The History

Chances are you have heard the term “redlining.” It refers to a decades-long government practice of insuring mortgages for white Americans while denying access to Black individuals and families. 

The term originates from the Federal Housing Administration’s (FHA’s) explicitly racist policy that gave rise to red color-coded federal underwriting maps, which signified that a neighborhood was not considered credit-worthy. You can see an original redlining map of Buffalo in this report by Partnership for the Buffalo Good (page 5).

As Professor Mehrsa Baradaran explains in her book, The Color of Money, the FHA’s program was in effect between the years of 1934 and 1968, during which time “98 percent of FHA loans went to white Americans.” (Color of Money at 108). According to Baradaran, “The FHA did more to shape American life than any other agency created during the New Deal. It is also unparalleled in the injustice its policies wrought on the black population.” (Id. at 106). 

Modern Day

The name may have been generated from the red lines that once marked the maps of loan officers, but redlining is more than denying mortgages. Appraisal discrimination is another form of modern-day redlining. Appraisal discrimination based on race or color is a common modern-day practice. In recent years, countless headlines demonstrate that it persists today. Earlier this year, an appraisal company settled one of the most prominent cases, agreeing to significantly revise its “reconsideration of value” policies when clients raise concerns of racial bias.

Within the last few years, too, the Department of Financial Services (DFS) issued a report citing evidence of possible redlining in Buffalo, NY. (Feb. 2021). Notably, the report showed the percentage of home loans made to people of color were far lower than would be expected given their percentage of the total population. 

Unlike in its heyday, though, redlining is illegal, and there are legal experts working hard across the country to hold responsible parties accountable. Thankfully, we have some great resources locally as well. For example, Housing Opportunities Made Equal actively brings litigation to address housing discrimination, and they work with partners like the University at Buffalo School of Law’s Civil Rights and Transparency Clinic to level the playing field for marginalized communities. 

Let’s Hear From the Experts

We recently reached out to the Director of the Civil Rights and Transparency Clinic, Professor Heather Abraham, a fair housing expert, to ask her for some tips on how to spot redlining, and what you can do if you suspect someone is discriminating against you based on your race or ethnicity. 

“If you think something is awry, trust your judgment and report it,” said Abraham.

“Some of the most common appraisal red flags I see are: strange or inconsistent treatment by appraisers or lenders, and oral or written comments that suggest the neighborhood’s racial or ethnic demographics influenced the estimate or influenced which properties were selected as comparables. Often, your intuition tells you something is off—for instance, if the appraised value is tens of thousands of dollars lower than the contract, it’s worth taking a closer look,” said Abraham.

“Remember that you have rights in this process. You can ask the lender for a ‘reconsideration of value,’ explaining that you are concerned there was racial bias in the process,” said Abraham. “You can also consult an attorney and report your suspicions to Housing Opportunities Made Equal, which serves western New York.”

We hope you never need this information, but, if you do, we hope this article will serve as a reminder that you have choices, and you are not alone. 

Sincerely, 

Vanessa, Matthew & 

The Flipped Realty Team