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Redlining Revisited: Mortgage Lending Patterns in Sacramento 1930–2004

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  • JESUS HERNANDEZ

Abstract

Despite decades of government reform, the American housing credit system continues to mirror long‐standing patterns of racial segregation and inequality. Consistent with this trend, the current housing crisis reveals an unusually high concentration of subprime mortgage activity and property foreclosures in non‐white residential settlements across the nation. Given the generally accepted premise of market neutrality, this case study of lending patterns in Sacramento, California, questions why US housing market exchanges continue to produce racially disparate outcomes and seeks to identify the ideological practices in which race is deployed, informs state and private economic action and shapes contemporary credit market practices. Résumé Malgré des décennies de réformes gouvernementales, le système de crédit immobilier américain reflète toujours les anciens schémas de ségrégation raciale et d’inégalité. Conforme à cette logique, la crise du logement actuelle révèle une concentration étonnamment élevée de prêts hypothécaires à risque (subprime) et de saisies immobilières dans les quartiers résidentiels non‐blancs du pays. Considérant l’hypothèse communément admise de la neutralité du marché, cette étude de cas sur les schémas de prêts à Sacramento (Californie) analyse les raisons pour lesquelles les transactions immobilières continuent à produire des résultats distinctifs au plan racial; elle identifie également les pratiques idéologiques dans lesquelles la race intervient, guide l’action économique de l’État et du secteur privé, et façonne les pratiques contemporaines sur le marché du crédit.

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  • Jesus Hernandez, 2009. "Redlining Revisited: Mortgage Lending Patterns in Sacramento 1930–2004," International Journal of Urban and Regional Research, Wiley Blackwell, vol. 33(2), pages 291-313, June.
    • Handle: RePEc:bla:ijurrs:v:33:y:2009:i:2:p:291-313
    DOI: 10.1111/j.1468-2427.2009.00873.x
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    1. Kristopher Gerardi & Adam Hale Shapiro & Paul S. Willen, 2007. "Subprime outcomes: risky mortgages, homeownership experiences, and foreclosures," Working Papers 07-15, Federal Reserve Bank of Boston.
    2. Kevin Fox Gotham, 2009. "Creating Liquidity out of Spatial Fixity: The Secondary Circuit of Capital and the Subprime Mortgage Crisis," International Journal of Urban and Regional Research, Wiley Blackwell, vol. 33(2), pages 355-371, June.
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    5. Elvin Wyly & Markus Moos & Daniel Hammel & Emanuel Kabahizi, 2009. "Cartographies of Race and Class: Mapping the Class‐Monopoly Rents of American Subprime Mortgage Capital," International Journal of Urban and Regional Research, Wiley Blackwell, vol. 33(2), pages 332-354, June.
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    Cited by:

