In response to the Great Depression, the Federal government created the now defunct Home Owners Loan Corporation (HOLC). The Agency drew maps, like this 1939 map of Cleveland, of over 200 cities in order to document the “riskiness” of lending in neighborhoods in these cities. While neighborhoods were rated on physical characteristics, like housing age and quality, racial and ethnic makeup of communities were also considered. This led to the commonly known practice of redlining which is when creditworthy applicants were denied loans in yellow (Grade C) and red (Grade D) communities or communities of color.
The practice of redlining led to white flight and disinvestment in these communities of color, primarily Cleveland’s East Side, and set the foundation for social, economic, and racial inequities that our country still sees nearly 100 years later.