Race for Profit: How Banks and the Real Estate Industry Undermined Black Homeownership | Keeanga-Yamahtta Taylor

Keeanga-Yamahtta Taylor | Imagem: KQED

In the context of a COVID-19 world, housing and living standard inequities are a phenomenon that have surely been exacerbated. The conditions created by global pandemic have undoubtedly contributed further to greater poverty in many areas—from housing, to jobs, to access to food security and water resources (informed by colonial legacies in North America especially). Any discussion of histories related to global or regional housing must be considered from this sort of lens. In this sense, the recent book Race for Profit: How Banks and the Real Estate Industry Undermined Black Homeownership, published not long before the pandemic began in 2020 offers prescient analysis.

In Race for Profit Keeanga-Yamahtta Taylor argues that “unprecedented public-private partnership in the production of low-income housing tethered the HUD [Department of Housing and Urban Development] and the FHA [Federal Housing Administration] to real estate brokers, mortgage bankers, and homebuilders” (p.4). The historiographical focus rests on a critique of the “declensional framing” of “urban crisis” through the late 1960s and 1970s, which Taylor suggests, “belies the dynamic and innovative methods of financing generated to develop the urban housing market” (p.5). As she forcefully argues:

[f]ar from being a static site of dilapidation and ruin, the urban core was becoming an attractive place of unparalleled opportunity, a new frontier of economic investment and extraction for the real estate and banking industries. The race for profit in the 1970s transformed decaying urban space into what one U.S. senator described as a ‘golden ghetto’ where profits for banks and real estate brokers were never ending, while shattered credit and ruined neighborhoods were all that remained for African Americans who lived there (p.4).

This, in essence, was a form of “predatory inclusion” which indicates the ways Black Americans, and perhaps other Americans on the margins (whether poor or from racialized and marginalized communities) were granted limited “access to conventional real estate practices and mortgage financing” but in ways that were “more expensive and comparatively unequal terms” (p.5). This was arguably U.S.-centered racial capitalism at its height of power and influence in the mid-late 20th century. It demonstrated the ways America’s acquisitive colonial-settler society had shifted somewhat in response to mid-20th century civil rights and social movement reforms from below in response to a flexible welfare state that had been in place since at least World War II.

By the 1970s, openings in these areas of social reform were being quickly circumscribed for the benefit of private gain above all else. The public-private partnerships Taylor outlines in this volume demonstrate how the “real estate industry made it resistant to change in adhering to new fair housing legislation. The benignly named ‘public-private partnership’ obscured the ways that the federal government became complicit with private sector practices that promoted residential segregation and racial discrimination” (p.6). In many ways, the 1970s represent a major retrenchment away from the social equity that might have been realized for subject populations in terms of living arrangements. Social movements from that time advocating equality were circumscribed in their efforts for substantial change to redress the worst inequities caused by global capitalism. Race for Profit demonstrates the limits of racial liberalism even more than the perniciousness of racism and racial formation from that time over the long-20th century—a topic that has long been studied by scholars such as Michael Omi, Howard Winant, and many other astute observers.(1) As Taylor points out, the civil rights reforms of the mid-1960s, embodied the racial liberalism of that era that social movements pushed to embolden for more radical ends – like fuller forms of social equality and more radical forms of multicultural desegregation. Taylor writes: “[t]he 1964 Civil Rights Act banned discrimination in any federally subsidized housing with an important exception: homes purchased with an FHA-backed loan” (p.14). Thus, loopholes to exploit and undermine civil rights reform existed very clearly in the ways private-sector industries profited from the ways any sorts of social changes were implemented. One could suggest there were parallels here as well in the ways the prison-industrial complex expanded from this period – phenomena recently studied by scholars such as Elizabeth Hinton and Simon Balto.(2)

