The Holc Grades System and Its Limitations

The Holc Grades System was created by the Home Owners' Loan Corporation (HOLC) in the 1930s to evaluate the risk of lending to homeowners in different neighborhoods.

HOLC used a color-coded system with four grades: A, B, C, and D, to categorize neighborhoods based on their perceived risk.

The grades were determined by HOLC's appraisers, who considered factors such as property values, income levels, and racial and ethnic composition of the neighborhood.

Neighborhoods graded A were considered the safest and most desirable, while those graded D were considered the riskiest and most undesirable.

The system was used to decide which neighborhoods were eligible for HOLC's mortgage insurance, effectively determining who had access to affordable housing.

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HOLC grades were determined by the Home Owners' Loan Corporation (HOLC) in the 1930s, with grades ranging from A (Best) to D (Hazardous).

Each grade was based on a neighborhood's perceived lending risks, with a significant determinant being the racial composition of the area. The grades were used to map the trajectory of urban heat islands in American cities.

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The grades were also influenced by factors such as building types, construction types, and population growth.

Here's a breakdown of the racial demographics for each HOLC grade:

These statistics highlight the significant disparities in racial demographics between HOLC grades, with neighborhoods receiving lower grades often having higher concentrations of minority populations.

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The dataset used to study HOLC grades was created and funded by FiveThirtyEight, using 2020 Census data.

It was matched with redlining maps and HOLC grades created by the Home Owners' Loan Corporation from 1935 to 1940, as provided by the Mapping Inequality Project.

The dataset has 30 columns, which include the metro area of a case, its state, and its region within the United States.

Each observation or row represents a certain case with a designated metro area and HOLC grade assigned to it, containing all the data about the population that resides within both that metropolitan area and HOLC grade.

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There are 551 observations in total.

The accuracy of the 2020 Census may have issues undercounting or overcounting American citizens, which can affect the data.

The creators of this dataset preprocessed the data to find the percentages and other statistics surrounding each racial group's prevalence in a metro area with a certain HOLC grade.

This was done to easily compare the disparities highlighted by these statistics.

The HOLC grading system provides a fascinating glimpse into the demographics of the United States during the early 20th century.

The percentage of White people within a HOLC grade of A is 77.54%, while it drops to 62.86% for a grade of B and 48.43% for a grade of C.

In contrast, the percentage of Black people within a HOLC grade of A is only 5.11%, but it increases significantly to 12.39% for a grade of B and 19.96% for a grade of C.

Hispanic people make up 5.38% of the population in A zones, 7.83% in B zones, and 11.26% in C zones.

Asian people are relatively scarce in A zones, making up only 1.92% of the population, but their presence is slightly more pronounced in B zones at 2.1% and C zones at 2.22%.

The percentages of White and Black people in D zones are 39.85% and 28.44%, respectively, indicating a significant decline in both populations in these areas.

The percentages of Hispanic and Asian people in D zones are 11.69% and 1.69%, respectively, highlighting the challenges faced by these communities in these areas.

The percentages of all other racial populations in A, B, C, and D zones are 5.09%, 5.59%, 5.79%, and 5.61%, respectively.

Our project's limitations are worth acknowledging, as they can impact the conclusions we draw from our analysis. One major bias is that we expected to find a correlation between racial demographics and HOLC grades due to the negative history surrounding redlining, which influenced the research questions we asked.

This bias means our project is better suited to answer questions about the correlation between racial demographics and HOLC grades, rather than exploring other factors that might have been at play.

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We couldn't sample the entire US, as most of our data comes from a few metropolitan and micropolitan areas. This offers a better understanding of how different urban areas display a relationship between racial demographics and HOLC grades.

However, it may not accurately reflect how this relationship manifests in rural and suburban areas of the US.

The Neighborhood Redlining Grade is a crucial aspect of HOLC grades. It's a two-digit code that ranges from 1 to 4, with 1 being the best and 4 being the worst.

The grade is determined by various factors, including the area's racial and ethnic composition, economic conditions, and physical characteristics. The HOLC Neighborhood Redlining Grade (ID: 28) provides a list of attributes that contribute to the grade.

Here are some key attributes that influence the Neighborhood Redlining Grade:

These attributes, among others, help determine the Neighborhood Redlining Grade, which in turn affects the overall HOLC grade.

The HOLC grades were used to evaluate neighborhoods based on their economic and social characteristics. The grades were assigned on a scale of 1 to 4, with 1 being the best and 4 being the worst.

Each HOLC grade has its own set of characteristics. For example, grade 1 neighborhoods were considered to be of high value and had a high percentage of homeowners.

Here are some of the characteristics of each HOLC grade:

Grade 1 neighborhoods were also considered to be in good condition, with a high percentage of improved land and a low percentage of vacant land. They also had a high percentage of sales demand and a high sales value.

In contrast, grade 4 neighborhoods were considered to be in poor condition, with a low percentage of improved land and a high percentage of vacant land. They also had a low percentage of sales demand and a low sales value.

The HOLC grades were used to determine the creditworthiness of a neighborhood and to assign mortgage insurance premiums. The grades were based on a variety of factors, including the neighborhood's economic characteristics, social characteristics, and physical characteristics.