2020 exposed us all to a much-needed change in perspective and jump-started hard conversations about race and the ongoing systemic issues that exist in the U.S. today. The problems people of color experience aren’t new, and while we are making great strides in our communities towards change, there is still much to do be done. 

An issue that is very close to our hearts here at Holladay Ventures is the ongoing effects of redlining – a form of lending discrimination. Though it has been outlawed for decades, its scars remain visible in many communities across the country. 

For decades, many banks in the U.S. denied mortgages to people, mostly people of color in urban areas, preventing them from buying a home in specific neighborhoods or getting a loan to renovate their house. Once backed by the U.S. government, the practice started in the 1930s and took place across the country. 

As a result, banks and other mortgage lenders commonly rejected loans for creditworthy borrowers based strictly on their race or where they lived. As part of that practice, financial firms, real estate agents, and other parties demarcated geographic areas that were effectively off-limits for issuing loans. 

Scholars who study housing discrimination point to redlining as having created incredible gaps in the access people of color have to affordable housing options and homeownership, which has stifled household wealth creation in those communities.

A history of racist and exclusionary policies, including redlining and housing covenants, has created a gap in homeownership between white and Black Americans, locking Black families out of a significant source of long-term wealth creation.

Now, Black Americans face obstacles to acquiring wealth at the same level as their white counterparts. The effects of redlining are evident in the existing wealth gap, and a lack of affordable housing further perpetuates this system. 

Affordable housing is one small step in correcting this systemic problem. Ultimately, redlining has negatively impacted education in these districts, directed funds away from proper health care, and created a nearly inescapable cycle with the increasing cost of living. 

While there are many other issues on race and Black Americans’ experiences in this country, we know that there is at least one area to create a significant impact – affordable housing.