Legal Forum in Newark Points to Redlining as Root of Segregation

By MARK J. BONAMO

A group of legal heavyweights, along with government and advocacy groups, came to Newark to examine redlining - a discriminatory practice that has shaped the city, the state, and the nation.

The April 19 event at Seton Hall Law School, hosted by the U.S. Justice Department's Civil Rights Division, looked at how residential redlining has systematically denied the financial services needed for homeownership based on race or ethnicity and has steered home buyers and renters to certain neighborhoods and away from others. Redlining has contributed to the de facto segregation seen between the cities and suburbs. The conference's attendees not only outlined the ongoing problem, but looked to potential solutions.

Redlining got its name from the use of color-coded maps in the 1930s that outlined areas where Black residents lived and were therefore deemed risky investments. While the Fair Housing Act of 1968 prohibited housing discrimination, U.S. Attorney Philip Sellinger for the District of New Jersey pointed out that the racial and socioeconomic inequalities exacerbated by redlining is not yesterday's news.

"Progress has been uneven, and it's also been slow," Sellinger said. "It does not mask the reality that redlining is happening in New Jersey, today, and it's happening right here in Newark. Achieving the American dream should be color-blind. Redlining is racist, pure and simple, and New Jersey will not tolerate that kind of intentional and systemic discrimination."

Sellinger pointed to recent court cases as proof of a concerted crackdown on redlining in the state. Last year, the New Jersey-based Lakeland Bank agreed to a $13.2 million settlement with the U.S Justice Department over allegations that it deliberately avoided selling mortgages to otherwise eligible Black and Hispanic customers. The government asserted that the bank withheld mortgages and other loans from Black and Hispanic areas of Newark as well as parts of Essex, Morris, Somerset, Sussex and Union counties, a classic redlining practice.

The consent agreement created in the aftermath of the lawsuit established a $12 million loan subsidy fund and the creation of bank branches in minority areas, including one in Newark.

Assistant Attorney General Kristen Clarke, who leads the U.S. Department of Justice's Civil Rights Division, noted the need for federal vigilance when it comes to ending redlining.

"We know that there are stark racial disparities that persist when it comes to homeownership and economic opportunities," Clarke said. "Holding banks and financial institutions accountable for the ways in which they continue to violate the law is critical."

The racial disparities when it comes to homeownership are stark. According to a 2022 study released by the New Jersey Institute for Social Justice, an advocacy organization based in Newark, just 38 percent of Black New Jersey households own homes, compared to 75 percent of White New Jersey households. In addition, Black New Jerseyans are two times more likely to be denied a loan for the purchase of a home than White New Jerseyans. Only 23 percent of people in Newark own their homes, while in nearby Millburn, 81 percent of people own their homes.

According to Newark Mayor Ras Baraka, these numbers don't come from nowhere.

"We're not just interested in punishing people who are participating in these acts, we're actually looking for repair," said Baraka, emphasizing that both government and business institutions should be compelled to contribute to solutions. "The public sector was complicit in this activity. That was probably one of the first public and private partnerships."

The public sector in New Jersey has not been completely idle when it comes to trying to address housing inequities. The Mount Laurel decisions in the 1970s and 1980s were the first time a state Supreme Court prohibited economic discrimination and required state and local governments to provide affordable housing opportunities.

One of the issues in which the effects of redlining resound is in de facto school segregation. New Jersey's schools are among the most segregated in the country. Nearly half of New Jersey's Black students attend schools that are at least 90% non-White, and nearly 70% of White students attend schools that are three-fourths White, according to the state Department of Education.

For the Rev. Dr. Charles Boyer, pastor of the Greater Mt. Zion A.M.E. Church in Trenton, when it comes to Garden State school segregation, redlining is "the main driver."

"The whole reason that we have almost 600 school districts in the state of New Jersey is because white folks did everything they could to stay away from us, to segregate poverty, to devalue our homes, to strip wealth away, and to keep their kids in different school districts than ours," Boyer said. "So when it comes down to the education system, we have to abolish the zip code barrier because the state is unconstitutionally enforcing something illegal. And therefore, the state is a major actor - is the primary actor - in not only enforcing segregation, but in actually criminally putting kids in disadvantaged schools and situations."

"I think redlining goes hand in hand with segregation, which goes hand in hand with disinvestment, which goes hand in hand with the racial wealth gap we have, which is one of the worst in the country," said Ryan Haygood, a resident of Newark's South Ward, civil rights lawyer, and president and CEO of the New Jersey Institute for Social Justice. "I live in a neighborhood that has been the home of several Newark mayors, but that has more check cashing places than banks."

One Newark resident who came to the redlining forum vociferously spoke out.

"You're talking about redlining? Please come in here and help us," said Donna Jackson, a community activist who also noted how large corporations are now buying wide-ranging tracts of Newark housing. "We need to really do something."

And while Haygood values the government's help, he pointed out how Newark residents can help themselves in the ongoing battle against redlining.

"Before this meeting today, I called [Lakeland Bank] to see when the Newark bank was going to open, and the answer was not yet," Haygood said. "That's on us to ensure that implementation happens."

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