Redlining was part of the color coding system developed by the Home Owners’ Loan Corporation (HOLC) and became one of the primary means of enforcing Black segregation.

As with so many things in the early twentieth century, the HOLC rating system was influenced by eugenics and biased race research. Rothstein (2017) noted that “[a] neighborhood earned a red color if African Americans lived in it, even if it was a solid middle-class neighborhood of single-family homes” (p. 64). In short, neighborhoods populated by decedents of English, Germans, Scots, Irish, and Scandinavians were far more likely to be greenlined (FHA loan eligible) than African American neighborhoods, which were usually redlined or yellowlined (non-FHA loan eligible).

The ghettos created by early neighborhood segregation in response to the First Great Migration were solidified and perpetuated through redlining by federal programs meant to assist people in need. The blatant racism of HOLC mapping becomes even clearer in the appraisal notes written for different neighborhoods. One appraiser in St. Louis, justified redlining a middle-class neighborhood for “it had little or no value today … due to the colored element now controlling the district” (p. 64). 

The systemic racism underpinning HOLC maps devastated African American homeownership and generational wealth (wealth and security passed from parents to children) produced by home equity.

Feagin (2014) argued that “A great many white families secured their significant family assets as a result of an array of white ‘affirmative action’ programs, including large-scale federal and state homestead acts from the 1860s to the 1930s” (pp. 20-21). He further argued that “Many whites accumulated enough home equity to use later on for start-up capital for businesses or funding education for children and grandchildren” (p. 212). These economic options were not open to people of color who had been legally relegated to sub-par neighborhoods and then told that those areas were now even less desirable because of the federal government’s redlining policy (Rothstein, 2015).

In the St. Louis area, the HOLC maps benefited economically successful white neighborhoods like North Hampton, Clayton, Richmond Heights, and Webster Groves, which were designated green and blue. Likewise, HOLC maps hindered underprivileged African American neighborhoods in midtown and downtown, as well as Carondelet and Tower Grove East, which were designated yellow and red.

The FHA and private financial institutions refused to underwrite mortgages in yellowlined or redlined areas, or did so at exorbitant rates, which contributed to their ongoing cycle of poverty. The U.S. Commission on Civil Rights noted in 1973 that the “housing industry, aided and abetted by Government, must bear the primary responsibility for the legacy of segregated housing… Government and private industry came together to create a system of residential segregation” (Rothstein, 2017, p. 75). 

The HOLC maps created what’s now known as the Delmar Divide.

The Delmar Divide separates historically underserved areas north of Delmar Boulevard primarily populated by Black residents and greater resourced areas south of Delmar Boulevard primarily populated by white residents. Today, if one superimposes the HOLC housing maps with maps of poverty in the St. Louis area, the result will be an almost identical match—yellowlined and redlined neighborhoods still struggle, while many blue and green neighborhoods thrive. The Mapping Inequality: Redlining in New Deal America (Nelson et al., 2018) project illustrates this reality (Bliss, 2015).

A study published by Washing University of St. Louis noted that it would take an estimated 228 years “for the average African American family to amass the same amount of wealth as the average white family” (Cambria et al, p. 10).