What practice involves the refusal to make loans based on geography?

The practice involving the refusal to make loans based on geography is known as redlining. Redlining refers to the discriminatory practice where lenders or insurers deny services, such as mortgages or insurance, to individuals in certain areas, often based on the racial or ethnic composition of that area. This practice has historically targeted neighborhoods predominantly inhabited by minority groups and has contributed to systemic inequality in housing and community resources.

Redlining stems from maps that were created to outline areas deemed too risky for investment, which were often marked in red. These maps influenced lending decisions for decades, perpetuating cycles of poverty and disadvantage in specific communities. It is a significant issue as it not only affects individual access to housing but also impacts community development and the ability of residents to accumulate wealth over time.

Understanding redlining is essential as it highlights the ongoing issues of discrimination and inequality in real estate lending and housing markets, which are crucial topics in the field of real estate and social justice.