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From Redlining to Reinvestment: Community Responses to Urban Reinvestment.

Have you ever wondered, "Why in every metropolitan area are there areas that need major investment?" And, "How did such deterioration occur?" Answers to these and other disturbing questions about the landscape of urban America are found in From Redlining to Reinvestment, which addresses the social and economic effects of redlining in our urban communities. This book provides an insight on the reasons for disinvestment in parts of our cities, the effects of which have direct monetary impact on the entire community.

The practice of redlining is as common to American culture as baseball, hot dogs and apple pie. Author/editor Gregory Squires describes redlining as "a process by which goods or services are made unavailable or are available only on less-than-favorable terms to people because of where they live...." The book begins with a brief forward that includes a historical synopsis of events leading to the Community Reinvestment Act of 1976 and the Financial Institution Reform, Recovery, and Enforcement Act of 1989.

The author exposes the redlining phenomenon using original essays from well-known community activists. Case studies on several metropolitan areas throughout the country describe the extent and effects of redlining in those cities and how the communities dealt with redlining practices. An underlying theme is that resistance to community reinvestment channels through all levels of the public and private sector.

A thoughtful reader learns from this book that reinvesting in urban communities depends on having a community organization that thoroughly understands the extent of the problem. This can be accomplished through the use of Home Mortgage Disclosure Act (HMDA) data to analyze lending patterns. More importantly, a community-based effort must be assembled to challenge the illegal act of redlining, always keeping in mind that the desired end result is to provide for resources that place greater priority on capital investment than on direct government support for subsistence maintenance. An example would be the "token" use of dollars to supplant current homeowners and community improvement with a federally subsidized program for low-to moderate-income people.

What is very evident, as pointed out by the author, is that the better prepared the community organization is, the better the results of the reinvestment campaign. For example, in Atlanta, where organizing was the weakest of the cities studied, the results were the weakest. By contrast, in Chicago and Pittsburgh results were quite different, as major changes were made and the mechanism to monitor long-term commitments was put in place.

Redlining has long been an accepted part of American culture. Whether condoned by the public official who does not want to alienate the financial community or supported by the local banker who says his loan officers do not redline, this problem has gone conveniently unnoticed. The tools are now in place, however, to retrieve information on how communities combat disinvestment.

Public officials who are concerned about the financial consequences of how deteriorated urban areas affect municipal operations would find this book helpful in relation to tax base consequences. And those wishing to expose certain practices that hamper growth and stymie economic development will find some examples of how other communities have successfully done this. Last, but not least, those in the financial and banking communities who want to expand operations will find evidence of the potential seriousness of community challenges to their expansionary initiatives, challenges based on the financial institution's own prior reinvestment practices.

From Redlining to Reinvestment is available for $46.95 from Planners Bookstore, American Planning Association, 1313 E. 60th Street, Chicago, IL 60637-2891 (312/955-9100).

Reviewed by Alan McDougle, director of finance and purchasing, City of Lima, Ohio, and member of GFOA's Committee on Cash Management.
COPYRIGHT 1993 Government Finance Officers Association
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

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Author:McDougle, Alan
Publication:Government Finance Review
Article Type:Book Review
Date:Jun 1, 1993
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