Redlining in Chicago
Redlining shaped Chicago's neighborhoods
and reinforced racial inequality. Redlining occurs when companies refuse loans, mortgages, and other assets to residents of neighborhoods with a specific racial or ethnic composition Redlining was perpetrated by the Home Owners Loan Corporation (HOLC), created to assist homeowners with loans after the Great Depression. However, the HOLC also practiced widespread racial discrimination.
The HOLC created maps color-coding the value of different urban neighborhoods that disproportionately labeled African American neighborhoods as declining. These maps set guidelines not only used by HOLC, but by also other sectors of the real estate industry, especially affecting the ability to obtain mortgages. |
Blockbusting and contract buying
African-Americans in Chicago were often refused loans and mortgages, and were forced to buy on contracts. These contracts were often confusing and inflated home prices far above value.
This graphic explains the process of contract buying. (CBL Exhibit). Click each strip to enlarge.
According to Clyde Ross, the Vice President of the Contract Buyers League, his house was bought a house on contract for $26,000, even though it was valued at $12,000.
"Contract sellers used every tool at their disposal to pilfer from their clients. They scared white residents into selling low. They lied about properties’ compliance with building codes, then left the buyer responsible when city inspectors arrived. They presented themselves as real-estate brokers, when in fact they were the owners. They guided their clients to lawyers who were in on the scheme."
-Ta-Nehisi Coates (The Case for Reparations)
The Contract Buyers League formed to resist these practices.