Redlining and Intergenerational Wealth

McKay Cunningham

Latonia Haney Keith

Published November/December 2021

This April, HB 377 was signed into law. The new law aims to ban critical race theory in Idaho public schools.[1] President Trump had previously issued an executive order excluding from federal contracts any diversity training interpreted as containing “Divisive Concepts.”[2] Among the content considered “divisive” was critical race theory.

The debate, both nationally and in Idaho, reveals confusion about critical race theory, which generally provides that racism is a social construct ingrained in American life and laws. Critical race theory is not diversity training but “a practice of interrogating the role of race and racism in society.”[3]

As former law professors and current college educators, we agree with the American Bar Association’s Human Rights magazine, which characterizes the theory as “acknowledging that the legacy of slavery, segregation, and the imposition of second-class citizenship on Black Americans and other people of color continue to permeate the social fabric of this nation.”[4]

Examining the laws and policies of previous decades to identify and remediate racial discrimination is critical to our pluralistic society. Such an examination is not, as Idaho Code now states, “contrary to the unity of the nation and the well-being of the state of Idaho.”[5] We need to know more about our racial history, not less.

For example, many people, even many lawyers, do not know about redlining. Redlining was a discriminatory practice by which banks, insurance companies, and others refused loans and mortgages within specific geographic neighborhoods, based on the racial make-up of those neighborhoods.[6] Redlining was not a social construct—it was not white families choosing to flea to the suburbs or black families choosing to live together in the same neighborhood. Redlining was a distinct federal government policy that had a devastating effect on the ability for people of color to accrue intergenerational wealth.[7]

Redlining policy

In an attempt to stabilize the housing market following the Great Depression, the federal government promoted a relatively new tool aimed at increasing homeownership. The government would fully back the risk that banks incurred when issuing mortgages. Working class Americans didn’t have today’s equivalent of $350,000 stashed under a mattress to buy a home. Banks instead would front 90-100% of the home price because the loans were backed by the federal government.

As part of that effort, the government, first through the Home Owners’ Loan Corporation and then through the Federal Housing Administration, drew maps for over 200 cities to grade the riskiness of lending to neighborhoods. The maps were color-coded using an A to D scale. A was green and deemed “best.” B was blue and labeled “still desirable.”  C was yellow and marked “definitely declining.” And D was red and labeled “hazardous.” Neighborhoods with occupants from communities of color were marked in red — hence the term “redlining” — and considered high-risk for mortgage lenders.[8]

This approach was grounded in the work of two individuals.  The first is Frederick Babcock, who helped start the Federal Housing Administration and who, in his 1932 book The Valuation of Real Estate, proposed a segregationist housing valuation policy.[10]  The second is Homer Hoyt, the first chief housing economist for the Federal Housing Administration, whose 1933 dissertation perfected a system of ranking races and nationalities by order of “desirability” as a means of illustrating their impact on land values.[11]

Babcock and Hoyt are credited with establishing the first Underwriting Manual for the Federal Housing Administration in 1936. The Manual promoted racial segregation by recommending racially restrictive covenants to guarantee the most “favorable condition” for neighborhoods. The Manual stated that deed restrictions should include a “prohibition of the occupancy of properties except by the race for which they are intended,” and that “inharmonious racial groups” and “incompatible racial elements” would devalue a neighborhood.[12]

In New York City, for example, the Federal Housing Administration characterized areas rated D as: “There is a steady infiltration of negro, Spanish and Puerto Rican into the area,” and “colored infiltration is a definitely adverse influence on neighborhood desirability.”[13] Many of these redline maps also included further explanations: “Infiltration of: Negroes” is a common fill-in-the-blank item explaining why a region was deemed hazardous.[14] “Respectable people but homes are too near negro area,” reads a summary for a B-grade neighborhood in Richmond, Virginia.[15]

Mapping Inequality[16]

Put simply, from 1934 to 1968, the federal government made homeownership accessible to a subset of Caucasian people by guaranteeing their loans, but explicitly refused to back loans to people of color or white people who lived near people of color.  Notably, the government pursued this policy without any evidence supporting the notion that property values would decline if people of color bought homes in any given neighborhood.

