The Ongoing Violence of Redlining

Redlining refers to practices of racist policies by which communities of color were economically excluded for investment by lending institutions, real-estate industries and all levels of government. These policies were enacted through the National Housing Act of 1934 and the concurrent establishment of the Federal Housing Administration, which helped codify decades of earlier exclusionary zoning into the policy of redlining, and was developed as part of an initiative to develop the first underwriting criteria for mortgages.

 

In 1935, the Federal Home Loan Bank Board (FHLBB) asked the Home Owners' Loan Corporation (HOLC) to create "residential security maps" for 239 cities. Between 1935-38, redlining--the long-standing financial practice of excluding communities of color from public spending and access to capital-- began. Redlining both codified a history of racist disinvestment of money, jobs, and other resources away from Black and Brown communities, and then used this same system of exclusionary zoning to keep historically divested neighborhoods (like ours) as a target of extraction and exploitation. 

 

By the 1930’s, exclusionary zoning was already the guiding principle of urban development from the early 20th century. While redlining began in the racist legality of segregation and exclusion, the legal prohibition of redlining ended with the passage of the Federal Housing Act of 1968, shortly after the assassination of Dr. Martin Luther King Jr.  While it may be true that the Department of Housing and Urban Development states that "The Fair Housing Act makes it unlawful to discriminate in the terms, conditions, or privileges of sale of a dwelling because of race or national origin”, the reality that many face in our community does not match this legal claim. While on paper, redlining and housing discrimination became technically illegal in 1968, investors, developers and real-estate industry responded by turning segregation and exclusion into “predatory inclusion”, described by American academic, writer, and activist Keeanga-Yamahtta Taylor in her 2019 book “Race for Profit. In “Redlining, Predatory Inclusion, and Housing Segregation” by Paige Glotzer, a look at Taylor's "Race for Profit," Glotzer reminds us that predatory inclusion started after redlining ended, and was purposely designed to where:

 

 “(...) Black Americans, low-income renters, and welfare recipients who were long shut out of the conventional housing market gained access to it on bad terms. Beginning with the Federal Housing Administration’s adoption of Section 235 and the subsequent passage of the HUD Act in 1968, the government created a public-private framework that insured unregulated mortgage banks against loss. Operators who profited from volume sales steered potential homeowners toward heavily marked up substandard structures where the buyer took on fee-laden debt. On paper, the new federal programs reversed decades of legal residential segregation by expanding homeownership opportunities. Yet the policies did little to challenge how the real estate and lending industries factored race into property value. As a result, the policies expanded a market already configured for white people to build wealth from homeownership and for low-income Black homeowners to be targeted for wealth extraction.

 

This predatory inclusion set up communities of color for loans with bad terms and further extraction and exploitation. It was this same predatory inclusion that eventually led to the burst of the subprime housing bubble and the resulting foreclosure crisis of 2007-08. Glotzer writes that  “(...) Areas that had been redlined bore the brunt of foreclosures after being flooded with bad credit. In this case exclusion and inclusion was both sequential and concurrent; first redlining starved areas of credit, creating conditions for financiers to reap profits from offering easy subprime credit as the only option. Lenders then steered African American buyers into subprime loans, creating second-class pathways to homeownership even when they qualified for cheaper options.”

 

Although redlining is traditionally understood and discussed as a static phenomenon &/or institutional policies by banks/cities that happened primarily between the 1930s-1960s, the reality is that the violence of redlining never ended. While redlining was “legally” prohibited by the 1960’s, the exclusionary zoning of redlining continues to set the community up for extraction, dispossession and exploitation. The underlying characteristic of racial capitalism is that in order to create value, it must be extracted. So while redlining may have been legally prohibited more than 50 years ago, exclusionary zoning became the underwritten policy of municipalities to keep historically divested neighborhoods in a cycle of devalorization. In today’s market, this means that involuntary displacement of the majority of our neighbors then becomes the market’s logical conclusion for creating greater profit-motives and surplus value for investors, at the cost of our future. When investors and developers seek great profit-motives from opportunities that rise from the lost value that come in the wake of the devalorization cycle, neighbors across the community again bear a disproportionate instability, stress, displacement and trauma by the destabilizing factor of rapidly rising rent gaps created by the seldom named price-shadowing effect of investments and speculation of property values:

 

Since 2013, billions of public funds have poured into the I-70 redevelopment and the National Western Center redevelopment, tearing apart the stability of our neighborhoods. The impact on neighbors in Globeville and Elyria Swansea (GES) has meant shouldering another disproportionate burden of these public and private investments. Between 2008-2018, our neighborhoods saw a 550% increase in property value, and 500% increase in property taxes, nearly three times the city average. The extractive model of development, as it exists today, drives and feeds off of this cycle of exploitation and devalorization. Instead of benefiting our neighbors, these types of investments and developments put current neighbors at odds with this kind of business model, because the price-shadowing effect of putting billions into new investment into redlined communities--  historically divested and exploited neighborhoods-- creates an extreme rise in land value, which is currently threatening to displace nearly 9 out of 10 homes across the neighborhoods today.  These extreme rises in property values and rent gaps are pushing us out of our homes and are traumatizing for our communities.

 

Like redlining, today’s housing and land use policies are facilitated through government, real-estate and banking transactions,  and are often supported through the creation of public subsidies, incentives, and public private partnerships (P3s). It is these state-created incentives that allow investors, property-holding firms, private development businesses and corporations to take advantage of historically divested areas (like our neighborhoods) and take advantage of divested values in order to exploit profit-motives through the devalorization cycle, to then again create new gains in the speculative market.

 

Our communities have learned the hard way that no reformist policies can rehabilitate this violence, and no bandage on the system of extraction can ever suffice, because this system of extraction works phenomenally well. In order to prop up values in areas of the city that the wealthy and upper-middle class inhabit, division, segregation and extraction is absolutely necessary for investor profits to be returned. The suffering of communities of color is not a byproduct, it is an inherent characteristic in this system. 

 

The collectively-experienced problems felt widely across the neighborhoods-- health problems connected to the  pollution from smelters of yesterday and the oil refineries of today; the pollution and disruption to connectivity from the highways and railways; the unfinished city grid including decades of missing sidewalks and street lights; the lack of stable housing; the surplus of neighborhoods housing in disrepair, the loss of neighborhood-serving businesses, the loss of access to fresh food to the rise of food apartheid; the loss of places for community to gather and meet; the loss of opportunities for community determination and organization-- all this harm returns to redlining as the source of  our inquiry when we seek to understand why our neighborhood faces these conditions, and why our neighborhood was designed in this way. The multiple and intersecting ways in which the community experiences the ongoing violence of redlining can barely be grasped, for how deeply them inform all urban investing and development.

Today, redlining shapes what kind of development comes to the neighborhoods, and sets up a long precedent of extraction that sharply defines the devalorization cycle, compounding widespread, racial health inequities across the neighborhoods. As it continues today, the ongoing violence of redlining defines the market logic that supports the maintenance of municipal policies and private investments that bring great profit-motives to a plentiful few-- while continuing to bring communities of color nothing but more extraction, more exploitation, more displacement and more dispossession.