YOUNGSTOWN, Ohio (WKBN) – A 1938 report shows how redlining has directly impacted the growth of minority populated areas in Youngstown.
What is redlining?
Redlining is an outlawed practice that was used to discriminate against minorities.
The federal agency known as the Home Owners’ Loan Corporation (HOLC) would use redlining to determine the risk level of an area for real estate investment. The agency was created as part of the New Deal enacted by President Franklin D. Roosevelt from 1933 to 1939 to lift America from the Great Depression.
In actuality, the practice was a way to discriminate against minorities by deeming their neighborhoods a high risk for real estate.
Oftentimes, this meant residents applying for home mortgages would get denied simply because they lived in this area.
A map would be created, with areas outlined in red that were declared “undesirable.” There were four grades used to determine how desirable an area was.
- Grade A – Desirable
- Grade B – Still Desirable
- Grade C – Declining
- Grade D – Undesirable
The map above shows how the neighborhoods in the Youngstown area were outlined.
What determines if an area is desirable or undesirable?
In 1938, the HOLC released the Residential Security “Redlining” Map Area Descriptions. This description detailed the reasons neighborhoods in Youngstown and some surrounding suburbs were deemed “desirable” or “undesirable.”
The report listed these characteristics to be dominant factors:
Favorable:
- Recent improvement in business
- Real estate prices and rents now firm
- Low effective tax rate
- Low municipal bonded indebtedness
- Ample mortgage funds available
Unfavorable:
- Lack of diversification in industry – too much dependency on steel manufacture
- Unfavorable freight rates for heavy steel production
- Large number of steel plant employees working limited number of days per week
- Heavy relief load
- Large accumulation of delinquent taxes
- Slow real estate market
- As of yet, no reversal of decline in assets and private money of the savings and loan group
However, there were other factors included in the descriptions.
In every neighborhood that was deemed “Undesirable,” a common factor was that African Americans were living in the area.
In fact, in the description, it was listed as a “Detrimental Influence” if there were “Colored” people living in the neighborhood.
In this description above, you can see in the “Detrimental Influences” section it states, “Generally undesirable with increasing negro population.”
In one area of Campbell that was declared undesirable, the report stated that “Colored people are scattering throughout the area.” In a description of Struthers, which was reported to be 90% “Colored,” the report stated that it was a small section of “undesirable negro population” and that any property acquired should be sold “as quickly as possible.”
An area of the South Side near Glenwood Avenue was deemed undesirable, despite the report stating it had “better homes.” The report stated, “Small spots of negroes settling all through the area thereby threatening the entire district.”
These descriptions show a direct link between race and the value of a home or neighborhood.
How redlining prevented growth
Due to the determinations of the HOLC’s Residential Security “Redlining” Map, many residents in the areas designated as Grade C or Grade D were unable to obtain home mortgage loans and insurance.
In addition, property investors were less likely to choose areas that were said to be declining or undesirable, in turn causing a decrease in new homeownership in the area.
According to a 2020 Forbes article, “Black homeowners are nearly five times more likely to own in a formerly redlined neighborhood than in a greenlined neighborhood.”
Locally, the Youngstown area has struggled with poverty over the years compared to its majority white suburbs. In Youngstown, between 2015-2019 the average median household income was $28,822 compared to Canfield with a median household income of $81,637. During that time Canfield reportedly had a 92.9% white population, compared to Youngstown which had a 42.9% white Population.
Nationally, redlining is said to be a major factor in the wealth gap between whites and minorities.
According to Govinfo.gov, the 117th Congress released a resolution in March 2021, “Acknowledging the history and lasting impact of the Federal Government-created problem of redlining.”
The resolution states, “Whereas an income gap only explains a small portion of the racial wealth gap; Whereas housing, as the most common household asset and largest source of private wealth, is the largest driver of the racial wealth gap.”
It also states, “Whereas Federal Government redlining provided the financial foundation and legal impetus for the racially discriminatory housing practices principally responsible for a disparity in housing wealth.”
The outlawing of redlining
In 1968, the Fair Housing Act outlawed redlining for good. However, many effects from it are still felt today.
According to CBS News, in 2016 the median net worth of Black households was around $17,000 compared to white households at $171,000.
Still, some organizations have vowed to make amends for the wrong-doing. In 2020, JPMorgan Chase pledged to invest $30 billion into the Black and Hispanic communities in an attempt to close the wealth gap between people of color and whites in America. The plan is to fund 40,000 new mortgages over five years and 100,000 affordable rental units as well as 15,000 small business loans.
Below, you can read the full 1938 Residential Security “Redlining” Map Area Descriptions for Youngstown.
