Painting the City Red: How Redlining Impacts Detroit

Detroit’s Metro area is among the most highly segregated cities in the country, ranking second among 25, according to a 2019 USA Today report.  Additionally, Warren, Dearborn and Detroit are considered some of the most segregated cities in America. A contributor is Detroit’s history in redlining which has helped to keep the city at the top of the list for decades. A practice rooted in racism and segregation, redlining creates an environment where the American dream of homeownership cannot exist for Black families.


Redlining is a practice dating back generations with an impact that has had a ripple effect for many Black families. Although the term was not adopted until the 1960’s, the act began under President Franklin Roosevelt in 1933. Under the New Deal post-depression era, the Home Owners’ Loan Corporation (HOLC) was created to help jumpstart the economy and provide home loans to the American people. However, such loans were purposely withheld from African Americans.


Backed by the Federal Housing Administration (FHA), HOLC was able to service roughly one million homes from its inception in 1933 until 1936. In 1935, the FHA launched a program that would assess the racial makeup of the country’s largest cities — including Kalamazoo, Detroit, Battle Creek and Pontiac– according to their loan information. This allowed the HOLC to create what was once known as ‘residential security maps.’ A shading system, neighborhoods were graded with a combination grade and color scale. Communities with a heavy concentration of Blacks received a ‘Grade D’ ranking and were effectively colored red. These maps helped to create early segregation in the mortgage industry as lenders used these maps to determine loan status.


“If you drive around and look at our neighborhoods, you can see blatant redlining. Things have gotten better, but you have to understand the history of redlining. If they drew red though this map, it meant hazardous. If Black folks lived there or minorities or had lower income, they would automatically tag it as hazardous. Those are still prevalent issues that we deal with today,” Anthony Kellum, President of Kellum Mortgage


In 1936, the Underwriting Manual for the FHA gave instruction for how home loans should be distributed. The manual outlined racial provisions in light of the new burst of homeowners. Saying in part “incompatible racial groups should not be permitted to live in the same communities,” the manual provided a blueprint on how to keep the races separated in housing and education and was used until it was challenged.


The enactment of the Fair Housing Act of 1968 outlawed housing discrimination based on

race, sex, national origin and religion, however, housing practices had already been established and lenders and borrowers were still caught in the crosshairs. Now, 53 years later, even though redlining has been outlawed, African Americans are still suffering the blows of racism in the housing market.


“I just closed on a loan for a lady that’s 79-years-old. I can’t say that that is something that would have been able to happen in the past,” says Kellum.


Detroit is home to a larger percentage of renters than owners. In 2019, roughly 30 percent of the homes in Detroit were rented compared to 36 percent for the national average. Organizations like the Fair Housing Center of Metropolitan Detroit are in place to ensure cases of discrimination could be reported and recorded.


“As to our records, the Fair Housing Center of Metropolitan Detroit, during the April 1, 2018, through April 1, 2021, period, received 219 reports of housing discrimination from Detroit residents. Approximately 78 percent of the complaints were received from tenants,” says Steve Tomkowiak, executive director for the Fair Housing Center of Metropolitan Detroit. “As to the types of discrimination complaints, approximately 45 percent of the complaints involved claims of disability discrimination; 30 percent of our housing discrimination complaints involved claims of race discrimination; about a third of the race discrimination complaints involved challenges to criminal record requirements.”


Black buyers who have been able to purchase a home and looking to sell are hit with another aspect of housing discrimination. Appraisals for Black homes rank the lowest for Detroiters when compared to surrounding cities. A 2021 report from Zillow shows disparaging numbers for Detroit. Ranked using their own system, Zillow Home Value Index, Black-owned homes in Detroit sell for an average of $106,413 dollars compared to $195,270 dollars for homes in the surrounding counties of Oakland, Macomb, Washtenaw, Livingston and St. Clair.


“I think the appraisal is a key utensil that is used to limit the value of houses in certain neighborhoods. If you look at houses in certain neighborhoods of Detroit, they’re brick beautiful homes and line them up with houses from Ferndale that are vinyl and they’re appraised for about the same,” says Kellum.


To help combat the issue in Michigan, the U.S. Department of Housing and Urban Development awarded the state $2.2 million to fight housing discrimination. The Fair Housing Center of Metropolitan Detroit will receive $375,000 to aid in its services for Wayne, Oakland and Macomb counties.


“To date, the Fair Housing Center has received over 8,000 complaints of fair housing violations. After investigating, the Center assisted in and initiated approximately 500 litigations, recovering over $11 million to remedy fair housing violations. An estimated $1.5 to $2 million has also been recovered by victims in non-disclosed settlements. The Center also helped thousands of others obtain the housing of their choice without the necessity of litigation,” says Tomkowiak.


Redlining still has its holds around the housing industry. Manifested in credit applications and other aspects of the lending process, African Americans are consistently kept behind. However, continually displaying their resilience as a race and city, Black Detroiters push on.



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