If you’ve ever wondered why certain neighborhoods look the way they do—or why homeownership feels out of reach for so many—the answer lies in history. Policies like redlining and racial covenants didn’t just shape cities decades ago; they’re still influencing who gets to build wealth through real estate today.
In this post, we’ll break down:
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What redlining and racial covenants really were
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How these policies created lasting wealth gaps
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Why your home’s value might still be affected by them
The Roots of Housing Inequality
Let’s start with redlining. Back in the 1930s, the U.S. government literally drew color-coded maps to decide which neighborhoods were “safe” for mortgages. Green areas (white, affluent neighborhoods) got loans easily. Red areas (Black, Latino, or low-income communities) were labeled “high risk” and denied financing.
But it wasn’t just maps. Racial covenants—clauses in property deeds banning sales to non-white buyers—locked entire neighborhoods into segregation. Even after these practices were outlawed in 1968, their effects stuck around.
Key takeaway: The neighborhoods we live in today weren’t accidental. They were designed to keep wealth in white hands.
Why This Still Matters Now
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Wealth Inequality
Homes in white neighborhoods were (and still are) valued higher, creating a snowball effect. White families built equity, passed it down, and reinvested. Meanwhile, families of color were stuck in areas where their homes didn’t appreciate the same way.Today, the average white family has 10 times more wealth than the average Black family—and housing policies are a huge reason why.
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Appraisal Bias
Research shows homes in majority-Black neighborhoods are appraised for less than identical homes in white areas. Even if you pour money into renovations, your home’s value might still be capped by outdated biases. -
The Affordability Crisis
When homes in white neighborhoods are hyper-valued, it pushes prices up everywhere. Now, even middle-income families struggle to afford housing, while the cycle of inequality continues.
What Could Fix This?
There’s no magic wand, but here are a few ideas:
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Reform Appraisals: Decouple home value from neighborhood demographics (check out Dr. Junia Howell’s work with ERUKA for examples).
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Wealth-Building Alternatives: Since homeownership isn’t accessible to everyone, we need policies that create other paths to financial stability.
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Acknowledge the Past: Understanding this history helps us fight for fairer policies today.
Watch the Full Discussion
Want to hear the full breakdown? Watch the conversation here:
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