In the 1960s, Northwestern University sociologist John McKnight coined the term redlining, the practice of denying or severely limiting service to customers in particular geographic areas, often determined by the racial composition of the neighborhood. The term came from the practice of banks outlining certain areas in red on a map; within the red outline, banks refused to invest. With no access to mortgages, residents within the red line suffered low property values and landlord abandonment; buildings abandoned by landlords were then more likely to become centers of drug dealing and other crime, thus further lowering property values. Redlining in mortgage lending was made illegal by the Fair Housing Act of 1968, which prohibited such discrimination based on race, religion, gender, familial status, disability, or ethnic origin, and by community reinvestment legislation in the 1970s. However, redlining has sometimes continued in less explicit ways, and can also take place in the context of constrained access to health care, jobs, insurance, and more. Even today, some credit card companies send different offers to homes in different neighborhoods, and some auto insurance companies 15 offer different rates based on zip code. Redlining can lead to reverse redlining, which occurs when predatory businesses specifically target minority or low income consumers for the purpose of charging them more than would typically be charged for a particular service. When mainstream retailers refuse to serve a certain area, people in that area can fall prey to opportunistic smaller retailers who sell inferior goods at higher prices.

Consider each of the answer choices separately and indicate all that apply.

Which of the following can be inferred from the passage?

• Redlining ceased with the passing of the Fair Housing Act in 1968.
• Providing services based on zip code may be a form of redlining.
• Access to mortgages is related to higher property values

Which of the following, not mentioned in the passage, would qualify as an example of reverse redlining as defined in the passage?

(A) A bank refuses to offer mortgages to consumers in certain neighborhoods.
(B) Residents of low-income neighborhoods are less likely to be hired for positions than residents of higher-income neighborhoods, even when the applicants have the same qualifications.
(C) Police respond to reports of crimes more quickly in some neighborhoods than in others.
(D) A grocery store in a low-income neighborhood sells low-quality produce for high prices, knowing that most residents do not have the ability to buy elsewhere.
(E) An auto insurance company hires an African American spokesperson in a bid to attract more African American consumers.




Which correctly describes a sequence of events presented in the passage?

(A) Subprime mortgages lead to widespread defaults, which lead to landlord abandonment.
(B) Reverse redlining leads to landlord abandonment, which leads to the use of buildings for crime and drug dealing.
(C) Landlord abandonment leads to redlining, which leads to crime and drug dealing.
(D) Redlining leads to reverse redlining, which leads to constrained access to health care, jobs, insurance, and more.
(E) Redlining leads to landlord abandonment, which leads to the use of buildings for crime and drug dealing.