What is redlining and how can it affect property valuations?

• A. Marketing All Neighborhoods Equally
• B. Providing Loans To All Neighborhoods At The Same Rate
• C. Refusing Or Limiting Financial Or Real Estate Services To A Neighborhood Because Of Its Demographic Makeup; Depresses Valuations And Is Illegal
• D. Revaluing Properties Upward Due To Demographics

Answer: (C)

Redlining is the discriminatory practice of denying or limiting financial or real estate services to a neighborhood based on the residents’ demographic makeup rather than on individual creditworthiness or property risk. When lenders pull back from financing homes or property improvements in a marked area, there’s less mortgage activity, fewer refinancings, and reduced demand from buyers. That drop in investment and activity can lead to slower property turnover, more maintenance neglect, and weaker recent sale prices, all of which tend to depress property valuations in the area. This practice is illegal under federal fair housing and lending laws because it targets people based on where they live, not on individuals’ qualifications, and it undermines access to capital and opportunity in those communities.