Legal Definitions - redlining

Redlining is a practice where certain neighborhoods, usually inhabited by people of color, are denied financial services like mortgages, loans, and insurance based solely on their residency. This practice ignores the individual's qualifications and creditworthiness and is solely based on their race or ethnicity.

Redlining can also extend to the withholding of essential services like healthcare and grocery stores. The term originated from the U.S. Government's homeownership programs in the 1920s and 1930s, where maps were color-coded to determine loan worthiness. The color red was attributed to neighborhoods deemed unworthy of inclusion in the program, and most of these neighborhoods were predominantly inhabited by Black residents.

For example, in the 1980s, Atlanta banks would lend in lower-income white neighborhoods but would refuse to lend in middle-income or upper-income Black neighborhoods. Another example is this map from Syracuse, New York, which shows how certain neighborhoods were marked in red and denied government-insured loans.

The Fair Housing Act of 1968 prohibited discrimination in housing based on race, religion, national origin, or sex, and the Home Mortgage Disclosure Act of 1975 required financial institutions to collect information about their mortgage lending activity. These acts were adopted to put an end to redlining and race-based housing patterns.