Historical Housing Discrimination, Redlining, and the Contemporary Distribution of Local Economic Development Funding: The Case of Chicago.

This article examines the allocation of local economic development funding in Chicago, Illinois, focusing on whether such funding is directed toward neighborhoods historically classified as financially risky—Grades C and D—by the Home Owners' Loan Corporation (HOLC) and the Federal Housing Administration (FHA). The study finds that these historically marginalized areas receive significantly more local economic development funding, particularly through tax increment financing (TIF), compared to more favorably graded neighborhoods (Grades A and B). However, the analysis reveals limited and inconsistent evidence that this funding correlates with increases in median home values, suggesting that while funds flow into historically underinvested communities, they may not substantially enhance residential wealth as measured by property values. The research highlights the importance of distinguishing between the impacts of private-sector (HOLC) and public-sector (FHA) historic housing policies and calls for further investigation into how local economic development programs can effectively address long-standing inequities.