Residential Security, Risk, and Race: The Home Owners' Loan Corporation and Mortgage Access in Two Cities

Abstract

The Residential Security Maps produced under the aegis of the Home Owners' Loan Corporation (HOLC) are often regarded as significant evidence that the federal government was complicit in expanding segregated housing patterns. This paper suggests a different direction for the analysis of the agency's role and the impact of their maps regarding patterns of real estate appraisal and mortgage credit allocations. It is argued that: (1) whereas the broadly asserted relationship between race and residential security areas can be demonstrated, there are important variations that should drive further research in this sphere, including the significance of other demographic, socioeconomic, and housing variables; (2) despite uniform guidelines, the appraisal surveys and assignments of grades by HOLC were not identical across cities; (3) the approaches utilized by HOLC were not identical to those implemented by the Federal Housing Administration (FHA), making it unlikely these agencies had a cooperative relationship; and (4) the relationship between grades and the distribution of mortgages varied by lender type and between Philadelphia and Pittsburgh, suggesting the importance of local context in examining HOLC as a public policy instrument and its subsequent impact on racial segregation.