Will Presidential Candidates’ Plans to Address Redlining Work?

Several issues have gone missing so far on the debate stage among the Democratic Party’s presidential candidates, among them affordable housing and racial equity. This, despite the fact that living costs are going up while wages remain stagnant, and that the percentage of people—whites included—who believe that African Americans are getting fair housing opportunities, is at its lowest level in decades, according to Gallup.

So far, six presidential candidates have proposed policies that address both housing insecurity and historical racial discrimination in the housing market. Senators Kamala Harris, Elizabeth Warren, Cory Booker, and Bernie Sanders, along with South Bend mayor, Pete Buttigieg, and former U.S. Housing and Urban Development Secretary Julián Castro, have all submitted plans that specifically take a crack at addressing racial housing injustices. Some of them aim to reverse the damage done by redlining—the system in which government and financial market forces conspired to keep black people trapped in segregated and under-invested neighborhoods.

Some of those plans that target redlining propose offering down-payment assistance for certain first-time home-buyers in neighborhoods that were historically labeled as “hazardous” in the federal Home Owners’ Loan Corporation (HOLC) risk maps of the 1930s—the blueprints for redlining policies. Warren, Buttigieg, and Harris all offer this in the name of redressing and hopefully reversing redlining’s legacy, which is still keeping black families from building wealth today, according to numerous studies.

“A policy by any other name might be called reparations,” CityLab wrote earlier this year in reference to Warren’s plan.

That is indeed the idea, according to Mehrsa Baradaran, the University of California, Irvine law professor whose research serves as the basis for several of the presidential candidates’ redlining-aimed proposals.

Wrote Baradaran in her study “Jim Crow Credit”:

Most of the neighborhoods that were initially redlined in 1934 have been perpetually denied credit and thus remain pockets of poverty. Racial ghettos, once created, have had remarkable staying power. Across the country, these black ghettos are still the territories where the wealth and well-being gap are most drastically highlighted. These are the districts where poverty is still concentrated, schools are segregated, and properties continue to be devalued. By focusing a reparations program on geography as opposed to identity, policymakers can not only avoid the sacred cow of colorblindness, but they can link reparations with integration.

However, a new report from the Brookings Institution says that those policies likely won’t have the effect that the candidates think they will. Brookings fellow Andre Perry and research analyst David Harshbarger examined the current demographics of the residents who live in city neighborhoods that were redlined as “hazardous” in the HOLC maps and found that most of the people who live within those boundaries today are not African Americans, unlike when those zones were first drawn in the 1930s. Overall, there are more white and Latino people living in the formerly redlined neighborhoods today. Meaning, according to their analysis, that any policy based on the redlining maps would fail to comprehensively benefit black families—the demographic the plans seek to remunerate in the first place.

Of course, when looking closely at redlined neighborhoods at the city and regional level, there are still some that have a majority-African-American population today—Detroit, Birmingham, Cleveland, and Baltimore are a few examples. Chicago and Philadelphia have sizable black populations in their formerly redlined neighborhoods, but they still don’t match the white and Latino residential demographics in those zones.

Still, there is no region in which most of the formerly redlined neighborhoods have black populations comparable to when those red lines were first drawn. In the Northeast, the city with the highest percentage of black people still living in formerly redlined neighborhoods is Pittsburgh, where 36 percent of African Americans fit the bill.

However, formerly redlined neighborhoods do, in fact, still carry on the hallmarks of concentrated poverty and lower home values, according to the report.

“Clearly, these areas have suffered from a legacy of divestment, and deserve attention from policymakers,” the Brookings Institution researchers write. “But a strategy to close the racial wealth gap that focuses mainly on these now-diversified locations risks overlooking Black neighborhoods elsewhere.”

Many African Americans, particularly those of low-income, are now living in the suburbs of these cities, not the inner city, where the redlining most frequently occurred. Not only that, but recent federal housing policies, such as the replacement of public housing with mixed-income developments and the expansion of Section 8 housing vouchers, has dispersed black families across metropolitan regions while infusing more white residents into neighborhoods once almost exclusively inhabited by black residents.

Sociologist William Darity, director of the Samuel DuBois Cook Center on Social Equity at Duke University, anticipated this problem back in January when he told CityLab:

By avoiding making it a program that’s directed specifically at the families that either were living in neighborhoods subject to redlining, or families that indirectly lost income as a consequence of the impact of redlining given the existence of segregated residential areas, the bill is not designed to provide resources specifically to those families that were victimized. It actually gives resources to current residents.

The criteria for receiving down-payment assistance varies among the candidates’ plans. Warren’s housing plan is centered around the American Housing and Economic Mobility Act bill she introduced to the Senate last year. It would create a new HUD fund to help people buy homes in formerly redlined areas. This program would provide cash assistance for down payments to first-time homebuyers. To qualify, a buyer must have lived in the area for at least four years, and their earnings must fall within 120 percent of the area median income.