Redlining in Idaho

The practice of drawing redline maps was not relegated to New York or Chicago or other big cities. It proliferated across the country, including Idaho. A new interactive map available to the public shows redlining across the entire United States.[17] Strangely, Idaho is blank.

We know that redlining occurred in Idaho, and yet there are no easily accessible copies of Idaho’s redlining maps. Local historian and Boise State University professor, Jill Gill, identifies the river district in Boise as previously redlined.[18] Indeed, Professor Gill notes that “the River Street neighborhood was zoned for noise and warehouse and industrial, whereas white neighborhoods were zoned to protect them more.”[19]

Outside anecdotal evidence of redlining in Boise, Pocatello, and other Idaho towns, very little data is publicly available. The maps division at the Idaho Historical Society contains no redlining maps, nor does the U.S. National Archive.

To fill this gap, the College of Idaho has launched a project to find and publish those maps. The project seeks to unearth redlining maps from Idaho’s past, integrating those maps into a platform that allows the public to see those neighborhoods that the federal government boxed out of the housing boom. The platform hopes to include overlaying data, including proximity to fresh food, parks, environmental hazards, medical facilities, food swamps, and more.

Redlining’s relevance

Perhaps the Idaho Legislature would disapprove of this project. Perhaps the Legislature would see the publication of Idaho’s redlining maps as “contrary to the unity of the nation.” After all, redlining was outlawed in 1968 with the enactment of the Fair Housing Act; arguably, it’s relevance today is minimal.

But redlining is not irrelevant today. Its effects are severe and ongoing. As noted previously, redlining had its heyday in the decades following World War Two—a golden era of the American economy. The ability of working-class families to attain middle-class wealth was spurred by federal government programs, like the provision of mortgages with little or no down payment.  With the federal government’s backing, homes were affordable, even for African-American and Latinx working class families.  But the government refused to back their loans.  As housing values shot up during this period, the home equity that white homeowners realized assured them intergenerational wealth—an opportunity denied to communities of color.[20]

It may seem like a small thing, but the connection between homeownership and wealth accumulation is critical. It is one of the few ways that any household, but particularly low or middle-income households, can accumulate wealth and pass that wealth to future generations. Today, the wealth gap that separates whites from communities of color reflects redlining’s continuing impact.  The net worth of a typical white family, $188,200, is nearly eight times greater than that of a black family at $24,100 and more than five times the wealth of a Latinx family at $36,100.[21]

Without access to government backed mortgages, people of color, as well as whites who lived among and near people of color, remained relegated to the rental market. Black, Latinx, and poor white households, for example, are predominately renters rather than homeowners.[22]  The Survey of Consumer Finances shows that the average homeowner has household wealth of $255,000, while the average renter has household wealth of $6,300.[23]

Redlining and Renting

The fragility of rental households will soon be tested. The U.S. Supreme Court recently struck down the federal eviction moratorium imposed by the Centers for Disease Control and extended by the Biden Administration.[24]  Millions of Americans currently face eviction.[25]  The COVID-based moratorium did not excuse unpaid rent; it only delayed it. Idaho tenants, as a result, owe their landlords all unpaid rent, fees, penalties, and/or interest during the period of the moratorium, which extended over 16 months.

