By Alice T. Crowe
Black Americans have struggled to build wealth in America through property ownership. Owning land meant freedom. Government policies like redlining and restrictive covenants cheated Black families and communities out of wealth.
Jim Crow’s color-coded paper maps were just one ruse in a trick bag of tactics used to normalize segregation and deny equitable distribution of resources to Black areas. In the 1930s, the Home Owners’ Loan Corporation created red zones where large numbers of Black residents lived, marking them “hazardous” or at risk. Loan officers, appraisers and real estate professionals used these maps to decide who was approved for a mortgage and who was denied. Those tattered, dusty maps might be better suited to museum exhibits. However, the red zone map strategies are still at work today. Now, federal funding cuts to housing programs will make it harder to defend against these schemes.
The latest redlining barriers are tucked away in algorithms that determine credit scores, target advertisements, set insurance rates and even decide which neighborhoods receive investment in digital infrastructure. The result is the resuscitation of an aged, rickety Jim Crow who many believed was dealt a death blow by the 1968 Fair Housing Act. That legislation made it illegal to discriminate in the sale or rental of a home. Despite the efforts to beat back Jim Crow policies, his barriers to Black homeownership still stand today. The Black-White gap in homeownership rates was the same in 2020 as it was in 1970, just two years after the passage of the Fair Housing Act of 1968.
Current-day redlining practices are digital, making it easier to undermine and destroy thriving Black neighborhoods, denying Black homeowners or those seeking housing equal access to available properties on the market. The use of technology may make this seem innocent or even random because the blatant signs of racism are not as obvious. The unseen hand that does Jim Crow’s dirty work is hidden in the computer code that powers the devices that give us information. In its subtle way, technology facilitates the same result as Jim Crow laws; it helps exclude people based on race, ethnicity or socioeconomic status.
Who are the culprits who uphold the Jim Crow barriers? Housing market professionals. Housing market professionals are the gatekeepers of the housing market.
According to Elizabeth Korver-Glenn, author of Race Brokers and assistant professor of sociology at the University of North Carolina – Chapel Hill, “Housing market professionals are race and racism brokers. They subvert real estate business as usual. Housing market professionals, especially those who are White, actively create racially unequal housing markets and urban landscapes. They do so by using racist ideas to inform how they implement professional norms and policies and how they distribute their professional resources, including authority, knowledge and capital.”
Here’s how digital redlining works. Black people who live in a specific zip code searching online for housing will never see all of the available listings in their feeds. They were redlined out and never knew it. Zip codes are used to target people within specific demographics. This is called IP targeting, and it allows companies to show advertisements to specific IP addresses from their lists. An ad may show up to everyone in a particular area, except in specific zip codes where there are mostly Black residents.
Businesses can focus their advertising on specific homes or groups of dwellings within defined locations. This seems harmless, but it’s not. Three housing organizations filed a lawsuit in 2018 against Facebook, alleging its advertising platform helped landlords and real estate brokers exclude people of color, families with children, women, people with disabilities and other protected groups from receiving ads. The lawsuit was settled.
With the hidden hand of technology, private listing networks do the dirty work of restrictive covenants —clauses in deeds that barred homeowners from selling to Black people. Homes listed on private listing networks are marketed outside public platforms and made available only to a select group of agents and brokers within the network. Some are even by invitation only. These networks are not transparent. They deny equal access and make sure that White homeowners can sell their houses exclusively to other Whites.
Of course, real estate clients should be able to keep their business dealings private from public exposure of personal or financial matters. People going through divorce, bankruptcy or lawsuits shouldn’t have to deal with their business being put out on the street. Private networks enable sellers to test the market without exposure. Yes, they connect unique properties to serious buyers. The fallout to the Black community from decades of redlining has been irreparable. Secret unfair dealings steal resources from Black communities and expand the wealth gap. Private listing networks and IP targeting undermine fair housing and increase the risk of steering and discrimination based on race or other protected traits.
The federal rollback of fair lending enforcement, funding cuts and the focus on debanking, (the denial of banking service to a customer) and special-purpose credit programs make it easy for these schemes to get away with their racist agenda. The Black community must bank in Black-owned banks and credit unions. And require these institutions to provide capital where other financial institutions refuse. Black community members can create business districts within the Black community to circulate dollars and create jobs. Create land trusts and cooperative housing arrangements to enable Black communities to collectively own property, build wealth and keep housing affordable.
Still, states will have to fill in the gap. Individuals harmed by the new housing schemes must request explanations for automated decisions (like loan denials or low appraisals). They must continue to report discrimination, file lawsuits and not let lenders off the hook.
The opinions expressed in this commentary are those of the writer and not necessarily those of the AFRO.