Unveiling Urban Injustice: The Impact of Redlining on Los Angeles County's Socio-Economic Landscape

Redlining was a federal government housing approach adopted in 1937 to protect the banking system when giving Americans credit to acquire houses. Dr. Fullilove states that it could help “banks to identify their possible “safe” and “unsafe” clients” based on race and the likelihood of people defaulting on the payment. Therefore, lenders discriminated against individuals to receive credit based on their race and residential areas. Bankers could become comfortable financing individuals from regions because there were few risks where most people from those regions could settle their loans. Redlining objectified tracking and identifying the individuals who could not qualify for loans from banks and could discriminate based on race where African-Americans, foreign nationals, and Hispanics were ineligible for loans whereas native whites received loans (Reft 4). Regions that the lenders thought were riskier to receive loans were marked red, and the Latinos and Blacks made up these more treacherous neighborhoods.

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The Great Depression was one of the economic hard times that most Americans remember. When President Roosevelt took office, he wanted to bring economic relief to all Americans through his reforms, the New Deal. The reforms led to the development of the Home Owners Loan Corporation (HOLC), which sought to make buying homes easier. HOLC enabled working individuals to acquire homes through small down payments and low-interest mortgages (Reft 5). With time, the federal government created the Federal Housing Administration (FHA) to guarantee mortgages with private financing through banks.

The banking systems had the authority to formulate liberal credit policies. The FHA made significant progress in enabling US citizens to purchase homes at minimal down payments (Avila 35). The FHA and HOLC worked with local actors, real estate agents, and lenders to establish investment risks in various places before banks could give out loans. These local actors judged a residential area or town based on socio-economics, race, and contemporary bias (Avila 35). The federal government conducted a city survey in 1935 and collected mortgage risk data from 239 cities and rated the results from A to D. A-rated communities represented the best home-owners and bank investments, whereas B-rated communities desirable neighborhoods (Reft 7). C-rated communities were in decline, and D-rated communities were hazardous (Reft 7). The HOLC designed these results into color-coded maps where A became green, B for blue, C for yellow, and D for red, leading to redlining in the US.

The Impact of Redlining on the Development of Los Angeles County

Redlining had a significant impact on the development of Los Angeles County. It led to a declined economic drive due to the naturalization of segregation. Specific county areas belonged to low-class Blacks, Japanese, and Latinos, such as Boyle Heights and Bunker Hills (Reft 9). People started segregating others and could not freely exchange resources to develop the county because they felt insecure when people from D-rated communities could move to the A or B-rated communities. Redlined individuals could not acquire any government credit to help them purchase houses, leading to a declined economic drive (Reft 8). Regional development requires every member’s efforts, but since the redlined members had no fiscal power, they did not help develop the county, leading to imbalanced development.

Redlining led to increased unemployment rates amongst the colored communities. The people lacked support from the government and were left congested in specific parts of the county without jobs or creating jobs. The lack of resources minimizes the development of Los Angeles County since many individuals do not contribute to the development. It also led to higher poverty levels and involvement in illegal activities such as crime. Crime discourages investors who could channel their financial resources toward developing the county. Increased criminal activities also deter people from moving into the county for involvement in any development activities, thus lowering it.

Socio-Economic and Housing Market of Claremont

I currently live in Claremont, LA. During the redlining period, the region had middle to high-class Mexicans who made it to receive a C-rating. The Mexicans were the dominant population, and the Mexican culture is prevalent in the area. Most people converse in Spanish, and I believe it is their first language. People have kept assimilating the Mexican culture and collaborating into American society and is no longer viewed as inferior. On the economic side, Claremont has developed rapidly post-redline era. Fewer people could receive loans from the HOLC, but community projects and industries have created business opportunities to improve their living standards, education standards, and economic drive. The housing market is currently competitive in my neighborhood. The trend has improved significantly since the redlining period.

Conclusion

To sum it up, redlining made American society naturally segregate. The rich became discriminative of the poor, while whites discriminated against people of color based on their residence places. Redlining further led to a declined economic drive where only a few had access to resources vital in the development process, which resulted in imbalanced regional development where some areas were well-developed while others were still developing. Although it helped people buy homes and survive the Great Depression, I think redlining made American society a race and ethnicity system.

Works Cited

Avila, Eric. Popular culture in the age of white flight: Fear and fantasy in suburban Los Angeles. Vol. 13. Univ of California Press, (2004):35.

Reft, Ryan. “Segregation in the City of Angels: A 1939 Map of Housing Inequality in LA.” KCET. Org. November 14 (2017).

https://www.kcet.org/shows/lost-la/segregation-in-the-city-of-angels-a-1939-map-of-housing-inequality-in-la