WTTW News Explains
WTTW News Explains: How Did Redlining Work in Chicago?
To this day, Chicagoans live in a fairly segregated city — with the vast majority of the Black population living on the city’s South and West Sides, the Latino population on the West and Northwest Sides, and the White population on the North Side.
And that segregation didn’t happen by coincidence but by design.
It dates to a time when Blacks were prevented from buying homes — not only by real estate agents who “steered” prospective Black buyers to Black neighborhoods, but also by banks and the federal government — through a process called redlining.
Put simply: redlining is the act of denying people access to credit because of where they live and who they are, even if they’re qualified borrowers.
So how did Chicago use redlining in the early to mid-20th century to deny many Blacks from achieving the American Dream?
For an example on how the practice played out, let’s take a color-coded map dating from the early 20th century put out by the federal Home Owners Loan Corporation and Federal Housing Administration that indicated where it was safe to lend and insure mortgages.
Areas color-coded green or blue indicated neighborhoods with A or B ratings, considered the “best” or “desirable” areas for them to insure a mortgage.
A yellow, or C rating, meant the neighborhood was declining.
And red—or D—meant “hazardous.”
As you can guess, those neighborhoods rated “red” were largely Black and deemed too risky to insure mortgages.
A 1940s appraiser’s official notes refer to some redlined Chicago neighborhoods as “negro-blighted” or receiving an “increasing encroachment of negroes.”
Furthermore, Blacks were often prevented from moving into new, developing communities due to racially restrictive covenants or clauses — pioneered by Chicago realty groups — that explicitly prohibited Blacks from purchasing that property.
The inability to get federally insured home mortgages made Black residents vulnerable to predators who sold them houses “on contract” — giving the illusion of a mortgage, with none of the normal protections.
It wasn’t until the federal government enacted the Fair Housing Act in 1968, just days after the assassination of the Rev. Martin Luther King Jr., that redlining was made illegal and the barriers started to come down.
Unfortunately, the Fair Housing Act contained few provisions for enforcement, and so in many ways, the red ink of segregation remains today.
Stories about Chicago homeownership are supported by funding from The Chicago Community Trust.
