Redlining" is when a bank refuses to give a mortgage, or a government refuses to back a mortgage, to someone because they live in an area deemed to be a poor financial risk. In the United States, this term came to be in the Great Depression when the US government took over responsibility of backing mortgages – but only in areas deemed sufficiently low-risk. In practice, “sufficiently low-risk” meant mostly-white or all-white neighborhoods.
Redlining was a tool of racial segregation and separation. If a family cannot purchase a home than that family cannot acquire capital on that capital to the next generation. The family’s money is spent on rent, the value of which disappears to the landlord, instead of a mortgage, the value of which stays with the family. Redlining hurts families for multiple generations.
Here is the map that delineated where mortgages would be given in Seattle, in Washington state. You can literally see the red areas in the map.