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Lessons from the study of redlining and health for green housing investment

by Nick Graetz, Mike Esposito

May 2, 2023

Key Takeaways

  • In a new paper, we discuss recent studies of redlining and health, including how using the color-coded maps drawn by the Home Owners’ Loan Corporation (HOLC) as a stand-in index for structural racism often misses the structural part of these processes, positioning the HOLC as a smoking gun. 

  • This framing neglects how the racist theory of property value central to redlining has only become more deeply embedded in new systems which structure health conditions in every neighborhood in the US – not just those once graded as “hazardous” by the HOLC. Most segregated, majority-Black neighborhoods with the lowest life expectancies today were not graded as hazardous by the HOLC. 

  • Still, we discuss how the political economy shaping these places was – and continues to be – built out of the racist logic of redlining. We connect these concepts to how private modes of extraction and profiteering are adapting to emerging climate risks, offering key points for federal intervention across environmental and housing policy such as deep targeted investment in green social housing.

Across academic disciplines and mainstream media, the framing of contemporary inequalities as a direct result of “redlining” has exploded over the past few years. Redlining is typically defined as the racist practice of denying access to federally backed mortgages and other forms of credit to Americans living in certain neighborhoods between the New Deal era (1930s) and the passage of the Fair Housing Act (1968) – and, in most tellings, is synonymous with the color-coded maps created by the Homeowners Loan Corporation (HOLC). 


Recently, these maps have been linked to various contemporary social and environmental problems, like urban heat islands and localized air pollution, and these findings have routinely been covered in popular outlets such as the New York Times and Washington Post. While attention to the historical forces that shaped contemporary American neighborhoods is important, we argue that the HOLC maps are only one part of this story. The HOLC’s intervention into neighborhoods is just one expression of a much larger public-private project conflating race with financial risk, which includes mortgage lending, credit ratings, municipal finance, consumer debt relations, and more. As Keeanga-Yamahtta Taylor describes in Race for Profit, the logic of public-private partnerships – the ways in which the government incentivizes the production of public goods through private actors – used to construct the modern real estate system has been reproduced to build, maintain, and profit from racial segregation far beyond the exclusionary practice of formal redlining. Interrogating this legacy will be critical for designing the New Deal style investments that are necessary for tackling climate change, while ensuring equity and redressing past harms. 


In our new paper, we first trace HOLC-graded neighborhoods over a nearly a century of urban change. We study how different mechanisms correlated with HOLC grades have shaped mortality outcomes today, summarized using a single statistic: life expectancy. Differences in life expectancy serve as a social mirror, the culmination of so many entangled systems of marginalization and oppression across the life course; as Ruth Wilson Gilmore contends, racism functions as the “exploitation of group differentiated vulnerability to premature death.” We find that contemporary residents of neighborhoods that once received a D or “hazardous” grade by the HOLC in the 1930s still typically live 6-years less than residents of communities that were once marked as Grade A or “desirable for investment” – and that this considerable disparity in premature death is mostly mediated through home values and racialized economic segregation that developed across these graded places in the following decades.


While examining the direct legacies of HOLC grades is important, this one-to-one matching of neighborhood areas between the 1930s and today can only get us so far in explaining the contemporary landscape of racialized vulnerability to premature death. Indeed, despite the HOLC’s explicitly racist motivations in grading – where having even one Black household in a neighborhood was often enough for that whole area to me marked off as too hazardous for investment – we show that a hypothetical intervention that would have ensured that all D-graded tracts had instead been marked as A-grade and enjoyed the rich history of investment that followed would only make a small dent in the 10-year life expectancy gap that we see across all Black working class and white professional class neighborhoods today. 


When taken together, our results demonstrate a varied legacy of the HOLC-maps: marked neighborhoods did experience different historical trajectories over the following decades that shaped life expectancy within those places – and yet, these neighborhood trajectories offer little direct explanatory power for how stark mortality disparities arose across Black and White neighborhoods at the extremes of racialized and classed isolation. 


