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Abell: Redlining in Lynchburg

This is a map of the city of Lynchburg with the boundaries of 1937 showing the ranked housing areas, as determined by assessors for the Home Owners Loan Corporation. Regions shaded green — “A” areas — were rated the best and safe for the HOLC to issue new mortgage loans to rescue homeowners; the desirability of neighborhoods then went from “B” (blue) and “still desirable” to “C” (yellow) and “in decline or transition” to “D” (red) and “hazardous.” The “red-lined” neighborhoods were all-black neighborhoods and received little if any federal mortgage rescue dollars. PHOTO COURTESY OF JOHN ABELL VIA THE MAPPING INEQUALITY PROJECT AT THE UNIVERSITY OF RICHMOND

For years, I have been concerned about the racial dimension of Lynchburg’s persistently high poverty rate, currently at 24.3 percent (United States: 15.1 percent). In Lynchburg, 35.8 percent of blacks live in poverty, compared to 18.6 percent of whites. The black unemployment rate (13.3 percent) is nearly three times that of whites (4.5 percent). Regarding higher education — the presumed means to a better life — less than 13 percent of blacks hold bachelor’s degrees; for whites, that number is 41 percent.

Ta-Nehisi Coates (“The Case for Reparations,” The Atlantic, June 2014) suggests that there is a legacy of past racial injustices that carry forward through time. The Great Depression is a critical era in which to study such injustices. It was a period of struggle for nearly everyone: white and black. New Deal programs were created to address the unfolding calamity, laying the groundwork not only for economic revival, but for the building of a strong and stable middle class. Struggling homeowners were rescued by the Home Owners’ Loan Corporation (HOLC). Low-interest mortgages were issued by the Federal Housing Administration (FHA) and Veterans Administration (VA).

However, a careful reading of that history reveals that blacks were excluded from most of these benefits. For example, when banks refused to make loans in “red-lined” black neighborhoods, and when zoning restrictions categorically excluded blacks from the newer whites-only suburbs, then blacks were simply left out of the great American wealth-generating machine. The equity-building that blacks missed out on was passed along by white families from generation to generation, helping to fund college educations or start businesses, which in turn, allowed whites to command higher wages and better jobs.

That blacks were unable to benefit from these programs is not surprising. Recall that the Great Depression occurred in the middle of the Jim Crow era. The Supreme Court’s 1896 Plessy v. Ferguson, with its “separate but equal” language, was the law of the land, but blacks encountered little equality in daily life. They faced poll taxes and literacy tests, attended poorly funded schools, sat in the back of the bus, drank from “colored-only” water fountains and so on. The racism was so vitriolic that the U.S. Senate filibustered an anti-lynching law the House of Representatives had passed in 1930, forcing its eventual withdraw in 1938.

Thanks to the Mapping Inequality: Redlining in New Deal America project (dsl.richmond.edu/panorama/redlining/), we can examine a particular indignity that blacks faced during this troubled period; a critical piece of the missed opportunity for the generational transfer of wealth, namely the HOLC real estate security maps from the 1930s.

Since HOLC was providing billions of dollars of real estate loans, it felt compelled to appraise the stability of the neighborhoods in which it was making such a substantial investment. In employing hundreds of local appraisers to go out into the various neighborhoods seeking detailed demographic and real estate-specific information, HOLC was dependent on local experts to carry out the appraisals and relied heavily on local realtors. Consistent with the intolerance of that era, the National Association of Real Estate Boards had adopted a code of ethics that stated: “a realtor should never be instrumental in introducing into a neighborhood … members of any race or nationality … whose presence will clearly be detrimental to property values in that neighborhood.”

The sample (1937) HOLC check sheet for the Dearington neighborhood (C6) indicates the following areas of interest: terrain, income, the presence (and percentage) of “Negroes,” infiltration, the age, quality and market valuation of homes, the availability of mortgages, and more. The category of “infiltration” is where the racism of the HOLC security mapping is most clearly revealed. In Lynchburg, the infiltration that caught the eyes of the appraisers was that of Negroes. In other parts of the country, in addition to Negroes, there was reported infiltration of “undesirables,” “subversive races,” “low as possible” peoples and a wide assortment of immigrants and Jews. Toward the end of each check sheet was an important category: Trend of Desirability Next 10-15 Years. The assessment here represented a summation of the other categories and was critical to HOLC’s overall appraisal. Race was clearly the concern on the minds of the appraisers that trumped all other issues.

