HOLC color-coded neighborhoods within the United States, grading them into four âqualityâ or âsecurityâ categories: âAâ (green), âBâ (blue), âCâ (yellow), and âDâ (red). âAâ received the highest rating and âDâ received the lowest rating, also known as being âredlined.â These categories corresponded to a neighborhoodâs level of âinvasionâ or âinfiltrationâ by an âundesirable population,â or, in other words, by persons of color.
To obtain a government rating of âA,â a neighborhood had to beâhomogeneousâ and consist of âAmerican business and professional men,â where âAmericanâ presumably meant white and often, U.S.-born. âBâ-rated areas had âreached their peakâ, but were âstill desirableâ and could be âexpected to remain stableâ. âCâ-rated areas were described as âdefinitely declining.â Finally, âDâ or âredâ neighborhoods were described as âundesirable populationsâ that, having declined, were insecure, volatile, dangerous, hazardous, and unstable. âDâ-rated or redlined communities were flagged as unsuitable for federal loans and subsidies. These redlined neighborhoods were predominantly black. For instance, in Detroit, every neighborhood with a black-American population, however small, was rated âDâ or âhazardous.â
Race was an important driver of the HOLCâs ratings. âNotions of racial and ethnic worth . . . on an unprecedented scaleâ informed the HOLCâs neighborhood ratings.46 Racial and ethnic groups were ranked in order of the most desirable to the least desirable, with the least desirable rankings having the most adverse effect on property values.47 Racial and ethnic groups were ranked in the following way:
(1) English, Germans, Scotch, Irish, Scandinavians (2) North Italians (3) Bohemians or Czechs (4) Poles (5) Lithuanians (6) Greeks (7) Russians, Jews (lower class) (8) South Italians (9) Negroes; and (10) Mexicans.
Stability, security, safety, and property value were thus attributed to âwhiteâ-American communities, whereas black neighborhoodsâor even neighborhoods with only a handful of black occupants âwere defined as hazardous homes and hazardous investment. In this way, race and the worth that the federal government attributed to a neighborhoodâs racial composition principally drove the HOLCâs ratings.
The government determined the value of a dwelling based on racial composition, alleged worth, and âinfiltrationâ of a neighborhood, where infiltration reflected racial diversity or the increase in persons of color within a neighborhood. Race was more important than the propertyâs structural characteristics, the communityâs economic class, or foreseeable mortgage default rates. In St. Louis, for example, a community known as Lincoln Terrace was originally intended for middle class white families. The neighborhood developed into a black neighborhood, but, despite the fact that the homes were relatively new and of good quality, the HOLC gave the area a âDâ rating in 1937 and 1940, asserting that the houses had âlittle or no value today, having suffered a tremendous decline in value due to the colored elements now controlling the district.â In Detroit, although the black West Side housed wealthy black-Americans and expensive homes, the neighborhood was rated âDâ or âredâ by the HOLC. Moreover, data indicates that default rates on loans were actually lower in lower-grade, minority homes, indicating that the governmentâs classification of minority neighborhoods as financially volatile was subjective, inaccurate, and discriminatory.