One of the most heinous of these policies was introduced by the creation of the Federal Housing Administration in 1934, and lasted until 1968. Otherwise celebrated for making homeownership accessible to white people by guaranteeing their loans, the FHA explicitly refused to back loans to black people or even other people who lived near black people. As TNC puts it, “Redlining destroyed the possibility of investment wherever black people lived.” (via The Racist Housing Policy That Made Your Neighborhood - Alexis C. Madrigal - The Atlantic)
To understand the depth of the racism of these regulations, you have to read the descriptions of the grades that FHA gave to neighborhoods from A (green) to D (red). I’ve included them all at the end of this post, but here is the “C” classification (emphasis added), which is where my Oakland neighborhood fell (keep in mind restrictions as used here, means clauses, written into the title, not to sell to non-whites).
"Yellow areas are characterized by age, obsolescence, and change of style; expiring restrictions or lack of them; infiltration of a lower grade population; the presence of influences which increase sales resistance such as inadequate transportation, insufficient utilities, perhaps heavy tax burdens, poor maintenance of homes, etc. “Jerry” built areas are included, as well as neighborhoods lacking homogeneity. Generally, these areas have reached the transition period. Good mortgage lenders are more conservative in the Yellow areas and hold loan commitments under the lending ratio for the Green and Blue areas.
And, of course, the mortgage industry as a whole—the expansion of which allowed people without large savings or family money to buy homes—adopted many of these same practices. This had all sorts of truly horrific consequences for black people, black families, and black neighborhoods.