HOLC compiled these neighborhood appraisals into color-coded maps of every metropolitan area in the country. Each area was assigned one of four grades and colors. “A” areas (green) were rated the “best” areas with upward trends of desirability; safe for making new mortgage loans. “B” areas (blue) were considered to be “still desirable” but not as desirable as “A” areas because of their proximity to neighborhoods in transition. “C” areas (yellow) were neighborhoods in decline or transition because of factors such as “age, obsolescence, and change of style” and “infiltration of a lower grade population.” Finally, a significant presence of Negroes ensured that a neighborhood would earn a “D” (red) rating; hence the name “red-lining.” They were classified as “hazardous” as far as mortgage lending was concerned.

HOLC assessors surveyed 32 separate neighborhoods in Lynchburg. Four were deemed to be in the “A” category; three were in the “B” category; 15 were in the “C” category; and 10 were in the “D” category. With few exceptions, Lynchburg was completely segregated: Most neighborhoods were either 100 percent white or 100 percent black.

Residents living in the “D” rated neighborhoods had incomes as low as $500 per year and were classified simply as “Laborers.” In contrast, residents in the three Boonsboro “A” rated neighborhoods (A2, A3, A4) had incomes averaging $5,000 per year. Rather than classifying Boonsboro residents based on employment, the assessors described them as being the “Best People.” In contrast, in the only other “A” rated neighborhood, Fort Hill Addition (A1), the inhabitants were classified as “Professional.” The repair status of homes in the “D” neighborhoods ranged from “fair” to “poor”; in Boonsboro, they were all in “excellent” repair. Access to new mortgages in most “D” neighborhoods was listed as “limited” or “none”; in Boonsboro, the access was “good.” Homeownership rates in the “D” neighborhoods were in the 20-40 percent range; in Boonsboro the homeownership rate was 100 percent. For the “D” neighborhoods, the Trend of Desirability was characterized as “Hazardous.” In Boonsboro, the assessment was “Probably Upward.”

Nearly half of Lynchburg’s neighborhoods were given “C” ratings due to their proximity to “D” rated neighborhoods. It is in these “C” rated neighborhoods where we find railroad workers, clerks, mill workers, factory workers and general laborers. These neighborhoods were characterized as “declining” though; for most, the availability of new mortgages was “limited.” “Infiltration of Negroes” was occurring in four of the “C” rated neighborhoods. Dearington (C6), with a Negro percentage of 33 percent, provides an example. The Clarifying Remarks section of the check sheet makes it clear why this neighborhood got its “C” rating: the presence of a number of “D” rated neighborhood subdivisions.

The appraisers felt that in four of the “C” rated neighborhoods (C9, C10, C11, C12), the people there merited identification as being “Middle Class” rather than being identified as a particular class of worker. The upper Rivermont neighborhood (B3), despite having its inhabitants classified (along with their Boonsboro neighbors) as being the “Best People,” was given a “B” rating rather than an “A” rating because of its proximity to both “C” and “D” rated neighborhoods; likewise for the Westover Heights (B2) neighborhood, though its inhabitants were identified merely as “Clerks and Foremen.”

Imagine being one of the residents living in a “D” rated neighborhood back in 1937, wondering about your life possibilities. You probably aren’t aware that the government has declared your neighborhood to be “hazardous.” However, you are feeling the effects of that decision. You can’t get a loan. You are not welcome to move to a better neighborhood. You’re stuck. Suppose you’re living in one of those same neighborhoods today. You may have accumulated very little wealth. You’re likely among those without a bachelor’s degree. So the path ahead for you and your family is uncertain. You look to the city hoping something good might come from the Poverty to Progress initiative. Or, you look to the federal government, but you discover that HUD has removed the words “inclusive” and “free from discrimination” from its mission statement.

The redlined neighborhoods from 1937 are situated today in Census tracts that are among the lowest income in the city and have an average black poverty rate over 34 percent. And what about the “C” rated Dearington neighborhood noted earlier? It has continued its decline and is now part of one of Lynchburg’s lowest income Census tracts with a black poverty rate approaching 50 percent.

Reading through the details of Lynchburg’s HOLC security map and realizing that in the 1930s the government redlined a neighborhood a half mile from where I’m sitting at my desk at Randolph College is unsettling. Seeing the blatant racism of the past filtered through the lens of the 24.3 percent poverty rate of the present should give us pause to reflect and to take ownership of that past. Ta-Nehisi Coates’ case for reparations begins to make a lot more sense.

Abell holds the Carl Stern Chair of Economics at Randolph College. Visit his websites at jabell.go.randolphcollege.edu and lynchburgfood.go.randolphcollege.edu. He wrote this analysis for The News & Advance.

John Abell, Carl Stern Chair of Economics at Randolph College

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