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Redlining and the Home Owners' Loan Corporation Author: Amy Hillier Dissertation School: University of Pennsylvania Pages: 140 Publication Date: July 2001 Availability: Access Number: 10735 Abstract: The Home Owners’ Loan Corporation, created in 1933 to help urban homeowners avoid foreclosure, developed a series of residential security maps for cities across the country. These maps deemed areas with African Americans and other perceived threats to real estate values "hazardous" and colored them red. Historian Kenneth Jackson rediscovered the maps in the late 1970s and linked them to institutionalized redlining in his seminal work, Crabgrass Frontier. Subsequent research has consistently cited the impact of these maps on lending and urban disinvestment, but it has not provided specific evidence that the maps actually had an impact or that their impact was independent of local lending patterns that predated HOLC. Using a combination of social science and historical methods, this dissertation will test whether the residential security map created for Philadelphia impacted the number, location, terms, and type of lender of mortgages made between 1939 and 1950. Geographic Information Systems (GIS) technology will be used to reconstruct the HOLC map for Philadelphia and to analyze address-level data relating to mortgages in the period after the HOLC map was created. Spatial lag and multinomial probit models will be used to determine whether the maps had an independent and significant negative effect on mortgage lending. In addition to the HOLC map for Philadelphia and address-level mortgage records, this study will utilize primary sources including the area descriptions written by HOLC field agents, interviews with the local realtors and lenders who served as map consultants to HOLC in Philadelphia, HOLC reports to Congress, records of the Federal Home Loan Bank Board, appraisal journals, and local newspapers. Census tract-level data from the 1934 Works Progress Administration Real Property Survey will also be used. An understanding of HOLC’s possible role in redlining is relevant to contemporary fair housing policies and research as well as to the larger issue of inner-city development. Scholars consistently cite historical and contemporary redlining as an explanation for urban disinvestment and decline. By clarifying HOLC’s role in redlining, this research will provide much-needed empirical evidence about how whole sections of cities like Philadelphia have been abandoned. By conceptualizing redlining as a process that can impact the terms of mortgages and not just the volume of loans, it also has the potential to connect lending practices from the 1940s to current discussions of predatory lending and risk-based pricing. This study will make methodological contributions, as well. By using address-level geographic data in combination with more rigorous spatial statistical methods than previously used, it will expand the set of applied research tools available to provide direction for housing policy alternatives. |
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