Housing values in American cities still break sharply along racial lines, showing the lingering impact of federal "redlining" in the 1930s, which devalued homes in African-American neighborhoods. The practice was outlawed decades ago, but its effects are still evident. In fact, according to a study published last week by real estate website Zillow, the disparity has grown even worse over the past two decades.

More than 80 years ago, the government determined which neighborhoods it considered risky for federal mortgage loans, outlining the "riskiest" neighborhoods in red. The determining factor was largely race, regardless of the economic status of the residents.

By 1997, homes in formerly redlined areas were worth less than half the value of homes in neighborhoods that had been deemed the "best" for mortgage lending. Over the last two decades that gap has actually widened, according to analysis of home values across the nation.

Median home prices in the communities across the country deemed "best" in the 1930s were about $640,000, or close to two-and-one-half times more than those in redlined communities, where national median price was $276,000 as of 2017.

That gap, according to one housing analyst, shows the nagging legacy of segregation and racist housing policies playing itself out in the modern housing market, despite legislative reforms and booming urban housing markets.

“It's a legacy of segregation and the effect of that legacy on intergenerational poverty," says Gustavo Velasquez, director of the Urban Institute’s Washington-Area Research Initiative and a former assistant secretary for fair housing and equal opportunity at HUD under President Obama. "It takes a long time to overcome what happened 80 years ago.”

In 1934, the federal government began issuing mortgages through the Home Owners’ Loan Corporation. The agency created maps showing where mortgages were the riskiest and areas where those loans were deemed safe bets. Race, not economic well-being, was the deciding factor. “A neighborhood earned a red color if African Americans lived in it, even if it was a solid middle-class neighborhood of single-family homes,” Richard Rothstein wrote in The Color of Law: A Forgotten History of How Our Government Segregated America.

Small businesses and large developers alike steered money to other areas during this period, contributing to the blight of black neighborhoods over the next several decades. Redlining was finally banned in 1968 under the Fair Housing Act.

The Zillow report is the outgrowth of a project undertaken by the University of Richmond Digital Scholarship, which in 2016 stitched together the Home Owners' Loan Corporation maps as part of its Mapping Inequality Project.

Even in today's hottest real estate markets, including Brooklyn and the San Francisco Bay Area, homes in neighborhoods that were labelled the most desirable in the 1930s are still at least twice as valuable today. In Chicago, those homes are almost three times as valuable now.

Prices in smaller cities with hot real estate markets, like Boston and Seattle, show less of a disparity. In Boston, homes in previously redlined neighborhoods were only 10 percent less valuable than those in neighborhoods labeled "best" on the 1930s maps. In Seattle, redlined communities only trailed their counterparts by 4 percent.

Meanwhile, the home-value gap is much wider in some Midwest and Southern cities, which remain more segregated. In Detroit, homes in redlined neighborhoods are worth four times less than those in neighborhoods tagged as prime real estate in the 1930s. In Atlanta, properties in redlined neighborhoods are seven times less valuable.

“Once they were marked in the middle of the century as areas where no one will invest, those areas never recovered.” Velasquez says.

While neighborhood-level redlining no longer exists, black and Latino mortgage applicants are still more likely to be denied the credit necessary to buy a home than whites. Controlling for income, loan amount, and the type of lender, an investigation earlier this year by Reveal from The Center for Investigative Reporting showed discriminatory lending practices were prevalent in 61 metropolitan areas across the country.

Still, Velasquez believes increased integration of the urban core will eventually close the home-values race gap. Cities are running out of real estate to develop, and the demand for housing close to work and transit doesn’t show signs of slowing down, he says. He points to Washington, D.C., where affluent home buyers have been pushing east into historically black and poor neighborhoods. Those buyers are being driven by price and Velasquez believes development and investment will follow.

“It make take another two or three generations for those redlined neighborhoods to finally catch up,” he says.