History of Redlining in Chicago & Its Current Impacts on the City

Redlining isn’t just a term buried in history textbooks. It’s a lived reality that continues to shape the landscape of Chicago today. At The 1937 Foundation, we believe that understanding this history is essential to healing from it. From housing to healthcare to cannabis access, the effects of redlining ripple through every corner of our city—especially in Black and Brown communities. 

In this blog, we’ll break down the history of redlining in Chicago: how it first took root as an intentional tool of segregation. Then, how systems of power upheld it for nearly a century, and how those same tactics show up in different forms today. 

We’ll also spotlight a modern-day example that illustrates just how far-reaching the effects remain, such as the lack of legal cannabis access on the South Side of Chicago. It’s easy to identify the communities most harmed by the War on Drugs. But, the harsh truth is that these same communities are still being left out of the industry meant to repair it. Let’s discuss.

How Redlining Took Root in Chicago

Redlining began in the 1930s, when the federal government and private banks worked hand in hand to determine which neighborhoods deserved investment—and which should be denied it. The Home Owners’ Loan Corporation (HOLC) literally drew red lines on maps to mark “hazardous” areas. These areas were overwhelmingly Black and Brown neighborhoods, regardless of income levels.

In Chicago, these red lines carved out the South and West Sides as undesirable, locking communities of color out of fair housing loans, insurance coverage, and business investments. These practices didn’t just happen in backrooms—they were official policy, enforced by the federal government. Then they were upheld by major banks, real estate associations, and local governments.

The goal was clear: segregate the city and limit Black and Brown families from building generational wealth through homeownership. Even as Black residents moved northward during the Great Migration in search of better opportunities, they found themselves pushed into overcrowded, under-resourced communities. Within these, there were limited housing options and no support for growth.

The Legacy: Displacement, Disinvestment, and Deep Inequities

The damage wasn’t short-term. Once redlined, neighborhoods were targeted for predatory lending practices, neglected in infrastructure improvements. Not to mention zoned for industrial projects that further degraded public health and property values.

By the 1960s and 70s, redlined neighborhoods in Chicago became the focus of urban renewal programs—not to support residents, but to clear them out. The demolition of public housing like Cabrini-Green and the expansion of the Dan Ryan Expressway displaced thousands. Meanwhile, white communities benefited from federal programs like the GI Bill and FHA loans, which largely excluded non-white applicants.

Over the decades, the city’s Black and Brown communities have been systematically boxed out of the wealth-building opportunities given to others. Generations grew up in neighborhoods with fewer parks, worse schools, higher crime rates, and limited access to healthcare or quality jobs. This was not because of personal choices, but because of decisions made by systems of power.

Today’s Redlining: A New Face with the Same Harm

Redlining may not be legal anymore, but its blueprint still guides how power moves in Chicago. Walk through the city today and you’ll find the same divisions rooted in the HOLC’s red maps. There are affluent, predominantly white neighborhoods in the North. And then disinvested, majority Black and Brown communities in the South and West.

One of the clearest modern examples? Legal cannabis.

Despite Illinois legalizing adult-use cannabis in 2020—with equity language baked into the legislation—there are still no licensed dispensaries on the South Side of Chicago. Residents who bore the brunt of the War on Drugs must travel to the North Side to buy legal weed. And for many, that’s not even an option. A large percentage of South Side residents don’t own vehicles. Keep in mind the public transit trip to a dispensary can take over an hour.

This isn’t just about inconvenience—it’s about access and ownership. Communities most criminalized for cannabis are now being locked out of its benefits. Not only are South Side consumers left behind, but so are potential South Side entrepreneurs.

In neighborhoods where cannabis arrests were once sky-high, we now see a gaping absence of Black-owned dispensaries serving the very communities that want their products the most. This perpetuates a cycle where wealth from legal cannabis flows out of historically redlined communities rather than into them.

And it’s not just about the weed—it’s about what cannabis revenue could fund. Community gardens, local reinvestment, health and wellness centers, expungement clinics, youth programs—the list goes on. Without access to licenses or local dispensaries, these reinvestment opportunities stay locked behind invisible gates. Ones that have been built by decades of systemic exclusion.

Moving Forward: From Awareness to Action

The legacy of redlining can’t be erased overnight—but it can be challenged. At The 1937 Foundation, we’re not just talking about equity; we’re actively building it. We advocate for policies that prioritize South and West Side communities in licensing, zoning, and funding. We support entrepreneurs of color in the cannabis space. And we push for reinvestment in the same neighborhoods that were once deemed “hazardous.”

To truly address the impact of redlining, we must start with where it hit hardest—and where it’s still hitting today. That means recognizing that the fight for cannabis equity is part of a larger fight for economic justice. It means ensuring South Side communities don’t get left behind again, just as a new industry begins to bloom.

It also means keeping history alive—not as a footnote, but as a foundation. When discussing the modern face of inequality, we have to name where it started and how it was maintained. Redlining wasn’t just a policy—it was a coordinated strategy of racial exclusion. Its modern echoes are still heard today. In every closed loan, every denied license, and every neighborhood left without access to essential services.

Join the Movement

Redlining shaped Chicago’s past—but it doesn’t have to define its future. At The 1937 Foundation, we’re working to reverse the damage caused by systemic discrimination and uplift the communities that have always been the heart of this city. From supporting Black-owned businesses to educating the public about cannabis justice, we’re committed to creating pathways for health, wealth, and knowledge in BIPOC communities across Chicago.

Follow us to stay informed, take action, and be part of a movement that refuses to let red lines keep drawing our future.