The Home Owner's Loan Corporation

Red was the color used to indicated these "Fourth Grade" areas on the map and, thus, a new term came into our vocabulary:  "redlining."

Birth of the Modern Mortgage

In the early 1930's, at the height of the depression, lending institutions were extremely reluctant to make loans for housing.  Mortgage terms were so steep few could afford them anyway. The typical home loan in 1930 required a 50% down payment and had to be paid off within 5 - 7 years at an interest rate of 6 to 8 percent.  Buyers paid the entire interest charge at the end of the payback period in a single balloon payment.  Often they had to take out a second mortgage, at rates of up to 18%, just to cover this final payment.

In 1934 President Roosevelt established the Federal Housing Administration. The goals of this agency were to encourage the building of new homes and, in the process, create jobs for thousands of unemployed construction workers and craftspeople.  The FHA guaranteed mortgage program made possible, for the first time, the types of mortgage terms we take for granted today:  only 10% down, up to 30 years to pay back the loan, and an interest rate of 5.5 percent.

In 1944 the G.I. Bill made housing even more affordable for 16 million returning veterans. It too provided guaranteed loans, but with 0% down.

Minority Report

Of course, the government couldn't make these generous terms available for all properties.  Banks handling federally guaranteed loans needed clear guidelines indicating where loans could safely be made, and where they could not.  A massive inventory was initiated, starting in 1936, to evaluate all residential areas in the nation.  The agency created to accomplish this enormous project was the Home Owner's Loan Corporation, or HOLC.

The HOLC set strict standards.  First, the appraisers (real estate personnel, mostly) looked for any signs of decay or neglect that might indicate a neighborhood was in decline.  Surveyors also looked for any sign of minorities.  This included not only African Americans but also Jews and "foreign born whites" such as Poles and Italians.  Even a single home occupied by a minority family in a distant corner of a neighborhood could cause the entire area to be downgraded for mortgage insurance.

In only one year this project produced a collection of "residential security" maps covering every town and city in the country -- several hundred maps in all.  These maps were highly confidential; only federal officials and senior bank personnel were allowed to see them -- or even know they existed.

Failing Grades

Residential areas on these maps were graded on a scale from "A" to "D" with each ranking denoted by a particular color.

A   The "A" or "First Grade" areas were colored green and had the federal government's full blessing.  These were usually new or recently built neighborhoods on the edge of town that were virtually free of African Americans or "foreign-born whites."  Lenders were encouraged to offer the maximum amount available in the "A" areas.

In Syracuse, the green neighborhoods were all well away from downtown, typically in areas that had been farm land only ten to twenty years earlier.  A notable exception was lower James Street which, although old and just outside downtown, still boasted some of the grandest residences in Syracuse.  "First Grade" developments in Syracuse included Bradford Hills, Berkeley Park, Sedgewick Farms, Strathmore and Dewitt.

B   The "Second Grade" or "B" areas were colored blue.  These were still good neighborhoods but beginning to fray around the edges.  Here mortgage lenders were advised to make loans at 10 to 15 percent below the maximum available amount.

C   "Third Grade" areas were colored yellow.  These were older neighborhoods with housing styles that might now be "out of fashion."  Often neighborhood covenants had expired.  And, of course, these areas were subject to "infiltration of a lower grade population."

In Syracuse, the Third Grade regions were either older neighborhoods in the central part of the city or older neighborhoods that had originally been separate towns or villages -- like Mattydale or Nedrow.  Once elegant West Onondaga Street was colored yellow in 1937 and a great expanse of yellow encased the South Salina corridor, beginning downtown and continuing south all the way to the city limits.

D   "D" neighborhoods were usually struggling for survival -- and the "Fourth Grade" designation guaranteed the struggle would be a losing one.  Characterized by "undesirable population or an infiltration of it," mortgage lenders would often refuse to make any loans on properties in these neighborhoods. 

Red was the color used to indicated these "Fourth Grade" areas on the map and, thus, a new term came into our vocabulary:  "redlining." In Syracuse, the "D" areas were the city's oldest neighborhoods and those closest to downtown.  Some sat next to factories or ran alongside railroad tracks.  Others, like the area just southeast of downtown, were apparently sentenced to death for their ethnic diversity.

It was the racist assumption of the era that when minorities moved into a "nice" neighborhood, property values for all would soon suffer.  The great irony is that prior to 1937 this supposition held only the power of myth; after 1937 it was mandated by law.

The Emptying of the City

With most of the nation's existing neighborhoods now zoned for decline, and new highways opening the way to the "green" pastures of the suburbs, the stage was set for the emptying of the cities.  Because Syracuse was rich in multiethnic neighborhoods, it experienced more urban exodus than cities that were less diverse.

Today we find that many of 1937's "First Grade" neighborhoods have now, themselves, fallen a grade or two.  Home buyers have migrated to even newer suburbs, further yet from downtown.  As each new layer of housing is added at the city's periphery, yesterday's new developments enter the process of decline.  The edges of the city grow ever wider, the decay at the center grows ever deeper.

Maps Rediscovered

Several years ago Emanuel Carter, associate professor of landscape architecture at SUNY Environmental Science and Forestry, obtained a copy of the 1937 HOLC redline map of Syracuse.  Take a look at it below.

  • "Roosevelt's 'Rainbow' Held no Pot of Gold"  Dick Case column in the Syracuse Herald American including an interview with Professor Carter and a discussion of redlining in Syracuse.
  • Area Description: Thornden Park.  "Area reports" were the raw material HOLC used to produce the "Security Maps."  This is the area report for the Thornden Park neighborhood.  Notice that "favorable influences" include clean streets, good schools, convenient shopping and good transportation.  "Detrimental influences" include an "influx of apartments near the University" (the HOLC thought apartments were negative, per se).  Under "foreign born" the appraiser has written "none," and "none" again to foreign born "infiltration."  There is no entry under "negro," presumably because there were none to report.
  • The 1937 Redline Map of Syracuse and vicinity.  Because this map is too large to easily download as a single file, it has been broken into four smaller maps here, each displaying one quadrant of the city (each file is about 200k).

    If you have a high speed connection you may want to view this higher resolution map of the entire city (about 3.5 megabyte)