Bus Tour Newsletter #15 – December 2021

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Have you ever wondered how two neighborhoods just one block apart can look so incredibly different? 

Structural racism and socioeconomic inequities benefit some while harming others. That is why Portlanders living one neighborhood apart can have vastly different qualities of life.

This month’s newsletter will discuss the outcomes of historical redlining, financial barriers to wealth creation, and ways to combat modern-day redlining on a structural level. 


Mapping Inequality is an interactive tool that shows mapping done by the HOLC divided up by which areas were considered safe for investment – green zones received the highest grade of “A” and were considered minimal risk while red zones were given the lowest grade of “D” and considered “hazardous” for investors.

Lasting Consequences of Redlining

The term redlining comes from a series of maps created by the Home Owners’ Loan Corporation – a federal agency meant to prop up the housing market during the Great Depression. Areas marked in red on the map were designated as “declining in value” and not coincidentally were where most non-white residents lived. Redlining in Portland led to areas which historically were home to communities of color, such as Albina, being systematically denied access to financial opportunity, while other neighborhoods developed more prosperously. While this type of “formal” redlining was outlawed by the Fair Housing Act, it had far reaching impacts, and was quickly replaced with other practices which we might call modern-day redlining.

Access to resources and public investments can have enormous consequences for a neighborhood’s residents, from the quality of schools to the amount of funding it receives for projects such as roads and parks. Evidence of this divide in access or distribution of resources along racial lines is blatant in this investigation that found that nationally, predominately white school districts get a staggering $23 billion more than nonwhite districts each year. 

Many of the neighborhoods which suffer from disinvestments today were once considered “blighted” because of their racial makeup. By 1950, about half of the new home purchases in America were made with government-backed loans and 98% of them went to white buyers

Fast forward to 2019 and the typical white family had eight times the wealth of the typical Black family and five times the wealth of the typical Latinx family, a direct result of the lack of opportunity to wealth-building through access to homeownership. There is preliminary evidence that this gap has widened during the COVID-19 pandemic.

There is also a direct correlation between the discriminatory redlining practices of our past and the current demographics of different neighborhoods. This National Community Reinvestment Coalition (NCRC) study shows that 74% of the neighborhoods that the Home Owner’s Loan Corporation (HOLC) graded or “redlined” as high-risk or “Hazardous” eight decades ago are low-to-moderate income (LMI) today and almost 64% of the HOLC graded “Hazardous” continue to be home to a majority of residents of color. 

The NCRC study also shows that historically redlined neighborhoods, those that the HOLC deemed to be highest risk, “Hazardous” neighborhoods, are also now associated with greater economic change and higher levels of interaction between Black and white residents while still maintaining a greater economic inequality in many cities. HOLC “Hazardous” grades created decreased home values for decades, making these areas particularly vulnerable to the impacts of economic displacement. 


Graph showing change in home values in Northeast Portland neighborhoods from 1990 to 2000. Source: Bleeding Albina

Black Portlanders now make up over 9% of the population east of 82nd Avenue, which is a 2.2% increase from a decade ago. The same demographic population has continued to shrink in inner North and Northeast Portland. However, nearly 11% of residents identify as Black in this area – still the highest concentration of Black residents in the city. 

This overall trend of demographic change can be attributed to what often is termed gentrification and the involuntary economic displacement of Black residents. In places where these dynamics have overwhelmingly displaced former residents, like in Northeast Portland, resources are now finally flowing into the community – but not to those who were displaced. This 2016 article published in The Atlantic and this story map detail the history of disinvestment in Albina all the way up to the 1980s and its revitalization since the white population has increased.

In her seminal work, Bleeding Albina, Dr. Karen Gibson describes this process of greenlining that took place in Albina in the 1990s:

Whites bought homes, displacing many low-income folks to relatively far-flung areas where they could afford the rent. The White home ownership rate escalated from its rock bottom of 44 percent to 61 percent in just ten years. Housing values, as a percentage of the city median, rose significantly, from 58 percent to 71 percent. This sharp rebound in Albina property values, which corresponds with the increase in White home ownership, reveals the continuing correlation between property valuation and race. (p. 21)


Financial Barriers to Generational Wealth Creation

One of the least conspicuous ways to keep neighborhoods segregated historically has been through creating financial barriers to homeownership. One example is Albina residents, who were systematically denied loans from local banks and were charged higher insurance rates for decades. 

