2021/04/01 by LaDale Winling, Todd M. Michney · 87 citations
Economics, Econometrics and Finance · Social Sciences · #Housing, Finance, and Neoliberalism #Political Economy and Marxism #Economic Theory and Policy #Business
paper · doi:10.1093/jahist/jaab066
published in Journal of American History 108(1), 42-69 (Oxford University Press)
openalex publication_date 2021/04/01 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/30
Racial segregation and racial inequality fundamentally shaped U.S. cities in the twentieth century and are key to understanding the American social and political landscape. A particularly notorious tool for promoting segregation has been redlining—the targeted denial of home mortgages and other financial supports according to presumed risk. Institutionalized by the Home Owners' Loan Corporation (Holc) and adopted by the Federal Housing Administration (Fha), historical redlining defined the riskiness of investing in urban neighborhoods based on demographics, infrastructure, housing quality, neighborhood stability, and proximity to amenities or hazards such as manufacturing. Holc's assessment of urban neighborhoods in the 1930s was racially and ethnically discriminatory. It used the power of the federal government to formalize patterns of segregation and discrimination.1 The work of journalists, public intellectuals, and public-facing digital projects has joined scholarly research on redlining, creating a wider awareness than when the phenomenon first came to light in the 1970s. Two related issues have dominated this discussion: the culpability of the federal government versus private industry in formulating redlining practices, and the priority of race in these discriminatory assessments. Urban historians have followed the lead of Kenneth Jackson, who embedded these dual concerns into the conversation from the outset. Fighting lending discrimination, activists and their academic allies had previously placed the blame squarely on private actors such as banks, seeking redress through the 1977 Community Reinvestment Act. However, Jackson's discovery of redlining maps produced for Holc's City Survey (1935–1940) provided dramatic new evidence of government culpability. The explicit racial and ethnic biases that Holc valuators expressed in their accompanying neighborhood descriptions offered a shocking confirmation of the hierarchical ranking of certain lending areas over others. Considering the unprecedented scale of the New Deal's intervention in housing markets, starting with Holc and subsequent mortgage guarantees provided through the Fha, such discriminatory mind-sets translated into unequal access to state subsidies underlying suburbanization—a point Jackson emphasized in Crabgrass Frontier (1985), his classic history of the suburbs.2 These findings, coming on the heels of the 1960s civil rights movement and its challenge to hidebound white racial prejudices, provoked a new generation of scholars to further explore how racism has informed U.S. housing policy. Subsequent research complicated the picture, demonstrating that Holc had lent in areas it later designated as “hazardous.” As a result, some scholars questioned the relative importance of race in Holc's appraisal calculus. Jackson himself had noted a seeming paradox in federal housing initiatives: even as a major bureaucratic apparatus was devoted to designating certain neighborhoods as too risky for newly guaranteed long-term investment, African American borrowers received loans during Holc's initial “rescue phase,” although in ways that reinforced segregation. Economic historians, meanwhile, examined the efficacy of New Deal–era market interventions but left racial inequity out of the discussion altogether. More recently, scholars have moved beyond a Black-white racial binary to examine the effects of redlining on Asian American and Latinx neighborhoods.3 This article reframes the debate by examining the intellectual origins of real estate economics, how the resulting theories were channeled into collaborations with real estate professionals, and how the collaborators implemented them as federal policy, thereby restructuring the private real estate sector. In the work of the Institute for Research in Land Economics, founded by Richard T. Ely, we identify robust networks among academia, private industry, and government that developed, implemented, and spread these ideas. Federal policy makers considered more than just race, yet racism factored into the equation from the very beginning of the Great Migration. That population shift coincided with Ely's application of land value theory to urban areas and his efforts to aid the real estate industry's drive toward professionalization. The question of whether the government or private industry is more culpable for redlining becomes moot once we understand their elaborate intertwining via the networks created and populated by Ely and his collaborators. Fundamentally and intentionally discriminatory in nature, government redlining was private redlining and vice versa.4 Before a new system of home finance could implemented in the it had to In the home mortgages were to as as to to the and out to the value of a on scholars and came with for policy makers to the Great and these to them that a more system of home finance was the policy were in real estate and and the system of real estate Richard T. Ely a who was the new of real estate economics, the of this in scholars of his Ely joined the of political in In the and was the of the research for to as its populated and the among Ely's were Jackson and In Ely moved to the of to the of Economics, and Ely its of the in the Ely had and of on to government during the New A new intellectual movement the with Ely's and to through Ely was a who and a of and research over the of his This his academic and policy Ely the American Economic in and as its first was a of the to during the to and of the American for policy on land However, his had the in Ely to a on the civil and political of African a to the of the for the of Ely the and that was that the could have more such was the of urban a from Ely's in Land and it for to a the Ely and urban the financial of and home However, Ely real estate had his were the very of this Ely in founded the Institute for Research in Land was the Ely the of of and of public could and through of real to 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Ely, from founded the in and moved it to in Ely created the of land economics, a for the and with real estate and policy makers to the real estate sector. 