T

he history of racism in the United States housing market, including the systemic exclusion and discrimination that has helped sanction the legal separation of Black and whites, has been well-documented by social scientists for nearly a century. Urban historians have highlighted the ways in which zoning by-laws, covenants, and racial discrimination in home financing resulted in the degeneration of America’s urban core, where a vast majority of African Americans reside. These practices and policies led to massive overcrowding, disinvestment, and punitive policies which helped to manufacture the urban housing crisis of the 1950s and 1960s. These policies were the cornerstone of state-sponsored racism and the subsequent development of segregated landscapes across the country.

Keeanga-Yamahtta Taylor’s monograph, Race for Profit: How Banks and the Real Estate Industry Undermined Black Ownership, extends the established wisdom by focusing particularly on how race has been utilized throughout the history of the American housing market to violently exploit and extract value from Black communities. To do this, Taylor furnishes readers with a meticulous account of the myriad ways private influence from the real estate sector along with the support of government entities helped to re-engineer key housing programs to extract profit from the very people they were designed to help. At the centre of this work, Taylor explains how African-American people went from being redlined and not privy to any home loans, to becoming the primary target of high-risk mortgage investments. She outlines the epic failure of Former US President Lyndon Johnson’s Great Society initiative, which the Nixon administration used as evidence that government was the problem in the housing crisis, and that a market-based solution was required to redress the growing poverty issues in urban space. Taylor demonstrates how racism has been consistently mobilized by both the public and private sectors to exclude African Americans from the benefits of homeownership and how approaches like Nixon’s new Federalism helped to reproduce and reshape racial inequalities.  

Race for Profit is a well-constructed methodical text that explores the political history of the American metropolis and makes important contributions to debates on predatory lending and housing discrimination. Taylor opens the book with a brief introductory chapter that delves into the premise of her main arguments regarding the shift in U.S. housing policies during the 1960s that sought to eradicate and replace the discriminatory practice of redlining for approaches designed to support Black homeownership. The rollout of this anti-racist policy agenda, Taylor explains, was saturated with problems from its inception, leading her to denote the reformed housing policies as “predatory inclusion.” Predatory inclusion, Taylor argues, is the process of granting “African-American homebuyers’ access to conventional real estate practices and mortgage financing, but on more expensive and comparatively unequal terms” (p. 5).

Taylor’s extensive archival research does an exceptional job of investigating the racialized politics that helped to maintain the resilience of racism and lay the foundations for predacious inclusionary measures which she attributes to a variety of actors, including federal bureaucrats, real estate brokers, developers, appraisers, and members of the insurance industry. To exemplify the endemic nature of racism in America’s housing system, Taylor highlights the history of public-private ventures and the federal government’s continued dependence on them to resolve America’s urban housing problems. Taylor argues that the government’s increasing reliance on these partnerships helped paved the way for the private sector to inject its racial ideologies into vital public policies that govern the access of housing and financing, “including the forgone conclusion that Blacks and other non-whites should be separated from whites to preserve property values” (p. 34). Public-private partnerships, she reveals, were not a new phenomenon that emerged during the 1960s. Rather, they were deployed initially during the 1940s to ease the overcrowding conditions that plagued America’s urban centres. Here, Taylor highlights the insidious involvement of the insurance industry in America’s urban housing system which not only advocated for segregated living, but took advantage of federal loan subsidies to construct housing that Black families could not occupy. Racial discrimination, as Taylor notes, was a highly profitable business strategy because, “exploitative economic transactions made the Black housing market very lucrative for those in a position to extract capital from Black communities” (p. 73).

Part of what makes Taylor’s work an important contribution to our understanding of the operations of racial capitalism is her emphasis on the racial economies of urban spatial structure and in particular, the valorization of white suburbs that relied on the subjugation and degradation of Black urban spaces. In doing so, Taylor supplies readers with a rich and thorough account of the ways in which HUD, members of the real estate industry, and insurance sectors worked in concert to craft predatory inclusionary policies. Taylor points out these inclusionary policies did not eradicate discrimination or racism from the housing market, but rather functioned to pacify Black people in order to exploit them even further.  

