Contemporary Echoes of Segregationist Policy: Spatial Marking and the Persistence of Inequality

The Home Owners’ Loan Corporation (HOLC), established in the US during the Great Depression to provide relief to a failing housing market, had a lasting effect through institutionalising the segregationist practice of denying mortgages to communities of colour. Over subsequent decades, ‘redlining’ funnelled billions of US dollars away from minority neighbourhoods and shaped segregation patterns – constituting perhaps the most influential example of institutional intervention in the hierarchy of places. This history of racialised exclusion via the process of ‘spatial marking’ is reflected in contemporary housing inequality, which remains one of the most severe sites of racial stratification. This article combines newly-digitised archival data with data describing recent mortgage outcomes to investigate the role of institutional classification of place in the persistence of housing finance inequality. I show that borrowers in the 21st century were at a severe disadvantage when pursuing mortgages in neighbourhoods redlined by HOLC appraisers in the early 20th century. Such applicants were more likely to be denied loans and to receive subprime loans net of measures of selection and ecological disadvantage. This article shows that the geographical patterns of exclusion and exploitation are remarkably stable, and highlights the role of persistent institutional marginalisation in replicating racial and spatial inequalities.