Regional Heterogeneity and the Uneven Distribution of Advantage in Historical Federal Mortgage Insurance Outcomes

Keywords: historical redlining, housing discrimination, bayesian methods, regional economic development
Session Type: Virtual Paper Abstract
Day: Saturday
Session Start / End Time: 2/26/2022 02:00 PM (Eastern Time (US & Canada)) - 2/26/2022 03:20 PM (Eastern Time (US & Canada))
Room: Virtual 39

Abstract

This paper studies the regional variation in outcomes of federal home mortgage insurance grading to simultaneously highlight the motivations driving the agency’s guarantees and the contingent socioeconomic conditions that mediated these outcomes. The prevailing redlining narrative is of the systematic – and by implication, homogenous – harmful effect on racial and ethnic minorities, especially the Black population, and neighborhoods excluded from Federal Housing Administration-insured credit availability and its myriad wealth-creation benefits. However, this narrative belies the heterogeneity of the FHA’s housing outcomes due to differences in the scale of new construction, the documented variation of FHA discriminatory insurance patterns across different states for both homebuyers and builders, and pre-existing discriminatory housing practices such as racially explicit zoning, all of which may have influenced the effects of neighborhood trajectories through home mortgage guarantees. Taking an approach of the “Whiteness framework” (Goetz et al., 2020) that analyzes the structural dominance of the “white racial frame” (Feagin, 2020), I aim to re-orient redlining research to understand how racially unjust urban development is a two-sided system: Not only does it produce disadvantage for urban minorities, but under-studied is how these same systems have perpetuated and generated advantage for mostly White neighborhoods within the city. Using a Bayesian hierarchical model that considers the multi-scalar nature of policy implementation, I find that peripheral urban neighborhoods in Sunbelt cities experienced more consistent housing advantages from redlining.