Taylor opens the book with a useful overview of this history. In the first two chapters of the book, Taylor examines the racialized history of the US real estate market from the mid-1930s until the mid-1970s, and the key actors that helped shape the cartography of Black urban spaces. Taylor begins her analysis with an examination of key institutions in the private real estate industry and their role in promoting racist ideologies about race and property. Here, Taylor adeptly explains how these ideologies about race and property were used to exclude Black households from FHA housing programs that made homeownership easily accessible for white families, and that segregation was vitally necessary to protect their investments. In examining the economic subordination of Black spaces, Taylor begins to demonstrate how and when private entities begin to infiltrate public policy to create financially advantageous positions in America’s housing system. Through her analysis of racially discriminatory practices of “redlining” and “blockbusting” in Black urban enclaves, readers begin to understand the critical role of race and its deployment by the private real estate sector to extract economic value from deprived Black urban communities. Taylor argues the federal government’s failure to address discrimination enabled these practices to remain unchecked which in turn allowed those in the housing industry to exploit Black communities further. For Taylor, segregation was more than just a tool used to protect the property values of homeowners in white suburbs. It also aided the private sector in creating a captive market for Black people, so they could siphon more wealth from Black renters and home buyers for inferior housing.  

In the second chapter, the crux of Taylor’s main arguments begins to take shape as she examines the response of the urban housing crisis from each administration. She extensively explores Johnson’s Great Society policy initiative to reduce the growing poverty and crime rate in America’s metropoles. Taylor explains how the federal government began to realize it could no longer neglect Black urban communities and that an immediate solution was needed to stem the urban crisis. Johnson, however, believed government alone could not rectify the problems of urban life and that private industry was essential to assembling his Great Society. By examining Johnson’s domestic policy program, Taylor’s analysis begins to unearth the government’s increasing reliance on private enterprises and how they come to insert their influence and shape various policy programs designed to improve the lived conditions of Black people. Here, Taylor argues that private homeownership becomes a centerpiece of the urban policy agenda to quell the urban rebellion and address the myriad of issues plaguing Black urban spaces. The Johnson administration was convinced that a public-private partnership was the way forward to address the urban crisis. Taylor points to the changes in the discourse about Black people, which increasingly emphasized the need to revitalize blighted communities. However, Taylor’s analysis reveals the shift in tone was about the new ventures and emerging profitable opportunities these investments would create for the private sector. Taylor argues that subsidies were used not just to encourage investments in distressed neighbourhoods, but were essential to securing profitability because private entities “…wanted no risk, just the profit derived from investing there” (p. 65).

As part of her inquiry into the government’s response to the urban crisis, Taylor examines the complex history of public-private partnerships and its disingenuous efforts to resolve the urban housing crisis. 

Here, Taylor sheds light on the discriminatory practices of members of the insurance industry who received millions in tax breaks, subsidies, and government-backed financial guarantees for their investments in the public housing stock in New York City. However, Taylor notes the subsidies earmarked to assist Black households were instead used to construct homes they were not permitted to occupy. Taylor notes this was largely because companies like MetLife demanded greater autonomy of their investments and their right to discriminate against Black households. It is here where Taylor demonstrates how private enterprises were able to capitalize on the poor enforcement of anti-discrimination regulations to augment profits while reinforcing their racist ideologies around race and risk. Taylor’s analysis reveals the discriminatory practices of insurance entities not only went unchallenged by the federal government, but their involvement was trumpeted as the key to rectifying the housing problems in Black communities.

In chapters 3 and 4, Taylor also does a phenomenal job in succinctly illustrating how federal bureaucrats invoked fear in the minds of corporate America to persuade the private sector of their moral duty to respond to the urban crisis. Taylor sheds light on this argument by highlighting former secretary of HUD George Romney’s portrayal of the social unrest in cities, which he characterized as communist-like and catastrophic. These illustrations helped to legitimize the social unrest in urban spaces as a viable threat to commerce in America. Taylor explains this sprung both the public and private sector further into action, but also opened the door for Nixon’s “New Federalism” domestic policy program which ‘unchained market forces’ to resolve societal problems. In the text, Taylor engages the logic of racial liberalism promulgated by Romney, who along with other HUD officials advocated for the end of discriminatory practices such as redlining.

