>> the Home Owners Loan Corporation drew maps grading areas from "desirable" to "hazardous" --- the "hazardous" neighborhoods were demarcated with a red line, hence the name. Lenders refused financial services to any family in the redlined neighborhood.
The HOLC did not use the redlined maps to deny loans. For one thing, they couldn't have, the HOLC was a temporary program intended to deal with the Great Depression and the maps weren't completed until the HOLC had made 90% of the loans it ever made. And second, it did make loans in the redlined areas, and it made a higher percentage of loans to black borrowers than other lenders.
The HOLC did share the maps with the explicitly racist FHA, but the FHA didn't use the maps to deny loans. It couldn't have, the FHA insured loans, it didn't make them. It also focused on financing new construction, the redlined areas were already built up. And when it did refuse to finance black borrowers, it appears to have used block by block census data, not the HOLC maps. Outside of the FHA, it doesn't appear that the HOLC shared their maps with private lenders.
If you're using the HOLC maps to measure the effect of something, you're measuring something other than the effect of lending decisions. If the HOLC map of Chicago is a map of Chicago violent crime that is correlation rather than causation. There must be other factors that explain the correlation.
