Association for Public Policy Analysis & Management

In the 1930s, the Home Owners Loan Corporation (HOLC) created maps of major American cities that resulted in disinvestment in African American neighborhoods. Today, these neighborhoods are more likely to be poor and to have lower home values. Place-based federal programs are one tool the federal government uses to reinvest in areas of concentrated disadvantage. But are these programs effectively targeting historically marginalized places, or are they again being overlooked? In this paper, we use new data on federal place-based initiatives since the 1990s and geocoded data from historical HOLC maps to understand the relationship between historical redlining and federal place-based funding today. Results indicate that areas that were redlined (graded “D” on HOLC maps) received substantially more federal funding than areas graded more favorably (“A/B/C”). This indicates that government programs are targeting places that have experienced historical disinvestment and discrimination. The average redlined (or D graded) tract received over $17 million in federal place-based funding since 1990, or about $9,000 per capita, while the highest graded tracts (A graded) received just under $2 million on average or about $567 per person. This spatial connection between historical neighborhood redlining and contemporary federal investment persists controlling for MSA fixed effects and other contemporary neighborhood characteristics. The intensity of current place-based investment and the connection to historical redlining vary regionally, however, with the strongest connections in the South and the weakest in the Midwest. We conclude by discussing the potential and the challenges of place-based policy for addressing durable urban inequality.