Location, Location, Location: Property, it’s Importance, and the Implications of Redlining

Real Estate is one of the most important resources on Earth. Wars are fought over it. Trade is structured around it. Wealth is built upon it. It’s the bedrock of world economies. Real Estate, and the people who live in different areas, are vitally important to the culture, development and future of those areas.

For these reasons, we’re writing a series of posts — from real estate to education to workforce and local economics — highlighting some of the social injustices we’re experiencing in the Bronx. These issues are intertwined and we’ll have a little overlap as we work through these realities. Throughout the series, we hope to inform and inspire as well as give some practical action steps to combat any social justice issues we come across. *This won’t encompass every issue or give every practical step*

One of the major reasons why real estate is valuable is because it’s a finite resource, as Will Rogers famously put it “Buy land, they ain’t making any more of it”. As humans, we have a basic need for space, and when there’s a high demand for a limited supply of something, basic economics tells us that the value of that resource should go up. But there are other reasons as to why real estate has value, that aren’t purely economic. The places we live in give us a sense of identity. I’m sure you remember your childhood room, the first school you attended, the neighborhood and people that lived where you grew up. The spaces in which we inhabit have a profound affect (along with genetics and upbringing) on who we are. In this sense, we are tied to the land in a way that simply cannot be quantified monetarily.

This is why redlining was such a problematic policy, and unfortunately still effects us today. Redlining is the devaluing of a neighborhoods real estate based on the inhabitants and housing stock (types of housing) of these areas. In 1933, on the heels of the Great Depression, the Home Owner’s Loan Corporation (HOLC) was created by the federal government to combat the rate of foreclosures while making low interest mortgages to homeowners.

Amy Hillier, in her article titled “Redlining and the Homeowner’s Loan Corporation” published in the Journal of Urban History, wrote:

Areas with African Americans, as well as those with older housing and poorer households, were consistently given a fourth grade, or ‘hazardous,’ rating and colored red… Refusing to lend to certain areas, particularly those with African Americans, was such common practice that apparently few people found it remarkable during the 1920s and 1930s… the map provides evidence that ecological and infiltration theories, racial prejudice, and real estate and appraisal industry codification of all these sentiments in combination with federal endorsement and promotion of them — not the maps, themselves — caused urban decline.

Essentially, lenders and corporations avoided making investments in black and brown communities — which demonstrated a devaluing of the people and the land they lived on. Lack of investment and economic activity caused these areas to lose money, and eventually decline (in value, appeal, safety) and this was all co-signed by the federal government.

When property values go down, property taxes go down as well. Property taxes are important to local governments and districts, and as we’ll see later, provide funding for the public schools within these districts. When property values go down, it is much easier for urban planners like Robert Moses to justify displacing hundreds of thousands of people and destroying communities for the sake of highways and other public works projects. When property values go down, and there’s a lack of investment in the community, there’s a disconnect in the sense of ownership for the people of these areas.

Now, I don’t only mean homeownership. Whether you rent or own your residence, there’s a sense of ownership. You don’t say “come to the place I rent”, we say “come to my home”. You don’t let people do whatever they want in your home, because it would be disrespectful to you and your home (owned or rented, apartment or house). Home is where the heart is because home is where the core of our being is formed with loved ones and the experiences we share with them. We’re connected to the memories, the people and the experiences of our homes ad neighborhoods. We take ownership of those things as they shape who we are and our affinity for them grows (my bodega, my park, my neighbors). When properties are devalued through redlining, the government and corporations have devalued the stories, connections, and identities of these communities of color.

Redlining essentially says “where you live, the places and the people you love, and the communities you’re part of don’t matter because they’re worthless.” It creates a cycle of poverty, deeply rooted in racism, abandonment, and control of power. It stifles economic growth and wealth creation — which is a form of power in the U.S. and especially NYC. Redlining didn’t just devalue or signal to those with power to avoid the red and yellow areas. Banks also avoided lending to small businesses and giving mortgages to residents in these areas. Black and brown communities were corralled into these areas but were not allowed to own or develop their communities financially. It was a two-fold effort to avoid development by those in power, and to systematically constrain residents from developing their own communities and gain power.

As these communities were blocked from economic growth through redlining, the generations that followed inherited a continuation of systematic abuse rather than real estate and assets — a privilege reserved for the wealthy. With very little assets in the hands of community residents, low property taxes to fund education, and a system that continued to create new forms of oppression, residents in the Bronx had to develop creative ways to provide for themselves and their families. Some of these ways revitalized the communities, while others were more criminal in nature, but both were responses to the economic realities of the area.

In order to combat and reverse some of the repercussions of redlining, we need to invest and take ownership of our own communities. This includes volunteering at non-profits that combat social injustice, loving and caring for our neighbors, and voting for representatives that are willing to listen and change policies that adversely affect our communities. It also includes investing in small businesses by purchasing their products or starting your own business, buying real estate (I know this isn’t a possibility for most people, but I encourage you if you can), and supporting initiatives that teach skills to residents. It means voting for and creating initiatives that serve those who are underprivileged and under resourced while using whatever privilege or advantage we have to help them as well. It means educating ourselves to our own history, to learning about policies and laws that hurt our communities, and to teaching others what we’ve learned.

Our next post will cover property taxes and the education system.


Originally published at thebxmagazine.com on November 21, 2016.