Trying to Erase the Red Line: National Lessons from a New York Homeowner Policy

February 16, 2022

Most household wealth (particularly for low- and middle-income Americans) is held in home equity. Federal policies during the early 20th century helped open new avenues to homeownership for middle-class Americans—but these policies were explicitly racially exclusionary, employing a system of “redlining” to delineate the desirability of neighborhoods based on their racial makeup. Though the overtly racist policy of redlining officially ended with the Fair Housing Act of 1968, real estate segregation has persisted and continues today. 

In Trying to Erase the Red Line: National Lessons from a New York Homeowner Policy, authors Naomi Zewde, Raz Edwards, and Erinn Bacchus examine the legacy of discrimination in housing and offer lessons for designing housing policy that is intentionally anti-racist and redresses past harm.

The authors highlight three key lessons for anti-racist home financing policies moving forward: 

  • Programs intended to expand homeownership cannot expect buyers to already have large financial assets—a practice that excludes Black households;
  • Policies should consider the limited ability of low- and middle- income households to pay for repairs and improvements to their homes, and financing schemes for both initial purchase and physical home improvements should be tailored to family budgets; and
  • Housing in most US cities needs to be improved to address and adapt to climate change, requiring subsidies and other publicly funded strategies.