    1. Scott Markley, 2024. "Federal ‘redlining’ maps: A critical reappraisal," Urban Studies, Urban Studies Journal Limited, vol. 61(2), pages 195-213, February.
    2. Thomas Wainwright, 2009. "Laying the Foundations for a Crisis: Mapping the Historico‐Geographical Construction of Residential Mortgage Backed Securitization in the UK," International Journal of Urban and Regional Research, Wiley Blackwell, vol. 33(2), pages 372-388, June.
    3. Saskia Sassen, 2009. "Cities Today: A New Frontier for Major Developments," The ANNALS of the American Academy of Political and Social Science, , vol. 626(1), pages 53-71, November.
    4. Manuel B. Aalbers, 2009. "The Globalization and Europeanization of Mortgage Markets," International Journal of Urban and Regional Research, Wiley Blackwell, vol. 33(2), pages 389-410, June.
    5. Raoul S. Liévanos, 2019. "Racialized Structural Vulnerability: Neighborhood Racial Composition, Concentrated Disadvantage, and Fine Particulate Matter in California," IJERPH, MDPI, vol. 16(17), pages 1-24, September.
    6. Scott N. Markley & Taylor J. Hafley & Coleman A. Allums & Steven R. Holloway & Hee Cheol Chung, 2020. "The Limits of Homeownership: Racial Capitalism, Black Wealth, and the Appreciation Gap in Atlanta," International Journal of Urban and Regional Research, Wiley Blackwell, vol. 44(2), pages 310-328, March.
    7. Siân Butcher, 2020. "Appropriating rent from greenfield affordable housing: developer practices in Johannesburg," Environment and Planning A, , vol. 52(2), pages 337-361, March.
    8. Gary A. Dymski, 2009. "Afterword: Mortgage Markets and the Urban Problematic in the Global Transition," International Journal of Urban and Regional Research, Wiley Blackwell, vol. 33(2), pages 427-442, June.
    9. Sumei Zhang, 2019. "Rethinking U.S. enterprise zones: The role of research design in program evaluation," Local Economy, London South Bank University, vol. 34(6), pages 545-571, September.
    10. Dongying Li & Galen D Newman & Bev Wilson & Yue Zhang & Robert D Brown, 2022. "Modeling the relationships between historical redlining, urban heat, and heat-related emergency department visits: An examination of 11 Texas cities," Environment and Planning B, , vol. 49(3), pages 933-952, March.
    11. Manuel B. Aalbers, 2009. "The Sociology and Geography of Mortgage Markets: Reflections on the Financial Crisis," International Journal of Urban and Regional Research, Wiley Blackwell, vol. 33(2), pages 281-290, June.
    12. Gary A. Dymski & Jesus Hernandez & Lisa Mohanty, 2011. "Race, Power, and the Subprime/Foreclosure Crisis: A Mesoanalysis," Economics Working Paper Archive wp_669, Levy Economics Institute.
    13. Jonathan K. London & Bethany B. Cutts & Kirsten Schwarz & Li Schmidt & Mary L. Cadenasso, 2021. "Unearthing the entangled roots of urban agriculture," Agriculture and Human Values, Springer;The Agriculture, Food, & Human Values Society (AFHVS), vol. 38(1), pages 205-220, February.
    14. Gary Dymski & Jesus Hernandez & Lisa Mohanty, 2013. "Race, Gender, Power, and the US Subprime Mortgage and Foreclosure Crisis: A Meso Analysis," Feminist Economics, Taylor & Francis Journals, vol. 19(3), pages 124-151, July.
    15. Lara J. Cushing & Shiwen Li & Benjamin B. Steiger & Joan A. Casey, 2023. "Historical red-lining is associated with fossil fuel power plant siting and present-day inequalities in air pollutant emissions," Nature Energy, Nature, vol. 8(1), pages 52-61, January.
    16. Alan Walks, 2014. "From Financialization to Sociospatial Polarization of the City? Evidence from Canada," Economic Geography, Clark University, vol. 90(1), pages 33-66, January.
    17. Joseph Gibbons, 2023. "Examining the long-term influence of New Deal era redlining on contemporary gentrification," Urban Studies, Urban Studies Journal Limited, vol. 60(14), pages 2816-2834, November.
    18. Elvin Wyly & Markus Moos & Daniel Hammel & Emanuel Kabahizi, 2009. "Cartographies of Race and Class: Mapping the Class‐Monopoly Rents of American Subprime Mortgage Capital," International Journal of Urban and Regional Research, Wiley Blackwell, vol. 33(2), pages 332-354, June.
    19. Fred Block, 2015. "A Neo-Polanyian Theory of Economic Crises," American Journal of Economics and Sociology, Wiley Blackwell, vol. 74(2), pages 361-378, March.
    20. Saskia Sassen, 2009. "When Local Housing Becomes an Electronic Instrument: The Global Circulation of Mortgages — A Research Note," International Journal of Urban and Regional Research, Wiley Blackwell, vol. 33(2), pages 411-426, June.
    21. Lei Zhang & Tammy Leonard, 2021. "External validity of hedonic price estimates: Heterogeneity in the price discount associated with having Black and Hispanic neighbors," Journal of Regional Science, Wiley Blackwell, vol. 61(1), pages 62-85, January.
    22. Krimmel, Jacob, 2018. "Persistence of Prejudice: Estimating the Long Term Effects of Redlining," SocArXiv jdmq9, Center for Open Science.

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