What is redlining?

Redlining is a discriminatory lending practice that systematically denied services to residents in certain neighborhoods based on their racial or ethnic composition. This practice emerged in the 1930s when government-backed mortgages were designed to favor suburban homeownership among white Americans while excluding minorities, particularly African Americans, from access to these loans. The term "redlining" comes from the use of red ink to outline areas on maps where lenders would not invest, effectively marking these neighborhoods as 'high-risk' for lending.

The impacts of redlining have been profound, contributing to the long-term economic disparities and segregation in urban areas. It is now recognized as an unlawful practice under the Fair Housing Act, which aims to ensure that all individuals have equal access to housing opportunities, irrespective of race or ethnicity. Understanding redlining is crucial for real estate professionals, as they play a key role in working towards a more equitable housing landscape.