If we take the U.S. model, outlined in Taylor’s study as emblematic, development and capitalism went hand-in-hand and comprised a seemingly unstoppable social and economic force. Taylor also conveys an important understanding for how race and racism impact(ed) these capitalist paradigms, that the United States especially has “been structured around a scaffolding of racial knowledge that presumed insight into the speculative elements of ‘good housing’ and ‘good neighborhoods,’ which could then be actualized through ascending property values” (p.9). Indeed, a powerful element of Taylor’s narrative is the long history outlined in her work which connects the racial and racist logics of American urban housing practices in broader and longer chronologies of racial inequality. This reviewer wonders how far can Taylor’s logic and methods be applied to more international coordinates and comparative case studies? Do the racial inequities of America’s post mid-20th century social policies apply to the rest of the world, to other “western” nations or perhaps to places in the global South? Recent scholarship by the likes of Mustafa Dikec, Mike Davis, and others suggests it could.(3) https://reviews.history.ac.uk/review/2462 – f3

Race for Profit presents six insightful chapters that unpack much of Taylor’s justified hesitation with both racial liberalism and her salient observations of how racism has been entrenched in the American urban housing system historically through to the present. Early chapters chart the history of racist housing practices, from restrictive covenants through contract buying schemes by the 1960s and 1970s. A feature of these changing restrictive mechanisms were the ways urban housing policies and practices, even those that promoted ostensibly racial egalitarian forms of desegregation, did little to redress racist outcomes over time. A particular culprit in all of this was not just the housing, real estate, and banking industries, but also the federal government, which remained largely on side with such private entities over the course of the mid-late 20th century. As Taylor notes, “federal regulators refused to enforce the law, claiming that the market alone could ultimately resolve the housing issues for African Americans” (p.46). The fact federal regulators refused largely to enforce civil rights laws ultimately made these reforms useless in the face of market prerogatives over the long term. In the end, one could ask, what is the point of government regulation in any context on such matters if it does not actually enforce regulation?

Taylor notes how the “centrality of homeownership to the American economy pushed the [Federal Housing Authority] to maintain segregation while also expanding opportunities for African Americans to become homeowners” (p.37). In this sense the spread of suburban growth came largely at the expense and detriment of African American urban homebuyers and residents. As such, Taylor further observes that “[t]he deterioration of urban neighborhoods was not simply a side effect of suburbanization or ‘unintended consequences”; the two were dialectically connected” (p.37). Indeed, America’s housing market was inherently racially segregated and multi or two-tiered.

Race for Profit is particularly lucid in explaining the racism that impacted Black single mothers as ostensibly liberal housing policies were implemented by successive federal governments moving from the Johnson administration in the 1960s through the administration of Richard Nixon in the early 1970s. Chapter 5 of the book is effective in this regard for the ways it depicts the challenges Black single mothers faced raising a family with low income and little government support. As Taylor writes, the “crises” that the HUD was supposedly addressing, “was construed as the problems of program participants who were disproportionately Black, female, and in some cases, receiving various forms of public assistance or welfare” (p.169). Rather than questioning the veracity of a for-profit housing industry focused on predatory inclusion and profit, federal housing policies never questioned the prerogatives of private homeownership and how these forces shaped citizenship in America. As Taylor writes, “the questions turned to who was capable and responsible enough to assume homeownership. Poor Black families—led overwhelmingly by Black women—were easy targets for blame in this scenario” (p.170). People profiled throughout the volume, like Janice Johnson, a single Black mother from Philadelphia engaged in these conflicted programs for homeownership and often faced more obstacles than they could ever anticipate to merely survive. Such recipients of federal “aid” came to symbolize for many Reagan “Democrats” and Republicans in later years the supposed “underserving” poor—based largely on racist stereotypes that did much to embolden the rightward shift in American politics through the late 20th century and into the early decades of the 21st century. One could recall Ronald Reagan’s racist fear mongering about “welfare queens” who were supposedly taking advantage of public assistance and programs over the same era.

