Community Development Initiatives
Whilst the range of planning initiatives outlined earlier sought to ensure that affordable opportunities were included as part of new development in buoyant housing markets, other initiatives sought to counteract the problem of neighbourhood decline and disinvestment. One of the factors exacerbating the decline of inner city areas was the discriminatory practices of mortgage lenders who would frequently ‘redline’ particular areas. The Home Mortgage Disclosure Act of 1975 required lenders to report on lending by census tract, which began to highlight racial (and spatial) disparities in patterns of housing finance. In 1977, the Community Reinvestment Act (CRA) was passed, requiring depository institutions to provide lending and investment to the entire community it services, and enabling community organisations, advocacy groups, local governments and others to challenge lenders for inadequate service. Whilst these provisions were slow to take effect, it became prevalent for banks to enter into agreements with these groups to prevent litigation. Over time, these agreements, which could include financing for low- and moderate-income housing development and small businesses, became an important source of funding for renewal of inner city areas, and have made mortgages more accessible to lower-income and minority groups (Schwartz, 2015). However, in recent years the law has become less effective in helping disadvantaged communities gain mortgage finance, as federal regulations and changes in the lending industry has meant that fewer institutions are subject to the CRA.