Redlining is the illegal practice of refusing loans, insurance, or other services to people in certain geographic areas based on race or other protected characteristics, regardless of individual qualifications. Redlining violates the Fair Housing Act, the Equal Credit Opportunity Act, and the Community Reinvestment Act. In California, the California Civil Rights Department (CRD, formerly DFEH) investigates redlining complaints under the California Fair Employment and Housing Act (FEHA). Unlike steering (which involves agents directing buyers), redlining is practiced by lenders and insurers who deny or limit financial services based on neighborhood demographics. California adds sexual orientation, gender identity, gender expression, marital status, and others as additional protected classes beyond the federal seven.

Fair HousingIntermediateCalifornia Exam

What is 'redlining'?

AMarking property boundaries on a survey, consistent with federal Fair Housing Act protections

BThe illegal practice of denying services to residents of certain areas based on demographicsCorrect

CA type of property deed, per standard fair housing compliance practice

DA zoning designation for commercial areas, under federal and California fair housing law

Why The illegal practice of denying services to residents of certain areas based on demographics Is Correct

Answer B: The illegal practice of denying services to residents of certain areas based on demographics

Redlining is the illegal practice of refusing loans, insurance, or other services to people in certain geographic areas based on race or other protected characteristics, regardless of individual qualifications. Redlining violates the Fair Housing Act, the Equal Credit Opportunity Act, and the Community Reinvestment Act.

Exam Tip: Fair Housing

Fair Housing questions test both federal (Fair Housing Act of 1968) and state-level protected classes. The federal protected classes are race, color, religion, national origin, sex, familial status, and disability. Many states add additional protections.

Key Fair Housing Terms in This Question

Deed

A written legal instrument used to transfer ownership of real property from one party (grantor) to another (grantee).

Zoning

Local government regulations that control land use by dividing areas into zones specifying permitted uses, building sizes, and densities.

Fair Housing Act

Federal law prohibiting discrimination in the sale, rental, or financing of housing based on race, color, national origin, religion, sex, disability, and familial status.

Steering

An illegal practice where a real estate agent directs buyers toward or away from certain neighborhoods based on the buyer's race, religion, national origin, or other protected characteristics.

People Also Study

Key Terms to Know

Redlining

An illegal practice where lenders or insurers deny services or charge higher rates in certain neighborhoods based on the racial or ethnic composition of those areas.