Taylor effectively demonstrates the limitation of postwar racial liberalism through the failures of the various housing programs that were designed to improve the quality of housing and neighbourhood choice available to Black people. In illustrating this failure, Taylor highlights the housing programs that Romney supervised while Secretary of HUD, which were deeply entangled in controversy over its mismanagement and outright fraud. Taylor explains how a key element to the programs’ failure stemmed from intense lobbying by those in the housing industry, who for decades have been reliant on racially discriminatory practices to maintain segregated landscapes, especially in white suburbs. The housing industry’s influence over the priorities of the housing programs were particularly evident during its infancy stage where industry officials voiced their support for the inclusion of existing homes. Taylor notes that industry officials supported the eligibility of existing homes because it provided additional opportunities for them to extract more profit from Black people in the short-term. Consequently, this decision led to some unscrupulous practices by real estate agents, appraisers, and HUD officials, which caused Black home seekers to be pressured into purchasing dilapidated homes that in some cases had leaky roofs, electrical and plumbing deficiencies, and inadequate heating. Taylor reminds readers that these decrepit conditions were not solely borne out of racism by policymakers and private enterprises, but, in her insistence on a racial capitalist’s lens, this was centrally about accumulation. 

Part of what makes this monograph so special is its robust attention to details to help readers understand the historical working of race in America’s real estate market. This was quite evident in Taylor’s examination of the widespread racism that was infused in the culture at HUD offices during the 1960s. Despite the differences between public and private sector cultures and practise, Taylor demonstrates that they were almost seamlessly united through an Anti-Black racism, which meant that regardless of the program design or intention, their program implementation was also defined by racism. Taylor notes that the rollout of the housing programs created a hostile environment as some employees were not keen on working with Black people. Taylor details the complaints of some white Federal Housing Administration (FHA) employees who characterized Black people as, “‘underserving’ and ‘lucky’ to get what is offered, no matter the condition” (p. 156).

In detailing the office culture, Taylor revealed how the change in clientele had a significant impact on office morale, where some employees were no longer fulfilling their duties, which in turn, hindered the success of the housing programs. For example, Taylor’s investigation showed the utter breakdown of the FHA operations, as employees were no longer following protocol to verify the structural soundness of the homes they insured. Some employees lamented that, “it is the responsibility of every purchaser to determine that the property will meet his needs and that he will satisfy himself as to the condition of the property” (p. 157).  

In documenting the bad attitudes of disgruntled employees, Taylor was able to effectively convey one of the many reasons why these housing programs were destined to fail. Taylor was also able to effectively demonstrate how those in the private real estate industry were able to capitalize on the employees’ unwavering racist resentments towards Black people to enable their capitalist exploitative project. For instance, to secure the highest possible loan for purchase, Taylor explains that mortgage companies often bribed FHA employees to approve inflated values on homes that were in obvious disrepair. As a result, FHA appraisers were highly motivated to inflate the cost of the home or ignore structural or functional deficiencies in order to assist brokers and agents to secure larger commissions. The ambitious goals for the program compounded by Nixon’s stringent budgetary cuts towards domestic spending, helped to streamline the sale of substandard housing, as the federal government relied on unscrupulous real estate agents who were subcontracted as fee appraisers to cover the staffing shortfalls to meet the demands of the housing programs. Taylor’s description of fee appraisers revealed the predatory nature of their work as they were typically compensated per appraisal. Taylor argued this further incentivized staff to produce appraisals in large volume.  

