What Is Redlining? Understanding Its History and Ongoing Impact on Fair Housing

In the world of real estate, we often talk about location, value, and opportunity. But behind the curtain of many American neighborhoods lies a deeper — and darker — legacy: redlining.

As we continue to honor Fair Housing Month, it's essential to understand redlining not just as a historical term, but as a systemic policy that shaped the housing market and contributed to racial wealth gaps we still see today.

The Origins of Redlining

The term “redlining” comes from the 1930s Home Owners’ Loan Corporation (HOLC), a government-sponsored entity that created residential security maps to guide investment in cities across the U.S. These maps used color-coded zones to rate the riskiness of real estate investments.

• Green zones were deemed “Best” (typically white, middle- or upper-class neighborhoods).

• Blue zones were “Still Desirable.”

• Yellow zones were labeled “Definitely Declining.”

• Red zones were marked “Hazardous.”

The red zones? Those were overwhelmingly communities of color — often African American, immigrant, or racially mixed — regardless of actual income, property values, or community stability.

This color-coding didn’t just influence where banks loaned money; it institutionalized racial discrimination in housing policy, effectively denying mortgages and development funds to redlined areas. The practice was backed not only by lenders, but also by federal housing policy — including the Federal Housing Administration (FHA) and the Veterans Administration (VA).

Redlining and the Wealth Divide

Redlining’s legacy goes beyond maps. It locked families of color out of homeownership, the primary driver of intergenerational wealth in America.

Without access to affordable financing, many Black families were forced to purchase homes through contract buying — predatory agreements where they had no equity, no legal protections, and could be evicted for missing a single payment.

Meanwhile, white families were being supported by government-insured loans to buy homes in new suburbs — further entrenching wealth and opportunity disparities along racial lines.

Redlining in Las Vegas and Beyond

Although much of the focus is often on cities like Chicago or Detroit, Las Vegas was no exception. Neighborhoods west of the Strip were redlined and marginalized, while federal and private investment flowed to newer, whiter suburbs. Racially restrictive covenants and lending discrimination meant that Black and Latino families were pushed into certain areas, regardless of their economic ability.

These patterns created segregated communities that still exist today — physically, economically, and socially.

Is Redlining Still Happening Today?

While redlining was officially outlawed by the Fair Housing Act of 1968, its effects are deeply embedded in real estate markets. Modern analyses show that formerly redlined areas still struggle with:

• Lower home values

• Higher poverty rates

• Reduced access to credit

• Underinvestment in schools and infrastructure

Even today, practices like “reverse redlining” — targeting minority neighborhoods for subprime or high-risk loans — continue to raise legal and ethical concerns.

Our Responsibility as Real Estate Professionals

At REBLaw, we believe understanding redlining is not just a history lesson — it’s a call to action. We have the tools and the legal framework to combat discrimination, but it takes vigilance, education, and advocacy to dismantle the legacy of exclusionary housing.

Whether you’re a REALTOR®, broker, developer, attorney, or lender, it's critical to:

• Examine policies and practices for implicit bias.

• Advocate for investment in historically under-resourced neighborhoods.

• Ensure compliance with fair housing laws — not just in letter, but in spirit.

  
  

Conclusion

Redlining was never just about maps. It was about who was allowed to build equity, live safely, and dream generationally. As we reflect during Fair Housing Month, let’s recommit to ensuring that everyone — regardless of race, religion, gender, or background — has equal access to the American dream of homeownership.