How the City Survey’s Redlining Maps Were Made: A Closer Look at HOLC’s Mortgagee Rehabilitation Division

The infamous “security maps” made in the 1930s by the Home Loan Owners’ Corporation (HOLC), rating supposed mortgage lending risk in urban neighborhoods across the United States, have long been considered the quintessential expression of racist redlining policy. However, a number of misunderstandings and unwarranted speculations about how these maps were made and used have proliferated. Using previously unexamined correspondence, this article establishes that HOLC could not have used the maps for loan denials, did share them with the Federal Housing Administration but not with private industry, and highly improvised their production with numerous methodological inconsistencies, including with regard to race.

Does the Temporal Pattern of Moving to a Higher Quality Neighborhood across a 5-Year Period Predict Psychological Distress among Adolescents? Results from a Federal Housing Experiment

Using the Moving to Opportunity (MTO) experiment (1994-2002), this study examined how a multidimensional measure of neighborhood quality over time influenced adolescent psychological distress, using instrumental variable (IV) analysis. Neighborhood quality was operationalized with an independently-validated 19-indicator child opportunity index (COI), linked to MTO family addresses over 4-7 years. We examined if being randomized to receive a housing subsidy (versus remaining in public housing) predicted neighborhood quality across time. Using IV analysis, we tested if experimentally induced differences in COI across time predicted psychological distress (N=2829; Mean(standard deviation (SD)) = -.04(1.12)). The MTO voucher treatment improved neighborhood quality for children compared to in-place controls. A one-SD change in COI since baseline predicted 0.32 point lower psychological distress for girls (B(95%CI)= -0.32 (-0.61, -0.03)). Results were comparable but less precisely estimated when operationalizing neighborhood quality as simply average post-random assignment COI, (B(95%CI)= -0.36(-0.74, 0.02). Effect estimates based on a COI excluding poverty and on the most recent COI measure were slightly larger than other operationalizations of neighborhood quality. Improving a multidimensional measure of neighborhood quality led to reductions in low-income girls’ psychological distress, and this was estimated with high internal validity using IV methods.

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The economic collapse that set into motion the Great Depression of the 1930s was portended by mass mortgage defaults in the mid-1920s. To address this unprecedented housing crisis, New Deal legislation created the Federal Housing Administration (FHA) to insure mortgage loans. Without predecessors or peers and faced with a national emergency, the FHA turned to risk-rating experts in real estate valuation to craft underwriting policies that would shape the geography of the country and cement racial segregation in the United States for generations to come. Chapter 3 details how FHA officials utilized risk-rating standards that disqualified people of color from obtaining federally subsidized mortgage insurance. This institutional discrimination had the deleterious effect of essentially precluding people of color from obtaining middle-class America’s most important wealth-generating asset: the single-family home. Though others have written about the agency’s policies before, my analysis is notably the first to locate each version of the FHA’s underwriting manual, to take stock of each facet of race-based risk rating until the conclusion of the practice in 1947, and to analyze the agency’s effect on the lending industry thereafter.