What was Redlining?

Although informal discrimination and segregation existed in the United States, the specific practice of redlining began with the National Housing Act of 1934 which established the FHA. The implementation of this Federal Policy allowed the withholding of mortgage capital to purchase homes within 293 cities and created “residential Security Maps” These maps were outlined with Type A, Type B, Type C and Type D neighborhoods. Type D neighborhoods were outlined in red and they were generally black neighborhoods within the inner cities. FHA standards were written that if banks wanted to receive insurance for their loans it instructed banks to steer clear of “inharmonious racial groups”. Seattle’s redlined neighborhoods included the Central District, Rainier Valley and South Beacon Hill. Sellers in these redlined neighborhoods could not sell for true market value because buyers had restrictions on financing. Federal-reform bills called for major changes to these restrictions in 1975 and by 1977 redlining was no longer practiced.