A new report shows how government-sanctioned redlining, a practice dating back 80 years, continues to harm poor, minority communities. 

“Maps of Inequality: From Redlining to Urban Decay and the Black Exodus” was released July 19 by the office of Cook County Treasurer Maria Pappas. 

“Redlining is the practice of denying loans to homebuyers in minority areas by deeming them a financial risk,” the study explains. “The term referred to the red shading on maps of urban areas where the federal government, working with lenders, discouraged issuing mortgages.” 

The places in red, were heavily populated by Blacks and other ethnic groups. The study recreates the 1940 Home Owners’ Loan Corporation “security map” for Chicago that shows where those redlined areas were located. 

The Pappas study shows that nearly 60 percent of properties sold in the 2022 Scavenger Sale — mostly “vacant lots, abandoned homes and boarded-up businesses” that have accumulated delinquent property taxes — were redlined. 

Meanwhile, 40 percent of properties were yellow-lined, “meaning they were at risk of being redlined.” Only 3 percent of 2022 Scavenger Sale properties are located in areas that, in 1940, would have been deemed “Best or Still Desirable” by the Home Owners’ Loan Corporation. 

The Pappas study also shows that the same Cook County suburbs where property taxes are highest, property values are lowest, and Scavenger Sale properties are most heavily concentrated, are also where property owners are most likely overpaying for property taxes by not taking advantage of various exemptions, which might prevent properties from going into delinquency. 

For instance, from 2020 to 2022, property owners in Bellwood, Broadview and Maywood received 2,100, 981 and 1,704 refunds, respectively. Those refunds totaled $4.5 million, $2.6 million and $3.9 million, respectively. 

Pappas recommends returning deteriorating properties to productive use by creating a “public database of abandoned properties; replacing the Scavenger Sale with a program allowing developers and local governments to receive properties free of financial encumbrances and rehab them more quickly; and advancing legislation to lower the interest rate applied by the county to delinquent property tax payments from 18% per year to 9% per year, lessening the burden on homeowners trying to repay their delinquent taxes to save their homes.”

You can read the full Pappas study at cookcountytreasurer.com

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