THE EFFECTS OF THE 1930S HOLC ‘REDLINING’ MAPS.

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Aaronson, D., Hartley, D., & Mazumder, B. (2021). The effects of the 1930s holc "redlining" maps. American
Economic Journal: Economic Policy. Retrieved April 24, 2022, from https://www.aeaweb.org/articles?
id=10.1257%2Fpol.20190414 
After the Great Depression, house prices fell dramatically in the U.S. and caused the government to intervene
by creating agencies like the Homeowners Loan Corporation (HOLC) to help alleviate the crisis. Daniel
Aaronson, a researcher at the Federal Reserve Bank of Chicago, explored how the effects of the maps HOLC
created, introduced a systematic appraisal process that focused on the neighborhood’s characteristics such as
race, ethnicity, and immigration status. HOLC created a grading scale of neighborhoods A-D with A being the
least risky and most demand. D rated neighborhoods were often drawn or shaded in red, therefore creating the
term “redlining”. Redlining was a practice where those living in these regions would be denied access to credit.
These regions experienced worse housing markets, house values, and vacancy rates compared to the A-C rated
neighborhoods. The intended audience of this article are students and professors. To learn more about how
redlining effected the of segregation of neighborhoods check out the article on Racial Discrimination and
Redlining found below.

A trend of house values over the past 70 years in Washington

D.C. based on their rated area (A-D). Notice how D rated
areas have lower value homes compared to A rated
areas. (Aaronson et al., 2021)

RACIAL DISCRIMINATION AND REDLINING IN CITIES.

Zenou, Y., & Boccard, N. (2002, May 25). Racial discrimination and redlining in cities. Journal of Urban
Economics. Retrieved April 24, 2022,
from https://www.sciencedirect.com/science/article/abs/pii/S0094119099921666.  
It has been shown that minorities have an economic disadvantage due to the previously drawn redlining maps
all over the U.S. from the 1930s. Yves Zenou, a professor at University of Berkeley, shows that the lines
drawn gave minorities difficulties getting approved for credit and home loans. This negatively impacted their
reputation, rates of poverty, unemployment and created greater separation between white people. Zenou noted
how redlining caused the educational systems to become unequal. The suburban areas where white people
lived had superior education compared to the city-center where minorities lived. This low-quality education
leads to low unemployment for minorities and therefore leads to a generational impact that includes racial and
spatial discrimination. The result of redlining has created a segregation of minorities that endure economic
disadvantages that are unfortunately the norm around the country. intended audience for this article
is students, professors, and parents. To learn more about how segregation effects education in students go to
Kaitlin's annotated bibliography on Schools or Neighborhoods or Both? Race and Ethnic Segregation and
Educational Attainment in the achievement gap tab.