The wealth gap between the black and white communty is not an accident but rather the result of centuries of federal and state policies that have systematically facilitated the deprivation of resources for Black Americans. The median Black household in America has around $24,000 in savings, investments, home equity, and other elements of wealth. The median White household has around $189,000, a disparity that has worsened in recent decades.
The Federal Housing Administration (FHA), established in 1934, implemented a policy known as "redlining." The FHA refused to insure mortgages for properties in and near African-American neighborhoods, effectively denying financial support to those communities. The FHA's justification for this discriminatory practice was rooted in the belief that if African-Americans purchased homes in or near white suburbs, it would devalue the properties, thereby endangering the loans they insured for white homeowners.
The term "redlining" originates from the color-coded maps developed by the federal government particularly by the Home Owners Loan Corporation. The HOLC looked at 239 cities, and identified green "Type A" neighborhoods, mainly affluent suburbs; blue "Type B" for "Still Desirable;" yellow "Type C" for "Declining;" and the red-outlined "Type D" that would be risky for lending.
The redlined neighborhoods tended to be older districts in the inner city, and they were often also Black neighborhoods. Greenlined neighborhoods were made up mostly of white families. HOLC contracts explicitly prohibited the sale of properties to non-white individuals, further perpetuating racial segregation.
African-American families faced severe obstacles when attempting to purchase homes in the suburbs, primarily due to discriminatory policies enforced by the FHA. As a result, they were systematically deprived of the opportunity to build home equity and accumulate wealth. This wealth disparity has limited the ability of African-American families to provide educational opportunities for their children, support our families, and pass down intergenerational wealth.
HELLA INSPIRED.