To be clear, redlining is not the only cause of a fragile rental market. There is a well-documented housing shortage in Idaho; there are not enough homes for purchase or properties for rent. Simultaneously, Idaho has seen a sharp increase in migration of families with significantly more purchasing power.  “The budget for out-of-town home buyers moving to Boise is 50% higher than locals’.”[26]

In combination, these factors have generated a housing crisis in Idaho.[27] An extensive study of vulnerable Idahoans by the United Way reveals that although Idaho has experienced significant economic growth according to traditional metrics, a full 40% of Idahoans struggle with basic subsistence. “[I]n 2018, 40% of households still struggled to make ends meet. While 12% of these struggling households were living below the Federal Poverty Level (FPL), another 28% were ALICE: Asset Limited, Income Constrained, Employed.”[28]

A home is considered affordable when rent and utilities cost no more than 30% of a household’s income.[29] Statewide, the average rent for a modest two-bedroom home is $903 per month, which is affordable for those who earn $17.36 per hour.[30] But Idaho renters earn an average of $13.62 per hour,[31] and the minimum wage in Idaho is $7.25 an hour.

Of course, the income necessary to live in an affordable rental varies by Idaho county. In both Ada and Canyon counties, the “livable” income is $19.27 an hour, while the average renter wage is $15.67 and $12.11, respectively.[32] Rural counties such as Boise, Owyhee, Kootenai, and Blaine also require a household income above $18 an hour compared with average renter wages of $6.87, $12.32, $13.41 and $14.70, respectively.[33]


Housing disparities stem from several causes. Redlining is just one of them. Awareness of our former laws and policies unveils the causes of our current dilemmas and sometimes reveals avenues of redress. Mixed-use zoning, multi-unit housing, and limitations or even prohibitions on single-family residential zones can facilitate housing opportunities.  Similarly, intentional investment in communities that have historically been sidelined and promoting programs that bolster homeownership opportunities for low-income families alleviate the effects of past prejudices. 

Although the floor debate that lead to HB 377 reflected animosity toward a critical review of historic racist policies, the actual language of the law is more hopeful. In part, Idaho Code 33-138 provides that no public school shall direct students “that individuals should be adversely treated on the basis of their sex, race, ethnicity, religion, color, or national origin.”[34]

Redlining did precisely that.

Identifying the effects of redlining in Idaho and across the country is an important step toward understanding housing disparities and attempting to address them. As a 13-year-old organizer said in response to HB 377, “being taught the country’s complete history, the good and the bad, is not about ‘self-hatred.’ Rather, it’s an important step to being able to correct those wrongs.”[35]

“Make no mistake, this is self-awareness,” she said. “If we aren’t able to recognize our own flaws, we will never be able to progress beyond them.”[36]

McKay Cunningham teaches First Year Seminar and Constitutional Law at the College of Idaho in Caldwell, ID. He previously taught Constitutional Law and Property Law at both the University of Idaho College of Law and Concordia Law School. He lives in Boise with his wife and four children.

Latonia Haney Keith currently serves on the senior leadership team of the College of Idaho as Vice President of High Impact Practices. Through this role, Vice President Haney Keith is responsible for creating and implementing an innovative new program that blurs the lines between college and careers. After graduating from Harvard Law School, where she was a research assistant to Professor Laurence H. Tribe and Professor Charles Ogletree and an editor of and symposium co-chair for the Harvard Law Review, Vice President Haney Keith clerked for the Honorable Judith Ann Wilson Rogers on the U.S. Court of Appeals for the District of Colombia Circuit.


[1] Idaho Code § 33-138(2) (2021) (“The Idaho legislature finds that tenets outlined in . . . ‘critical race theory,’ . . . exacerbate and inflame divisions on the basis of sex, race, ethnicity, religion, color, national origin, or other criteria in ways contrary to the unity of the nation and the well-being of the state of Idaho and its citizens.”).

[2] Exec. Order No. 13,950, 85 Fed. Reg. 60,683 (Sept. 22, 2020), revoked by Exec. Order No. 13,985, 86 Fed. Reg. 7,009 (Jan. 20, 2021).

[3]  Janel George, A Lesson on Critical Race Theory, 46 Human Rights, no. 2, Jan. 11, 2021, available at

[4] Id.

[5] Idaho Code § 33-138(2) (2021).