Another very compelling dimension of Race for Profit is the nuanced assessment Taylor presents of racial liberalism itself and its various manifestations in federal policies on either side of the bipartisan leger when it came to addressing urban poverty. Certainly, it might be easy to see the failures of Democrat Lyndon B. Johnson’s so-called “war on poverty” in light of the racist manipulations of HUD outlined in Race for Profit and the ongoing urban poverty that prevailed in America through the 1970s to condemn the Republicans in equal terms. Of particular interest here, however, was Taylor’s treatment of George Romney, the long-time Republican governor of Michigan who in 1969 became the third secretary of the HUD after Nixon became president. A study of Romney’s secretariat of HUD is a very helpful focus for understanding both continuities and ruptures in this period for how white elites contended with the so-called “urban crisis” of the era. Romney aligned with Nixon at the outset of his administration in their critique of Democrat spending under Johnson for social programs. As Taylor writes: “[b]oth Nixon and Romney believed that the constant promise of new programs and more federal spending was raising Black expectations unreasonably high and, thus, was fuelling the unrest in the nation’s cities” (p.99). Taylor continues: “[t]he New Federalists, led by Nixon, did not believe that there was no role for the state, but that it had to be reconceived after Johnson. HUD’s new housing programs presented an opportunity for the government to apply free market principles already in place while experimenting with New Federalist approaches to their execution” (p.100). In this sense, we can see the early attacks on the New Deal welfare state, but also the ways the new conservative consensus in America had to give ground to the prevailing forms of racial liberalism (conflicted as they were) for implementing government policies.

Ironically, Romney’s engagement with integration controversies as part of his directorship eventually forced the hand of the Nixon administration to show its true colors and to try and undermine Romney’s authority on federal housing policy and privilege through the establishment of the Council on Domestic Affairs (p.121). Ultimately, Nixon’s housing policies have the dubious distinction of openly affirming racial segregation by privileging the role of “individual choice” and “freedom” in the form of so-called colorblind racism for determining neighborhood developments in urban and suburban America. As Nixon himself said, “[a]n open society does not need to be homogeneous, or even fully integrated” (p.125). Notwithstanding Nixon’s overtures to racial liberals of the period, this statement was a fairly open expression of racism and implied white supremacy if there ever was.

In the end, Race for Profit demonstrates quite emphatically how the history of homeownership in urban America has been “experienced unevenly” (p.259). As Taylor indicates, “70 percent of whites own a home, compared with 43 percent of African Americans” (p.259). These stark statistics are damning present legacies of this pecuniary past. Racism and inequality continue to be primary indicators of how real estate and development industries profit off-of marginalized communities as America adjusts to the new realities of 21st century life in a largely post-industrial so-called “first world.” The imperatives of a for profit real estate industry which was at the center of American conceptions of the so-called “good-life” in the 20th century was exclusive to the core. Taylor’s work demonstrates, in the end, that a more equitable future will be one that depends on a fundamental re-conception of homeownership wherein homes are not viewed as “commodities” and where homeownership is not simply “the fulfillment and meaning of citizenship” (p.262). No doubt this work will intersect with the research of scholars of urban studies worldwide, interested in the disparities of material circumstances in a transnational context as well as between the global North and South. Race for Profit should provide a critical point of clarification for any future studies that seek to understand the ways liberal social policies of recent eras have, on the one-hand, purported to address inequity while simultaneously promoting “predatory” forms of inclusion and discrimination in the name of “freedom” and “democracy.”

Notes

1. Michael Omi and Howard Winant, Racial Formation in the United States (New York: Routledge, 2014).Back to (1) https://reviews.history.ac.uk/review/2462 – t1
2. Elizabeth Hinton, From the War on Poverty to the War on Crime The Making of Mass Incarceration in America (Cambridge: Harvard University Press, 2017); Simon Balto, Occupied Territory Policing Black Chicago from Red Summer to Black Power (Chapel Hill: University of North Carolina Press, 2019).Back to (2)  https://reviews.history.ac.uk/review/2462 – t2 
3. Mustafa Dikec, Urban Rage: The Revolt of the Excluded (New Haven: Yale University Press, 2018); Mike Davis, Planet of Slums (New York: Verso, 2017).Back to (3) https://reviews.history.ac.uk/review/2462 – t3

Resenhista

Ian Rocksborough-Smith – University of the Fraser Valley.

Referências desta Resenha

TAYLOR, Keeanga-Yamahtta. Race for Profit: How Banks and the Real Estate Industry Undermined Black Homeownership. Chapel Hill, NC: University of North Carolina Press, 2021. Resenha de: ROCKSBOROUGH-SMITH, Ian. Reviews in History. Londres, n. 2462, jun. 2022. Acessar publicação original [DR]