The History and Legacy of Racist Housing Policies

Redlining in Michigan:

The History and Legacy of Racist Housing Policies

The unprecedented investment in American housing in the New Deal era (1933-1945) excluded and impoverished people of color. Consistent with their public goals, the Home Owners’ Loan Corporation (and later the Federal Housing Administration) directed the redlining of neighborhoods in over 200 cities across the United States if they had Black residents.

Even neighborhoods adjacent to residents of color were considered “declining.” An important nuance is that HOLC did not itself directly deny loans during its initial rescue phase. However, HOLC & FHA collaborated with private real estate groups to distribute racist appraisal practices, through trade publications, workshops, and events. In addition to the horrific direct effects on people of color resulting from redlining, the legacy of redlining includes the role it played in increasing racial segregation and contributing to the inequity of housing and wealth in Michigan.

Though redlining practices were made illegal in the Fair Housing Act of 1968, research shows its legacy continues today and yet many do not know the details of redlining or how its legacy continues today. We created this website with the intent of informing and starting conversations to confront the injustice and inequality. The history of redlining complicates contemporary housing policy and land-use planning. We hope that the details herein will spur discussions about our history and inform conversations and policymakers as we confront this history.

What was Redlining?

The inauguration of Franklin D. Roosevelt in 1933 ushered in a series of New Deal programs. Among the agencies created was the Federal Housing Administration (FHA), which still insures loans tendered by banks today, and the Home Owners’ Loan Corporation (HOLC), to purchase foreclosing mortgages and then issue amortized mortgages with lower interest rates. This was an unprecedented and enormous investment. By 1935, it had already refinanced one in five urban mortgages (Van Dusen 2019; 2020). These amortized mortgages include principal and interest payments, which facilitate equity and thereby wealth accumulation.

From 1935-1940, HOLC created risk maps for nearly all cities with population over 40,000. 239 cities (and many of their suburban municipalities) were – what became known as – “redlined.” Specifically, the federal government developed an Underwriting Manual required for appraisers to grade neighborhoods in cities as:

  • A, Green, “Best”
  • B, Blue, “Still Desirable”
  • C, Yellow, “Declining”
  • D, Red, “Hazardous"

Government appraisers, consistent with their required Underwriting Manual, almost always colored neighborhoods as “hazardous” if Black families lived there, regardless of economic class or single-family home status. The government was quite specific, writing for example, “If a neighborhood is to maintain stability, it is necessary that properties shall be continued to be occupied by the same social and racial classes.” Thus, higher ratings were to be given where there was protection against “infiltration of inharmonious racial or nationality groups.”

While HOLC did not itself directly deny loans during its initial rescue phase, it formalized and institutionalized these practices, sharing the maps with private bankers, who made copies and were eager to get their hands on the map for their city. HOLC maps were an integral (and an intention-revealing) part of a public-private ecosystem that created wealth in housing for some and not others (Winling and Michney 2021). HOLC and FHA collaborated with private real estate groups to distribute racist appraisal practices, through trade publications, workshops, and events.

Not only did government policymakers thus prevent Black families from participating in one of the most significant investment in middle-class wealth in United States history, redlining was also specifically used to segregate schools by increasing the risk rating where schools were not segregated (Rothstein 2017). It also encouraged loans where “natural or artificial barriers” (e.g., highways and boulevards, or train tracks) segregated Black people and White people, and specifically recommended “subdivision regulation and suitable [racially] restrictive covenants” and deeds (Rothstein 2017; Jackson 1985). Racially restrictive covenants were agreements between homeowners to not sell to “non-White” people, and racially restrictive deeds specifically contained language in the deed to prevent sale to “non-White” people.

After redlining maps were institutionalized by the HOLC, they were adopted by the FHA, which continued to use and update the maps based, at least in part, on the race of residents until the Civil Rights Act of 1968. The federal government redlined 11 Michigan cities, including Battle Creek, Bay City, Detroit, Flint, Grand Rapids, Jackson, Kalamazoo, Lansing, Pontiac, Muskegon, and Saginaw, as well as many of their adjacent suburban municipalities. In Detroit for example, Dearborn, Hamtramck, Highland Park, Grosse Pointe, Ferndale, Royal Oak, Birmingham, and many more suburbs, were all included in the federal government’s redlining map, as a tool to segregate the suburbs along racial and ethnic lines. Click any city to see their redlining maps, a summary of the racist redlining justifications, and the legacy for each city today.

We still see the continued effects of this racist redlining in present-day racial segregation and related measures of racial inequity today in our Michigan communities, including homeownership, income, wealth, education, crime, pollution, and many other aspects of racial inequity.


This research was conducted by Michigan State University Extension Specialist Craig Wesley Carpenter, Ph.D. (carpe224@msu.edu).