Richard Rothstein in The Color of Law chooses to focus on a range of government policies enacted in the United States that explain the existence of de jure segregation. Redlining, however, can work to explain the inner workings of the System. The practice of redlining began with the Home Owner’s Loan Corporation(HOLC) in 1933 and transformed as it manifested within the future policies of the Federal Housing Administration (FHA) in 1934 and the Veteran’s Administration following World War 2 (Rothstein, 63-6; 70). In general, redlining is the process by which these administrations determined the risk-value of homes and decided whether or not to insure a bank’s loan that would allow someone to own a house. The appraisal standards are founded both implicitly and explicitly on race. Any neighborhood with an African-American population was marked red “regardless of the applicants’ creditworthiness” (Rothstein, 67). The implications of this policy go beyond the its racist foundations.
Redlining exposes a key player within the System that seems to disappear within the confusion, the government. In the housing market, it was clear that administrations such as the FHA and VA held the majority of the power. For example, banks refused to issue loans without FDA approval and developments such as Levittown were dependent on FHA financial support that they could be labeled as “publicly assisted housing” (Rothstein, 66;72). Due to their unrivaled power over the development of the housing market, its explicitly racist policy created and solidified housing segregation that helped to internalize segregationist beliefs within individuals. For example, even though the FHA removed “inharmonious racial groups” from the Underwriting Manual in 1947, this did not signal a policy change because the idea that whites could not coexist peacefully with ethnic neighbors had become normalized and accepted (Rothstein, 66). Additionally, the underwriting of these communities fermented the belief that integrated neighborhoods were “bad risks”, “an unstable neighborhood” (Race: The Power of Illusion). Therefore, the racist practices of the FHA developed the hegemonic ideology that races could not coexist with one another. These practices also helped to control the imagination battle by defining what it meant to be white and black.
John A. Powell points this out in Race: The Power of Illusion by stating that whiteness has been reconstructed to mean living in the suburbs (Race: The Power of Illusion). Due to redlining practices, suburbia typically excluded people of color and transformed them through the shared imagination of the white community into invaders who would bring uncertainty and risk into the fragile white utopia (Race: The Power of Illusion). Ultimately, redlining aligned whiteness with material resources, the American Dream, and opportunities; redlining aligned blackness with inferiority, dangerous, and detrimental to society. It locked people of color into a certain place in the societal hierarchy so much so that people of color accepted that “they couldn’t buy into the development” and became locked in someone else’s imagination (Rothstein, 69). Such examples reveal how deeply the racists practices of redlining influenced society both then and now.