California Real Estate Practice Exam

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What is discrimination in lending policies based on location known as?

Zoning
Redlining
Gerrymandering
Greenlining

The correct answer is: Redlining

Discrimination in lending policies based on location is known as redlining. This term refers to the practice where banks and insurers refuse to offer mortgages or insurance to residents of certain areas, often based on racial or ethnic demographics rather than the creditworthiness of the individuals or the value of the properties. Redlining has historically contributed to systemic inequalities in housing and access to capital, particularly affecting minority communities. Zoning pertains to the governmental regulation of land use, dictating how properties in specific geographic areas can be used, but it does not specifically relate to discriminatory lending practices. Gerrymandering involves manipulating electoral district boundaries to favor a particular political party, which does not relate to lending discrimination. Greenlining, on the other hand, is a practice that encourages equitable access to financial products for all individuals, counteracting the effects of redlining by promoting fair lending initiatives.