhoods were characterized as Type "D" and were considered to be the worst for lending. Type "D" neighborhoods were outlined in red on the map (the origin of the term "redlining").

Although HOLC was a federal agency, its appraisal determinations were made by local mortgage brokers, bankers, and real estate men. In Miami, these businessmen reflected the general outlook of the downtown civic leadership which at that time was actively working to relocate blacks living near downtown into the sparsely populated area to the northwest.

HOLC "security maps" were available to local bankers (who, after all, had an important role in drawing them up) and were used in evaluating mortgage applications. The result was that bank loans were not available to type "D" communities. As a result, these communities were consigned to physical decay and intensified racial segregation. While some government subsidized loans were made in these areas, local financial institutions, using the security map classification system, strengthened their earlier discriminatory loan practices.

The effect of this "redlining" was to hasten the physical decline of the city and escalate the process of residential segregation. Miami has one of the highest rates of racial segregation of any major city and this has been one of the major contributing causes to the riots of the 1980's.

John Little