Question

How does redlining lead to inequalities.? What types of measures has the government undertaken to try to deal with these inequalities? 

Answer 1

Redlining was a prejudiced practice that makes financial and other services out of the reach of residents of different areas on the basis of race . It can be also found in the structured refusal of mortgages, insurance, loans, and other financial services based on location rather than on an individual’s merits and creditworthiness. Most importantly, the redlining is affecting the most residents of minority neighborhoods.

The term “redlining” was introduced by sociologist John McKnight. It was in the 1960s and explains how the federal government and lenders would draw a red line on a map around the neighborhoods from where they would not invest on the basis demography only.Black inner-city neighborhoods were most likely redlined. Findings say that lenders would give loans to lower-income Whites ,but not to the middle class or upper-income African Americans.

Examples of redlining also is found in a variety of financial services such as student loans, credit cards, and insurance. Even though the Community Reinvestment Act was enacted in 1977 to help prohibit redlining, critics argue that discrimination still exists. Reverse redlining is the practice of targeting neighborhoods who are non-White for higher prices or lending on unfair terms such as predatory lending of subprime mortgages.

Courts have ordered that redlining is illegal .But the lending institutions use race as a factor for excluding neighborhoods from access to thr loans. The Fair Housing Act, which is also part of the Civil Rights Act of 1968, prevents discrimination in lending to individuals in neighborhoods based on their racial composition.Anyways, the law does not prevent exclusion of neighborhoods or regions based upon geological factors, such as fault lines or flood zones.