A recent study by the Kirwan Institute for the Study of Race and Ethnicity examines the implicit bias against minorities found in housing and credit outcomes today. Although we like to assume that lending decisions are conducted in an objective manner, this is a misconception.
Most recently, the housing crisis of 2007-2010 showed how toxic subprime mortgages were disproportionately marketed to, and therefore hurt, black and minority communities. In the past, segregated housing markets were established when the government, along with private industry, “redlined” black neighborhoods away from accessible financing.
HOLC Residential Security Map of Roanoke from 1937. “Redlined” areas indicated highest perceived lending risk based on high numbers of black families.
While redlining was an explicit process that no longer exists, the study (“Challenging Race as Risk“) argues that it reinforced structural barriers that contribute to implicit biases that remain prevalent, even in 2017. Efforts to guarantee equal housing opportunities must recognize and overcome the dangerous association between race and risk.
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