Racial Disparity in Home Lending Is Today's Redlining

According to a new report detailing discriminatory lending in Chicago, people in majority-white neighborhoods continue to receive more loans, and in greater amounts, than people in majority-Black and majority-Latino areas.

1 minute read

June 11, 2020, 8:00 AM PDT

By Lee Flannery @leecflannery


Jacksonville, Florida

Rob Wilson / Shutterstock

New analysis from WBEZ and City Bureau shows the massive disparity in lending to residents of white neighborhoods compared to residents of black and Latino neighborhoods in Chicago. Linda Lutton, Andrew Fan, and Alden Loury call the practice "Modern-day redlining," describing "a pattern that locks residents out of home ownership, deprives communities of desperately needed capital investment and threatens to exacerbate racial inequities between neighborhoods."

When WBEZ and nonprofit newsgroup City Bureau reviewed 168,859 home loans between 2012 and 2018 made by banks and non-bank mortgage companies, they found that of the $57.4 billion loaned, 68.1% of cash funded people in majority-white neighborhoods with only 8.1% going to majority-black neighborhoods and 8.7% ending up in majority-Latino neighborhoods. Their report notes that while higher home prices in majority-white neighborhoods can explain part of the imbalance, the fact that "financial institutions made four times more loans in Chicago’s white neighborhoods than they did in black or Latino areas" obviously points to a much larger problem. 

According to the authors, injecting money into neighborhoods in the form of home loans is a fundamental way to impact the health of communities and the quality of life of its residents.

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