Committee looks at land use, gentrification, lingering effects of redlining
Redlining and gentrification were the latest topics discussed Thursday in a series of committee hearings spurred by the Illinois Legislative Black Caucus as its members lay the groundwork for its veto session agenda.
While lawmakers have already held six other hearings focusing on informing the four-pillar Black Caucus agenda, Thursday’s joint hearing of four state Senate committees was the first to focus on economic access, equity and opportunity.
The goal was to convey the historical significance of gentrification and redlining and demonstrate how such practices contribute to racial economic divides.
Redlining is a term used to describe the practice of discrimination, through which banks and financial institutions refuse to provide services to certain neighborhoods based on racial composition rather than household incomes and legitimate determinants of risk.
The practice dates back to the 1930s, when the Federal Housing Administration would refuse to insure mortgages in and near Black neighborhoods. The term was coined based on the red lines drawn around such communities on maps to signify they were off limits for investment.
The practice also involved depressed appraisals of property value in redlined areas, decreasing the wealth of communities that were primarily Black or Latino.
In a 2017 research paper that was revised in August 2020, the Federal Reserve Bank of Chicago found that redlining, despite being outlawed legislatively in the 1970s, created “reduced home ownership rates, house values, and rents and increased racial segregation” for Black Chicagoans. It also heavily influences credit access to this day and contributes to the massive wealth gap between Black Americans and white Americans.
Systemic remnants of redlining – such as the difficulty Black Americans have receiving bank loans compared to white counterparts and the underappraisal of Black-owned land – will be the subject of future joint hearings which could inform ILBC legislation to be heard in the Nov. 17-19 and Dec. 1-3 veto session.
Gentrification, according to Stacey Sutton, associate professor of urban planning and policy at the University of Illinois Chicago, is a “a spatial expression of inequality” where outside investors bring in massive capital and purchase land in low-income, predominantly Black or Latino areas.
Rather than investing in local businesses and increasing the value of property held by current residents, gentrification brings in new businesses and new, higher-earning residents who receive those benefits.
The process inflates property values and increases the cost of living, and eventually economic pressures force the former residents to sell their homes and move. On paper, gentrification has increased the value of the neighborhood, but has changed its racial demographics and negatively impacted the original residents.
“If you ask people in neighborhoods that have been historically and systematically disinvested, what they want are the amenities that we all want,” Sutton said. “They want to be able to shop. They want to be able to walk in their neighborhood, they want their property values to go up. You can do that in a way in which people do not feel or are not explicitly excluded from that area.”
The committee also discussed the impact COVID-19 is having on Illinois renters who find themselves in an economic crisis due to the pandemic. With record levels of unemployment, more than 320,000 Illinois households could face eviction filings in January 2021 as a result of rent shortfalls, according to Illinois Housing Development Authority Executive Director Kristen Faust.
The next joint hearing on the topic of economic equity is scheduled for Oct. 15 and will feature representatives from banking and financial institutions to discuss racial inequities in the process.
The Thursday hearing mainly focused on historical background on the topics, rather than legislative recommendations or contemporary statistical data discussed in other ILBC-spurred hearings on early childhood education and sentencing reform.
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