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How did institutionalized discriminatory lending policies implemented under the guidance of the Federal Housing Administration (FHA)’s mortgage risk maps impact neighborhood trajectories? Have thes...

This article explores why and how homeowners in Bedford-Stuyvesant, Brooklyn, New York, took out subprime mortgage loans, and the effect of these loans on individuals and their community. It analyzes real estate histories for properties on four street blocks in Bedford-Stuyvesant by linking public data for real estate transactions with homeowners' descriptions of those transactions, gathered through interviews. Subprime lending flourished in a neighborhood that historically was redlined by conventional lenders, and created and exacerbated poverty, as it stripped equity from individuals and the neighborhood. Many homeowners in the study managed to combat this process of becoming poor, however. Homeowners are averting foreclosure while making sacrifices that are not apparent from data for mortgage foreclosures, neighborhood appearance, or initial conversations with residents and community leaders. Longtime homeowners' personal and neighborhood narratives of upward mobility and stability remain sacrosanct an...

The appraisal practices of the Home Owners’ Loan Corporation (HOLC) and its Residential Security Maps are often cited as major contributors to later redlining and the perpetuation of segregation through unequal access to mortgage credit. This article focuses on whether there was a relationship between the HOLC's neighborhood assessments and mortgage outcomes. Our results indicate that the agency was clearly instrumental in restructuring the home finance system and permitting far greater access to homeowner‐ship, but it is important to consider other factors in examining the HOLC's legacy in the reshaping of the mortgage market and the operation of the financial sector after the Great Depression. Specifically, the issue of increasing segregation in older cities in the late 20th century remains inextricably linked to both the shifting nature of real estate finance after the HOLC era and the demographic, economic, and residential changes affecting U.S. cities.

For two generations, urbanists have analyzed how residential mortgage lending reflects and reinforces inner‐city inequality. Yet the basic dichotomies of this literature have been eroded by parallel developments in community organizing, public policy, and restructuring of financial services. Securitization, institutional structure, and increasingly sophisticated market segmentation have altered the relationship between mortgage capital and the inner city, redrawing patterns of exclusionary redlining into more complicated, stratified inclusion into prime and subprime reinvestment flows. In this article, we analyze lending dynamics in neighborhoods at the nexus between gentrified reinvestment and enduring poverty in 23 large U.S. cities. A strong, sustained resurgence of capital investment is woven together with enduring racial‐ethnic exclusion that cannot be blamed on borrower deficiencies. Institutional restructuring and secondary‐market linkages reinforce newer class and racial‐ethnic inequaliti...

This article discusses the history and political economy of the neighborhood life-cycle or “stage” theory, an evolving real estate appraisal concept used as a basis for urban planning decisions in the United States. The life-cycle theory was revived by the U.S. Department of Housing and Urban Development after the urban riots of the 1960s and used by local planners to encourage the “deliberate dispersal” of low-income and African-American urban neighborhoods, followed by the eventual reuse of abandoned areas. Postriot urban policy can be understood as a dialectical process of social change. “Triage” planning was used to depopulate areas of social unrest. Conflict over the neighborhood life-cycle theory changed the politics of urban renewal, leading to a greater focus on redlining. Community-based development became an alternative to planned abandonment, directing public and private resources into redlined areas.

America's housing and mortgage markets are undergoing a dramatic transformation, as urban reinvestment and attempts to tap underserved markets of new homeowners alter historical processes of redlining and discrimination. This article synthesizes findings from case studies of private lenders, lender consortia, and nonprofit community organizations that are active in underserved markets and analyzes the strategies these organizations use to attract and qualify mortgage applicants and retain new homeowners. The case studies reveal a diverse array of strategies designed to address market imperfections related to information, discrimination, and household financial characteristics. Although these strategies expand homeownership opportunities, challenges remain. They reflect inherent tensions between the industry trend toward standardized, efficient business practices and the customized, often expensive programs needed to address the multiple obstacles to homeownership and community development faced b...

In 1988, the Atlanta Journal‐Constitution published “The Color of Money,” an influential series examining mortgage redlining in Atlanta. The articles documented wide lending disparities between white and black neighborhoods of similar income levels. Given sweeping changes in housing finance since 1988, we seek to determine whether Atlanta's racial geographic disparities in mortgage lending have changed. Analysis of 1992 to 1996 Home Mortgage Disclosure Act data reveals slight improvement. Atlanta's depository lenders made 4.2 times as many conventional home purchase loans per owner‐occupied unit to middle‐income white neighborhoods as they did to middle‐income black neighborhoods; a decade earlier, this ratio was 5.2. Nondepositories post lower ratios, particularly for Federal Housing Administration‐insured loans, but this market segment raises concerns because of potential abuses. By the indicator of most enduring theoretical and policy interest—conventional home purchase lending by depositories...

The Home Mortgage Disclosure Act (HMDA) and Community Reinvestment Act (CRA) were enacted in the 1970s to curb redlining, the discriminatory lending practice whereby financial institutions refuse to make mortgage loans to certain neighborhoods based on the racial composition of those areas or the age of their housing stock. HMDA and CRA implicitly sanctioned an important role for local citizen monitors, whose “regulation from below,” as it has been termed, was believed to be needed to augment the formal enforcement apparatus. In 1989, Congress amended both of these laws by expanding publicly available information on the lending practices of financial institutions. The paper reviews the early experiences with the new requirements and suggests some of the factors likely to determine whether grassroots organizations seek further reforms. While the use of “de facto” bank examiners succeeded more than many knowledgeable observers expected, it remains to be seen whether community‐based watchdogs can ke...