Final answer:
Redlining causes economic issues like loss of essential services and companies avoiding investment in poorer neighborhoods. However, a city's tax base typically decreases, not increases, in these areas as a result of redlining. Therefore, the option stating that the city's tax base begins to increase is the correct answer to the question.
Explanation:
Understanding Redlining and Its Economic Impact
Redlining is a practice where banks and insurers systematically deny services to residents in certain neighborhoods, often based on racial or economic factors. The economic problems resulting from redlining can be significant and manifest in various ways.
- Residents may lose essential services. When a neighborhood is redlined, the lack of investment can lead to decreased funding and support for critical infrastructure, education, and public services.
- Companies refuse to invest in poorer neighborhoods. This is a common outcome of redlining, as businesses often steer clear away from areas that they view as high-risk, further exacerbating economic decline.
- Cities may place services in nice areas. This highlights the disparity created by redlining, as essential amenities may be concentrated in wealthier areas.
However, one of the options states, The city's tax base begins to increase. This is not accurate, as redlining typically leads to a diminished tax base due to reduced property values and lack of development in the affected neighborhoods.
Conclusion
In conclusion, the correct answer is that the city's tax base begins to increase, as it contradicts the effects of redlining.
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