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Institutional racism (also known as institutionalized racism) is a form of racism expressed in the practice of social and political institutions.Institutional racism is also racism by individuals or informal social groups, governed by behavioral norms that support racist thinking and foment active racism.Another difficulty in reducing institutionalized racism is that there is no sole, true identifiable perpetrator.When racism is built into the institution, it emerges as the collective action of the population. Jones postulates three major types of racism: personally mediated, internalized, and institutionalized.Persistent negative stereotypes fuel institutional racism, and influence interpersonal relations.Racial stereotyping contributes to patterns of racial residential segregation and redlining, and shape views about crime, crime policy, and welfare policy, especially if the contextual information is stereotype-consistent. (including local levies and bonds) and the quality of teachers, which are often correlated with property values: rich neighborhoods are more likely to be more 'white' and to have better teachers and more money for education, even in public schools.It can be seen or detected in processes, attitudes and behaviour which amount to discrimination through unwitting prejudice, ignorance, thoughtlessness and racist stereotyping which disadvantage minority ethnic people." The concept of institutional racism re-emerged in political discourse in the late and mid 1990s after a long hiatus, but has remained a contested concept that has been critiqued by multiple constituencies.

Some sociological Institutional racism in the housing sector can be seen as early as the 1930s with the Home Owners' Loan Corporation.When the differential access becomes integral to institutions, it becomes common practice, making it difficult to rectify.Eventually, this racism dominates public bodies, private corporations, public and private universities, and is reinforced by the actions of conformists and newcomers.Poor consumers are left with the option of traveling to middle-income neighborhoods, or spending more for less.The racial segregation and disparities in wealth between white and black people include legacies of historical policies.

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