Discriminatory financial barriers enacted over time have also led to major inequities in current home values. Although redlining has been outlawed since the passing of the Fair Housing Act in 1968, the outcomes of virtually sectioning off “less desirable” neighborhoods through denial of access to resources and opportunity have led to the persistent racial wealth gap we see today. 

Another example of the legacy of redlining is in home appraisals. In the average U.S. metropolitan area, homes in neighborhoods where Black residents make up at least 50% of the population are valued at about half the price of homes in neighborhoods with few or no Black residents. 

One high visibility fair housing violation occurred in Indianapolis when Carlette Duffy, a Black homeowner, had her home valued by one appraiser at $125,000 and then at $110,000 by a different appraiser. Suspecting discrimination, she removed personal photos from her home and asked a white male friend to pose as her brother and act on her behalf, after which the appraised value more than doubled to $259,000.

Paul Austin, a Black homeowner in Northern California experienced discrimination as well this past October after he and his wife had invested $400,000 in home improvements and received a low appraisal. The appraisal went from $995,000 to $1.48 million after their white friend pretended to be the homeowner.


Combatting Modern-Day Redlining

In an effort to create greater opportunities for homeownership, The Community Reinvestment Act (CRA) was passed in 1977. According to the Federal Deposit Insurance Corporation, the CRA was intended to encourage depository institutions to help meet the credit needs of the communities in which they operate, including low- and moderate-income neighborhoods. NCRC is hosting CRA and Race, a free virtual event on Dec. 15th. The event will address the question: How can the Community Reinvestment Act be updated to directly examine race and better combat redlining?

This week the U.S. Department of Housing and Urban Development (HUD) released a statement from its agency, the Office of Fair Housing and Equal Opportunity encouraging lenders to seriously consider establishing Special Purpose Credit Programs (SPCPs), meant to address financial inequities and racial segregation. While some lenders have been afraid of violating the Fair Housing Act and other antidiscrimination laws by creating SPCPs, HUD issued this legal opinion reinforcing that some SPCPs that are legal under the Equal Credit Opportunity Act and other federal laws are not barred by the Fair Housing Act.

In the past several months, Fannie Mae, and Freddie Mac, two lending agencies controlled by the Federal Housing Finance Agency have made a groundbreaking move toward increasing accessibility to homeownership with a new initiative to establish creditworthiness on the basis of a renter’s on-time payments. There has also been a push from fair housing advocates for Fannie and Freddie to lower the cost of 15- and 20-year loans that typically have higher payments. This change could help mortgage holders build wealth more quickly and mitigate racial disparities in the housing market. 


                                                 Between 2000 and 2020, the Black population in Albina decreased by more than 10,500 residents. Since 2015, the Portland Housing Bureau has invested in the North/Northeast Neighborhood Housing Strategy to keep Albina residents in their homes and help those displaced to return. The program provides home repair loans, mortgage assistance and other resources to community members. The Housing Bureau has added 500 new affordable rental housing units in the Albina neighborhood, with preference to those displaced from these neighborhoods.

Portland’s Office of the Ombudsman recently released a report that found inequitable outcomes from Portland’s property maintenance enforcement system, stating that complaints are concentrated in neighborhoods that are rapidly gentrifying and have a higher percentage of people of color than the city as a whole. Created in 1914 during the Jim Crow era, the program’s complaint-driven system relies on fines to cover operating costs. One way to address the disparate impact of this program on Black, Indigenous and communities of color would be to stop relying on fees and liens to fund the program.

Ultimately, increasing access to affordable home loans would not only create homeownership opportunities for historically disinvested communities, but would also help to close the enduring racial wealth gap that discriminatory lending practices have created. Investing in the financial wellbeing of communities that were historically redlined would help to reverse the socioeconomic impacts of decades of housing discrimination.


We want to hear from you


Is there a particular topic we discuss on the bus tour that you are interested in learning more about? Does your organization host events related to racial justice or other topics that come up on our bus tour? Email your events and ideas to information@fhco.org to have them included in our future newsletters. 

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