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Ely, real estate professionals, and white racial and to real estate These efforts were to African American access to white neighborhoods and of even such were and were as with to these and neighborhoods the of the twentieth A more were for the of real estate to from to policy. In Ely a the American Economic on his and the of land who had his work on the and industry as a with the of and The the to beginning in work as of real estate and In the vice of the U.S. and Loan a of in the it a in and the of real estate finance a key the academic of real estate and the of home The devoted to such as the Loan in the A as their with and by and with the its of the That to by the a more and in of home his However, the Great Ely and his the to real estate the had some of the value of the lent to finance over the of the American a to and the in the real estate sector. 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estate to from Ely's but his and the of public policy and Ely some in with for his and the generation of provided the that the of New housing into The populated Holc and the with from Ely's who a of real estate and into the public policy In of the of the public and Holc in a City Survey created maps that on private and for neighborhood The and and on their for the newly and appraisal that shaped private in and home In the private and the created to real estate more and the American Institute of its and its first As a and was to lead these and into the federal the with the and to appraisal devoted to real In a of created the of as its and and as of the The appraisal were and had some a that as and the a from or were fundamentally with the of the and Holc the of a financial on the had with real estate and financial of such as and were real estate and financial the federal for the to their collaborators among real estate and Ely's was of the who the of and government policy in this A 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of its that to of of the other the on by and expressed that a neighborhood could a some to and Holc was the that in some cities the of by was in of this from Holc's to new lending that fundamentally from to the Great had and lending the or in other areas mortgages had been and but more with Holc that a finance to on that housing as a provided these loans had for that lending in areas to in the However, when to Holc that loans in areas could to a by whether further into that loans could in to for In his that in areas and in some of the areas a mortgage loans more the African American neighborhoods as a This was a from lending in certain in lending to and the Holc the as from a lending the of white borrowers were in to the in the had it more as have a as the white neighborhoods a later that these to the were to the of and to a could lending In this to the and to out of Holc's a This was designated the of and that a but in the the demonstrating the of the Holc's of real estate and in for the City and its The for New was in with the of the real estate and of the and from a real estate and the too the of the very real estate for the of these emphasized to the in of with real estate was even more as when a of the of to or when was created with from the on for followed Holc to with them of the his to In to a from to it was to for of the to the by that these maps are for the of the and their In some into their as when the areas from a had lent of his could that it the of the of these to Holc of the City maps government it the theories and them in other the and the just of the but of the with Holc them on The first the in a the work in maps to mortgage the of the of in on the of as in with his as as the and on the City by the discussion of the and of the maps in was a in the of and how to the the origins and work of the City Survey in a on in the was a of the for the was as just were with the on value to of and The was with on and as in the the of private industry to their on the the the by Holc and the on that the are the of the have been through their the article Holc's that these the of the had or and of the maps to or the of in of the Two of were to these of were Holc could and of the it of public or could it the as their and in with with Holc's with private were its The informed by that a to that of the in the its that neighborhoods a toward in of racial with is for to racial with The article a by his the used than Holc and had of it the and underlying the City This with a on the Home Owners' Loan City Survey The produced for the City Survey were and the were with the real estate and who in However, the of the was on in and even the and its were and real estate and home finance The for this was based The with private industry and was even more than Holc in value theories informed by the and of its was such was through the of the of and a article the as a that this was to other real estate industry and real estate finance have been by of of market and The on to that for in for government and private industry, racial and in explicit land value in the and In a particularly Holc by mortgages into that mortgages are considered to hazards too to by were a of to to a in Holc and the with private industry In the the federal their and and further the redlining In Holc and joined with from the American Institute of the of and the of Housing to the on and The was other than the vice were and of on the were Holc's from the Holc's first and who the Corporation of and of the and of Ely and The as a to research on real estate appraisal with its academic it to this the its the it in in This from major in real estate and home finance as as and others. by of the more than who by and among others. were and some of were to the the by its were on the Holc's City Survey the for as a aid to the to the whether the maps were Holc's that could for of although offered to the their with that the race into by population or of factored into its assessments. of was more out as we of real estate value that the of on value of the it a of as to whether a is or