The Impact of Redlining in Northeast Pennsylvania

Summary of Study

The New Deal is among the most widely recognized pieces of legislature ever implemented in the United States. It was a system of public works projects, financial reforms, social welfare programs, and regulations enacted by President Franklin D. Roosevelt between the years of 1933 and 1939. Policies to promote homeownership were among them. However, practices called redlining resulted in homeownership access that was significantly limited for those who were members of racial and ethnic minorities – particularly African Americans.

More specifically, it was widely believed that property value plummeted once African American and other non-white residents moved into a neighborhood. For this reason, many property deeds included language allowing only persons of Caucasian decent to occupy and own certain property. Known as “racial covenants,” this form housing discrimination existed all over the county. Federal policies even encouraged the use of maps that delineated neighborhoods unsuitable for bank lending for mortgages. These “redlined” neighborhoods were based largely on the race of residents. Redlining of this nature significantly curtailed the ability of African Americans and other racial minorities to build wealth through homeownership. Even though redlining and explicit discrimination is no longer legal in the United States, the effects such practices have had on geographical racial concentration and present-day home prices are significant.

This means even after redlining and racial segregation were outlawed as legitimate practices, the separation it caused between races, ethnicities, and classes in neighborhood composition persisted. Particularly, lack of access to homeownership financing through federal incentives denied those in minority groups an important means to build intergenerational wealth.

Comparisons between modern patterns of residential diversity and poverty reveal only a moderate correlation with past redlining designations in the Wilkes-Barre area and the City of Scranton. One possible explanation for the apparently limited correlation between current spatial distribution of race and poverty, particularly compared to findings from other cities, is the changing nature of demographic diversity in Northeastern Pennsylvania since 1930 (the last census taken prior to development of HOLC redlining maps).

Read the full report here