Redlining' — banks' refusal to make mortgage loans in certain areas — still has a huge effect on housing values even though the practice was banned 50 years ago. According to Zillow, a Tampa Bay house in a once-redlined area is worth less than half the amount of houses in non-redlined areas — $219,991 versus $482,141.
Redlining began after the Great Depression when areas were assessed as to the credit risks for mortgage lenders. The worst designation was "hazardous," which often coincided with the racial makeup of the area's residents. These areas were colored in red on maps.
"The lasting impact of redlining is a striking example of how the kind of discrimination — financial and racial — codified nearly a century ago continues to affect homeowners and whole communities today," said Svenja Gudell, Zillow's chief economist.
Nationwide, homes in once-redlined areas are now worth 85 percent of the value of the surrounding homes. In some places, though, homes in formerly redlined areas are more valuable than the rest of the homes in that area. In Boston, the typical home value in a historically redlined area is $847,992, about $95,000 higher than nearby homes.