There are several reasons for why this might be. First, as many scholars have noted, there is often far too much causal emphasis placed on the HOLC maps themselves, at least in terms of how they contributed to inequality via a direct lending mechanism. More importantly, the practice of redlining is best understood as a deep public-private partnership involving many of the same individuals moving between the HOLC, government, and private real estate. While tracing the direct correlation between the HOLC maps and contemporary outcomes is inarguably important, we must also consider how the deeply racist nature of property valuation spread among these actors and how this generalized logic became baked into all sorts of risk calculus in the emerging neoliberal economy of the 1970s. For example, the logic of racialized property markets that motivated the exclusion of Black borrowers on all fronts during the 1930s/1940s subsequently evolved into a predatory form of inclusion, bringing low-income Americans (especially Black women) into low-quality homeownership in service of opening new avenues for exploitation and profiteering for private real estate interests. 


Why is understanding this more pervasive legacy of redlining logic – beyond the HOLC maps themselves – important today for contemporary environmental justice and climate policy? As in the New Deal and postwar era, we are again at an inflection point where massive federal investment is necessary to transition to a green economy. At the same time, while Black-white segregation is slowly declining, it remains extremely high in virtually all American cities. Over the past decades, planning projects related to highway construction and the siting of hazardous waste have reproduced the underlying logic of redlining without a formal instrument like the HOLC grades, prioritizing the maintenance and growth of home values in affluent white neighborhoods while redistributing the excess hazards associated with the urban growth machine onto disenfranchised Black neighborhoods. Today, energy burdens (i.e., the proportion of income spent on utilities like gas and electricity) are increasing and are especially high for Black households. At the same time, home energy use, which produces nearly one-sixth of the country's greenhouse gas emissions, is highest in affluent white suburbs and contributes to the urban heat islands concentrated in Black neighborhoods. 


While we have the opportunity to begin to dismantle centuries of racialized disinvestment that has placed the most marginalized at the highest risk of climate-induced harm, the risk remains as high as ever to again reproduce the legacy of redlining in new public-private partnerships. While formal redlining and urban renewal might be seen as blunt forms of violence, these logics and partnerships have informed the evolution of more indirect instruments of racial violence that drive place-based differentiation today, including the financialization of housing and health care, rent-setting algorithms, and more. Racial disparities in appraised property values increased during the pandemic, continuing the upward trend of race being more closely associated with property valuation today than in the 1980s. New algorithmic systems to manage and redistribute financial risks associated with climate change are exploding. For example, incorporating improved estimates of flood risk to speculation on future property values will continue to shape decision making by banks, investors, developers, and more. Where will these interests, often in partnership with local and state governments, decide to prop up future property values, and where will they instead use short-term models of rent extraction up until the day buildings flood and collapse, allowing them to safely cash out and leave tenants without a home? Where will desperate first-time homebuyers be steered into mortgages in overvalued flood plain properties where there are no regulations about informing buyers of the future risks?


Environmental injustice manifests the broader inequalities of American racial capitalism, including a long history of racial segregation maintained by public-private partnerships in real estate, inadequate environmental regulation, and the declining power of labor unions. Targeted investment needs to center community involvement, and especially center the rights of tenants. One important investment will be the construction of millions of units of green social housing. Entrenched interests will fight back as they did in the 1930s, when private real estate crushed the efforts of the Labor Housing Conference and the New Deal’s Public Works Administration to establish social housing in the United States. The reasoning was simple: a high-quality, non-market housing option would undermine the private sector’s ability to maximize profits. As demonstrated in our paper above, this production and protection of white property values at the expense of all else drove patterns of premature death and will continue to shape such outcomes until we address this fundamental redlining logic head on.

Thanks to decades of hard organizing work led by environmental justice movements and their allies, there is a new consensus in progressive American policymaking: governments must tackle climate change and social inequalities at the same time and in the same places. Governments must do this by directing disproportionate climate investments into the communities that have borne the brunt of inequality, disinvestment, pollution, and climate risk. But such targeted investment must also consider all the ways in which the implementation might be captured and distorted by the very same public-private partnerships that have built and profited from our segregated cities over the past century. An emancipatory research and policy agenda must deeply engage with the historical role of redlining logics in building the broader political economy of place we have today, including the fact that historical redlining grades are no longer a necessary instrument for maintaining the larger American project of conflating race and financial risk.

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