Forty years ago, Congress passed the Community Reinvestment Act, which required banks to lend to qualified borrowers in blighted neighborhoods. The act aimed to eliminate government-sponsored housing discrimination, known as redlining. But it is full of loopholes: It doesn’t apply to mortgage brokers or cover internet banking, and it allows banks to claim credit for loaning almost exclusively to white applicants moving into historically black neighborhoods – supposedly lifting up low-income areas, but also enabling gentrification.
Today, a new epidemic of modern-day redlining has crept quietly across America. The gap in homeownership between African Americans and whites is now wider than it was during the Jim Crow era.
Ahead of this week’s episode, our reporters analyzed 31 million government mortgage records and determined that people of color were more likely than whites to be denied a conventional home loan in 61 metro areas, including Atlanta, Detroit and Washington. That’s after controlling for a variety of factors, including applicants’ income, loan amount and neighborhood.
No city better exemplifies the trend than Philadelphia, where so-called up-and-coming neighborhoods abound – and where African American applicants were nearly three times as likely as whites to be denied a home loan. That’s where reporters Aaron Glantz and Emmanuel Martinez tell the story of two loan applicants – one black, one white – whose experiences raise larger questions about who gets to buy a home, and who doesn’t, in America.