A Step Back in Time: Explicit Bias

By Sweta Patel, Consulting Controller


What is Redlining?

Redlining is a discriminatory practice that puts services – financial and otherwise – out of reach for residents of certain areas based on race or ethnicity. It can be seen in the systematic denial of mortgages, insurance, loans, and other financial services based on location, and that area’s default history, rather than on an individual’s qualifications and creditworthiness.

The History of Redlining
The term ‘redlining’ was coined by sociologist John McKnight and derives from how the federal government and lenders would literally draw a red line on a map around the neighborhoods in which they would not invest based on demographics alone. Black, inner-city neighborhoods were most likely to be redlined. Investigations found that lenders would make loans to lower-income whites, but not to middle- or upper-income African Americans.

In the 1930s, the federal government began redlining real estate, marking “risky” neighborhoods for federal mortgage loans on the basis of race. The result of this redlining in real estate could still be felt decades later. In 1996, homes in redlined neighborhoods were worth less than half that of the homes in what the government deemed as “best” for mortgage lending. That disparity has only grown greater in the last two decades.

Consequences of Redlining
The maps became self-fulfilling prophesies, as redlined neighborhoods were starved of investment and deteriorated further in ways that most likely fed white flight and rising racial segregation. These neighborhood classifications were later used by the Veterans Administration and the Federal Housing Administration to decide who was worthy of home loans at a time when homeownership was rapidly expanding in postwar America.

Access to credit (home mortgage and small business loans) is an underpinning aspect of economic inclusion and wealth-building in the United States. Historical restriction on access to credit has been a major contributing factor to the income and wealth gaps between whites and non-whites.



Gerrymandering is the practice of manipulating the boundaries of an electoral constituency so as to favor one party or class.
“Packing” is a gerrymandering tactic that concentrates supporters for a particular party and/or candidate into a single district, thereby decreasing their ability to influence the outcome of surrounding districts.

While many associate gerrymandering with partisan acts, some gerrymandering is the result of federally mandated minority-majority districts, which seek to ensure equal representation for minority groups. The hope behind concentrating minority voters into specific districts was to garner enough support to elect representatives that would reflect the needs and priorities of the minority voters in that district.

But, the establishment of majority-minority groups can result in packing. Because minority groups tend to vote Democratic, critics argue that majority-minority districts ultimately present an unfair advantage to Republicans by consolidating Democratic votes into a smaller number of districts. The increase in minority representation comes at the expense of electing fewer Democrats as the minority representatives were mostly replacing white Democrats.

This means that, as well as being disadvantaged by the lasting effects of redlining practices, minority voters can also be deprived of fair political representation.