Home Owners' Loan Corporation Maps and Residential Security

<p>The Home Owners' Loan Corporation was established by the Home Owners' Loan Act of 1933 as a New Deal mortgage relief agency. Its primary purpose was to refinance distressed mortgages to prevent foreclosure during the Depression. As part of that work, HOLC produced 'Residential Security Maps' for over 200 American cities between 1935 and 1940, classifying every neighborhood on an A-through-D risk scale.</p><p>The map system used four colors. Green for grade A, described as 'best.' Blue for grade B, 'still desirable.' Yellow for grade C, 'definitely declining.' Red for grade D, 'hazardous' the source of the term 'redlining.' The neighborhood description files that accompanied the maps documented the criteria. Race was central. The presence of any Black residents, of recent Italian or Jewish immigrants, of Mexican or Asian families, was treated as a depressant on property values and an indicator of declining grade. A neighborhood with even a few Black residents was typically marked yellow or red regardless of housing condition.</p><p>The maps were produced by HOLC and shared with private lenders, the FHA, the Veterans Administration, and other federal mortgage programs. Whether the maps themselves directly caused subsequent disinvestment is a matter of ongoing historical debate; what is clear is that the underwriting practices the maps encoded continued to operate in conventional and federally insured lending for decades after the maps were produced. The neighborhoods graded D in the 1930s remained the neighborhoods with lowest investment, highest insurance premiums, and steepest property-value trajectories through the late twentieth century.</p><p>The University of Richmond's Mapping Inequality project digitized the complete HOLC archive and made it publicly available with the original neighborhood descriptions. Researchers comparing HOLC grades to contemporary outcomes have found that present-day disparities in homeownership, credit access, life expectancy, and educational attainment track the eighty-year-old maps with striking fidelity.</p>