Project Spotlight: Reversing Redlining

Louisville Metro Government's Office of Housing and Community Development, with $8 million in funding support from the American Rescue Plan, has been working diligently to help counter the negative effects of historical redlining. Redlining refers to the practice of denying loans in certain neighborhoods because of socioeconomic characteristics rather than physical, design, or structural characteristics. Throughout the early 20th century, the Federal Government put a series of policies into place to enforce racial capitalism and racial banishment that effectively locked Black communities out of wealth access and produced an uneven housing market that systematically excludes and dispossesses Black people from stable and secure housing. Conventional redlining still exists. Examples include refusal to provide delivery in certain areas, business loan denials regardless of creditworthiness, and refusal to write property insurance policies or dropping property owners from insurance coverage altogether.

REVERT & Foreclosure Funding

In December 2022, Louisville Metro Council awarded $13 million to the Louisville Affordable Housing Trust Fund (LAHTF) to combat the injustices of families who experienced redlining. LAHTF’s mitigation program is known as REVERT (Restoring Each Viable Economically Redlined Territory). 

The primary goal is to provide homeownership opportunities in formerly redlined areas. This will target communities and populations disparately impacted by the COVID-19 pandemic. This target population includes front line workers, low-to-moderate income households, people of color, etc. The secondary goal is to eradicate vacant and abandoned housing in those targeted areas. The ultimate goal is to assist 200 households at a cap of $50,000 per household. To learn more about LAHTF and their plans to reverse redlining, please visit REVERT.

On March 20, 2024, hosted a press conference to release the final My Louisville Home housing strategy, which includes support for programs such as REVERT.

“For far too long, far too many people have had to pay more than they can afford for a place to live. That’s unacceptable. While I am encouraged by the signs of progress we are seeing, the updated Housing Needs Assessment shows that we have a long way to go to ensure that everyone has a safe place to call home,” said Mayor Greenberg. “We are going to keep working with urgency to create quality and affordable housing in all neighborhoods – not just other peoples’ neighborhoods.”

This includes increased funding for the Louisville Affordable Housing Trust Fund to support new affordable housing construction and for housing programs such as Louisville Metro’s Down Payment Assistance, Louisville Metro Housing Authority’s Section 8 to Homeownership, and the Trust Fund’s REVERT that help low-income residents like Hope Turner of Park DuValle access homeownership.

“It was such a blessing. I was able to buy a house for me and my children. They have their own rooms,” said Turner. “I am very blessed and honored for all the programs I used. I used it as a steppingstone to better myself because I wanted better for my kids.” 

Turner was able to take advantage of both the Reversing Redlining funding as well as the Down Payment Assistance program. Housing Needs Press Conference

Down Payment Assistance

The Down Payment Assistance program increases homeownership by providing partially forgivable loans to assist with purchasing homes for low to moderate income individuals or families. This has given local residents that may not have been able to otherwise purchase a home, an opportunity to do so.

Homeownership can lead to generational wealth. According to Investopedia, generational wealth is defined as, "assets passed by one generation of a family to the next. In some cases assets are transferred after death in the form of an inheritance. In others they are passed to the next generation while the giver is still alive."

Due to historic redlining, generational wealth has been hard to achieve by people of color in low-income areas of the county. By building generational wealth, families are able to establish more permanent stability and endurance within their communities. 321 households were reached and 145 homes were closed on. Follow this link to see more details about this and other community impact projects: Community Impact Projects Dashboard

The funds that were remaining were allocated to the Home Repair project through general funds, allowing them to be used past the life of the ARP project. This project continues to be available to the public on behalf of Housing and Urban Development (HUD) and other agencies. To find out how to apply for this program, please see Down Payment Assistance Program.