Long-term Effects of Redlining on Environmental Risk Exposure

Abstract

Climate change exacerbates heat and precipitation extremes, further amplified in urban environments. While studies have shown that redlining-the process of denying neighborhoods access to capital based on a discriminatory grading scheme-can be causally linked to present-day socioeconomic outcomes, observed patterns of inequitable climate risk remain largely unexplored. This paper uses a boundary design to estimate the persistent effects of redlining on present-day exposure to environmental risks. Properties in areas assigned a lower-credit grade by the Home Owners' Loan Corporation (HOLC) in the 1930s have 3% higher exposure to flooding risk and a 0.08 • F higher temperature today compared to similar properties in higher-graded areas. These differences are driven by lower tree coverage and ground surface perviousness (important measures of environmental capital) in lower-graded areas. Our findings highlight the long-lasting effects of historical institutions on society's unequal exposure to climate risks.