Harris’s approach is similar. Her plan would give down-payment assistance to homebuyers who live in areas that were subject to redlining or legal racial segregation. Unlike Warren’s plan, though, under Harris’s program, buyers could use these HUD grants to purchase a home anywhere in the country. They don’t have to be first-time buyers, although the plans requires buyers to use the home as a principal residence. Only buyers who have lived in a formerly redlined community for at least 10 years would be eligible for Harris’s program. And her legislation is meant to work with other bills to make credit scores more inclusive.

Buttigieg’s program is even more geographically focused. His plan would tackle hyper-vacancy, a term that describes communities plagued by very high shares of vacant properties—cities like Buffalo, Cleveland, and Detroit. Buttigieg’s plan would give vacant properties to homesteaders who would take full ownership over the houses as long as they occupied them for a decade. The homes would come with an extremely low-cost mortgage, payable directly into a homeownership fund, which would be used for improvement and maintenance for distressed properties.

Under the Buttigieg plan, only residents who have lived in designated pilot areas for three years and earn less than the area median income, or have lived in an historically redlined or segregated neighborhood for three years, can qualify for the program. Again, it’s a plan for building general wealth, not just redistributing cash: Homeownership is key. However, it is still subject to the same criticism that people who currently live in historically redlined areas are not necessarily the victims of decades of discriminatory lending policies.

There are other problems to plans based on homeownership in redlined communities. Many of the African American or Latinx families who live in formerly redlined communities don’t fit the profile of a first-time homebuyer, for example. They may own their homes now, or they may have owned homes previously. These residents may have been victims of predatory lending schemes or the foreclosure crisis. While a down-payment program targeted to residents from specific geographic areas might be a way to help some households build wealth (as opposed to a simple cash transfer), it is a near-sighted approach to making whole the victims of redlining, critics say.

There’s also the question of whether providing financial assistance for black families to purchase houses in formerly redlined districts would reinforce or even lock in the segregation that already exists—after all, it’s wealthy, white suburbs that need the integration and have the proximity to economic opportunities that black families could benefit from.

Baradaran addresses this unintended segregation problem by proposing housing vouchers for people looking to buy homes. Right now the federal government provides vouchers to low-income workers to rent apartments and houses on the private market. Baradaran proposes expanding the voucher system to allow people to purchase homes in any neighborhood, but helped along through a “shared equity mortgage,” wherein a private investor or government actor would jointly own the property with the voucher recipient. At the end of a loan term, the equity of the property would be evenly split between the homeowner and the investor, and in the event of a default, the investor would claim the property. But the vouchers would still be awarded to people who’ve lived in formerly redlined communities.

Baradaran also acknowledges that using the redlining maps of the 1930s might be suboptimal in capturing the black families intended for the benefit, because of changing demographics. But just because the players in these neighborhoods have changed doesn’t mean the game has.

“This does not mean that segregation patterns have been disrupted or that the same forces that created the racial wealth gap are still not in play,” Baradaran told CityLab. “What it means is that many communities have been re-segregated to new spaces and it’s usually not difficult to see how these formerly redlined populations have moved to different regions.”

Black people who once lived in redlined St. Louis have been priced out to suburbs like Ferguson; black folks in once-redlined, but now-gentrified Harlem were uprooted to places like the Bronx and Yonkers. Washington, D.C., was not covered by the HOLC maps of the 1930s, as the Brookings report points out. However, that doesn’t mean that no redlining occurred. As Greater Greater Washington reported in 2016, the organization Prologue DC created the Mapping Segregation in Washington D.C. project to show how certain neighborhoods, such as Mt. Pleasant, Columbia Heights, Park View, and Petworth, refused to sell houses to African Americans in the early 20th century. Neighborhoods in the southeastern quadrant of D.C., along the Anacostia River, became redlined for low-income African Americans by default.

“Some of the redlined areas are still intact, but many are not—that does not mean that we give up on a remedy; it just means we re-map these populations,” says Baradaran. “The Brooking authors are right that we need to look carefully at those borders, but I don’t think anyone that has proposed targeting these communities with housing subsidies has been under the impression that we would use the exact same maps. I helped several of the candidates with their policies and each one, we drafted the provision to help the people who were affected by housing segregation, not just the few redlined blocks.”

Whether the redlining maps of the 1930s align neatly with today’s maps of inequity or not, the problems and legacy of racist housing and investment discrimination still need to be addressed. A landmark survey released in August by The Groundwork Collaborative found that a majority of black adults believe that the economy is rigged against them in favor of the wealthy, and 50 percent of African Americans cited finding affordable housing near their jobs or family a challenge—a third said it was a “big challenge” in their lives. These are beliefs and attitudes that can’t be easily traced or shaded over. But this is also an issue that the nation can no longer afford to be colorblind toward.

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