[6] See generally Richard Rothstein, The Color of Law: A Forgotten History of How Our Government Segregated America (2017).

[7] See id.

[8] Facing Segregation: Housing Policy Solutions for a Stronger Society (Molly W. Metzger & Henry S. Webber eds., 2018).

[9] Downloads & Data, Mapping Inequality, (last visited Sept. 10, 2021).

[10] Frederick M. Babcock, The Valuation of Real Estate (1932).

[11] Homer Hoyt, One Hundred Years of Land Values in Chicago: The Relationship of the Growth of Chicago to the Rise of Its Land Values, 1830–1933 (1933).

[12] Fed. Hous. Admin., Underwriting Manual: Underwriting and Valuation Procedure Under Title II of the National Housing Act (1938).

[13] Facing Segregation, supra note 8.

[14] Camila Domonoske, Interactive Redlining Map Zooms in on America’s History of Discrimination, NPR, Oct. 19, 2016,

[15] Id.

[16] Downloads & Data, supra note 9.

[17] See Mapping Inequality: Redlining in New Deal America (1935-1940), Mapping Inequality, (last visited Sept. 10, 2021).

[18] Idaho Matters, Why Idaho’s Racist History Matters: Part 2, Boise St. Pub. Radio, Aug. 13, 2020, available at

[19] Id. 

[20] See Rothstein, supra note 6.

[21] Neil Bhutta et al., Disparities in Wealth by Race and Ethnicity in the 2019 Survey of Consumer Finances, FEDS Notes (Sept. 28, 2020),

[22] Joint Center for Housing Studies of Harvard University, The State of the Nation’s Housing 3 (2021) (finding “differences in homeownership rates between households of color and white households remain substantial” with the Hispanic-white homeownership gap at 23.8 percentage points and the Black-white homeownership gap at 28.1 percentage points).

[23] Fed. Res. Sys., 2019 Survey of Consumer Finances, (last updated May 20, 2021).

[24] Ala. Ass’n of Realtors, et al. v. Dep’t of Health and Hum. Services, No. 21A23 (U.S. Aug. 26, 2021) (per curiam).

[25] U.S. Census Bureau, Week 36 Household Pulse Survey: August 18 – August 30 (Sept. 8, 2021),; U.S. Dep’t of Hous. and Urban Dev., Off. of Pol’y Dev. and Res., Census Household Pulse Survey: Key Phase 3 Housing Payment Findings, PD&R Edge (Apr. 26, 2021), (last updated Sept. 1, 2021).

[26] Conor Dougherty, The Californians Are Coming. So Is Their Housing Crisis., NY Times, Feb. 12, 2021 (last updated Jun. 21, 2021). 

[27] See Sally Krutzig, Housing Trend Finally Breaks: Boise-Area Home Prices Drop for First Time in 15 Months, Idaho Statesman, Sept. 9, 2021 (stating that even though median homes prices declined in Ada and Canyon counties by between 1-2 percent in August 2021, “the Treasure Valley market is still far above what it was last year” with an almost 33 percent increase in median home prices since August 2020); Ryan Suppe, Study: ‘Deep and Unrelenting’ Need for Affordable Housing in Boise, Idaho Press, Aug. 25, 2021 (“According to a housing needs analysis by the city of Boise, 67% of renters and 36% of homeowners cannot afford housing the local market is producing”).

[28] United For ALICE et al., ALICE in Idaho: A Financial Hardship Study 1 (2021),

[29] Nat’l Low Income Hous. Coalition, Out of Reach: The High Cost of Housing 74-77 (2021),

[30] Id.

[31] Id.

[32] Id.

[33] Id.

[34] Idaho Code § 33-138(3)(a)(ii) (2021).

[35] Hayat Norimine, Idaho Legislature Fast-Tracks ‘Critical Race Theory’ Bill Despite Student Protests, The Spokesman-Review, Apr. 27, 2021.

[36] Id.