Page 23


Lela Abernathy Redlining in Texas Dallas Contrary to myth, the prosperous Texan does not get rich by striking oil in the backyard or through successful business dealings. Instead, what wealth most people know comes through the ownership of real property. To past generations this meant buying a farm and passing it on from generation to generation. Now that most Texans live in cities, they do the same thing with the family home. They buy it on credit and gradually pay if off. This accumulation of wealth is a slow, life-long affair. Few Texans but, the born rich could ever buy a house if it weren’t for longterm mortgage financing. So, if a family can’t get a mortgage loan, it has been effectively denied the chance to build any degree of economic independence. A large and growing body of evidence suggests this is exactly what has happened to many Texans living in the state’s inner cities. In Dallas, Fort Worth, San Antonio, and the Galveston-Texas City area, mounting audit data shows that banks and savings and loan companies have all but cut off the flow of mortgage credit to moderate-income, primarily minority neighborhoods. The systematic refusal to make mortgage loans in certain geographical areas is called redlining, a term borrowed from the bygone banking and s & 1 practice of outlining in red those areas on a city map where financial institutions won’t lend. In Dallas, where the evidence of redlining is coming together faster than anywhere else in Texas, perhaps half the city is redlined. Pleasant Grove, Oak Lawn, East Dallas, West Dallas, Southeast Oak Cliff, and South Dallas combined have 43 percent of the city’s population but these predominantly lowand 8 The Texas Observer Lyke Thompson middle-income neighborhoods receive only three percent of the home purchase and improvement loans made in Dallas. Put another way, banks are lending only about $26.90 per person in these inner-city neighborhoods, compared to as much as $785 in areas like Highland Park, University Park; and North Dallas. A study directed by the Institute of Urban Studies at UT-Arlington has turned up similar data on lending practices in Fort Worth, where approximately 12 percent of home loans are going to the inner city and 75 percent to mortgagees in affluent outlying neighborhoods. The study brought the cities of Dallas and Fort Worth together with several community organizations and The Dallas Morning News in an attempt to analyze data on home loans collected by the cities, the News, and the Texas Association of Community Organizations for ReBanks and s & l’s all over the nation have been forced to make loan data public under provisions of a new federal law, the Home Mortgage Disclosure Act of 1975. But as soon as they release figures, many banks downplay their significance. The pattern of lending in Dallas is merely an indication that residents can’t afford or don’t want home loans, banks say. Indeed, the incomes of prospective loan applicants in the inner city are low, but then so are the market values of the houses they want to buy. Preliminary analysis indicates that even though incomes may be low in redlined neighbor hoods, residents still earn enough to handle mortgages on what are comparatively inexpensive dwellings. Banks and finance institutions reply that inner-city residents don’t seek loans. If they don’t, it is not because they don’t want loans. Information developed by the city of Dallas shows that inner-city residents frequently have as much if not more desire to own a house as do people in more well-to-do areas of the city. So, if redlining victims often have the means and the will to get housing loans, why can’t they? The bank study’s findings show race to be the predominant factor in redlining. Data from 56 banks and savings and loan companies demonstrates that white neighborhoods in the study period received at least 50 percentand as much as 1,200 percentmore home loans than black neighborhoods of approximately equal income level and home value. When the predominantly black East Oak Cliff neighborhood of Lisbon was compared to the white West Oak Cliff neighborhood of Jefferson, the analysis \(loan volume was matched with Zip $2,847,000 in Jefferson and $712,000 in Lisbon, where the median income level is slightly higher and the population Several studies show bank discrimination in lending patterns, leaving many black and brown Texans with no way to get a home loan