The term redlining was coined sometime in the 1960s and means the practice of disallowing specific services or increasing the cost of these services to the residents of certain areas that were typically determined on racial issues. These services include banking, insurance and also health care. The term comes from the procedure of drawing a red line on the map to indicate the areas that would be excluded. Eventually, the terminology was utilized to describe discrimination versus a group of people, not based on geographical location but based on race or gender. For instance, until the 1980s, in certain cities, banks would lend to whites in lower income levels but never to blacks in higher income brackets.
Informal segregation has permanently existed within the USA, though this practice has its beginnings in the National Housing Act, which was passed in 1934 and instituted certain practices that added to the decay of inner cities. Maps had been drawn up that identified several minority areas as disqualified for financing on suppositions about communities as a whole and never the credit worthiness of persons. This in effect meant that finance was denied to these minorities, who weren`t welcome in white majority areas in any case. This discrimination has involved, in addition to blacks, Hispanic and Asian communities.
This practice of redlining adversely affected a lot of housing markets, decreased the values of properties within these neighborhoods and goaded landlords to overlook maintenance and, in extreme instances, leave behind properties totally. Population density decreased and such abandoned properties were utilized as secure havens by criminal gangs like drug dealers.
To fight the practice of redlining, the Fair Housing Act was passed in 1968 and prohibited redlining that was primarily based on elements like race, religion or gender. This was followed by the Community Reinvestment Act in 1977, which forced banks to apply the same lending standards regardless of neighborhood. This made obvious redlining illegal, but stories indicate that the system continues in some areas in some other ways. Even in the 2000s, figures suggest that small businesses in black areas, despite taking into account local conditions like credit rating, received fewer loans. There are likewise reports that suggest that blacks shopping for houses in predominantly white communities are treated differently from blacks buying homes in largely black communities.
There`s also a trend called reverse redlining. Here, loan lenders and insurers target minority communities for business. The goal is not to deny them mortgages or insurance coverage but to charge them beyond what can be applicable to a majority community member in the same circumstances.
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