Taylor’s monograph provides detailed and nuanced attention to the housing problems during the Civil Rights era. During the late 1960s, Black families on welfare were steered into homeownership to meet the federal government’s ambitious target of obtaining occupancy for 600,000 low-income housing units. Although these families were able to become homeowners, Taylor, reminds readers that it was far from an improvement from substandard conditions. Taylor presents a compelling argument to suggest these Black homeowners were a means to an end for those in the private real estate market to accumulate more profits. Here, Taylor does a remarkable job of demonstrating how this new economic arrangement was punctuated by a modified racial logic. The federal government helped to uphold long standing beliefs about race and property by offering loan guarantees to incentivize lenders not to exclude Black borrowers. The use of loan guarantees in Black urban spaces made Black borrowers profitable, but also facilitated the development of new alliances between members of the private real estate sector and government entities that in turn further exacerbated the economic exploitation of Black people. In cases where homes should have been condemned, they were instead repositioned and sold to prospective Black homebuyers desperately trying to escape their deteriorated living conditions. When it came time for these homeowners to address costly unplanned repairs to the home most if not all were unable to do so because they could not afford to pay their monthly mortgage and other household living expenses. As a result, some homeowners neglected to pay their mortgage and their homes were foreclosed, leaving them without a home and financially worse off than they were prior to homeownership.

In the final chapters of the book, Taylor explores the massive failure of the housing programs which caused nearly 400 homes to be foreclosed upon each month between 1968 to 1971. Taylor’s examination of the fallout dissects the media coverage of the crisis. On the one hand, some media outlets sought to publicly expose the fraud and corruption in the application of the low-income homeownership programs. While others were keen to blame the participants for the failure of the housing programs by casting them as “lazy” and “unsophisticated buyers” that are devoid of any knowledge of how to care for a home. This narrative, according to Taylor, served an important purpose for Romney and the FHA because it helped to vindicate them as wilful participants in the sale of substandard homes. Furthermore, this permitted Romney to restrict the participation of Black mothers on welfare to help amplify his point that, “we don’t have a housing problem…we have a people problem” (p. 214). Interestingly, however, Taylor explains the failure of the housing programs spelled an all-out retreat of government from anti-poverty initiatives towards revanchist policies against economically disenfranchised people (Smith, 1996).

In the concluding chapter, Taylor briefly outlines the tumultuous history of homeownership for Black people, which has seldom produced the benefits that it has for their white counterparts. Taylor has shown that each policy iteration to extend homeownership to Black people has helped to confirm racist assumptions about their capacity to be successful homeowners. Taylor points to the deteriorated conditions of Black urban communities that are often cited as evidence of the threat they pose to neighbouring property values, rather than the extractive and exploitative practices that produced these circumstances. In a brief discussion of the contemporary foreclosure crisis in the last paragraph of the book, Taylor demonstrates the need for more and rigorous scholarship that addresses the connections to this much longer history of dispossession that African Americans have experienced in accessing homeownership in the United States. Left unanswered in the text are questions on how contemporary practices of dispossessions are related those in the late 1960s, and specifically how the reliance on market mechanisms and their facilitation through public policy are a direct echo in the present of this earlier moment.  In leaving these questions hanging, Race for Profit misses an opportunity to offer a more explicit political economic critique of our present crisis, and so too a potential roadmap for how to dismantle these predacious configurations for inclusion in the private real estate industry and build something different. This monograph would have benefited from a chapter on the subprime mortgage crisis in order to broaden the readers’ understanding of some of the nuances in this violent cycle of dispossession for Black people today. For example, subsidies in the form of federal loan guarantees were used in both instances to incentivize lending in Black communities, which opened the door to predatory practices informed by racist assumptions. Similarly, partnerships were formed with various actors and entities in the private real estate industry to exploit prospective Black homeowners more effectively and increase their profitability.

Race for Profit is a well-researched monograph that not only makes significant contributions to debates on race and housing, but also serves as an insightful warning of the increasing reliance on market-led solutions to resolve social inequalities in our present. Taylor’s thought-provoking book does an excellent job of providing readers with a robust account of the exploitative history of homeownership for Black people and the failed policies that have exacerbated the housing and wealth inequalities in America, rather than alleviate them. As such, Race for Profit offers an important reminder to scholars, advocates, and contemporary housing and racial justice organizers of the need to begin imagining a world outside of capitalist land markets. This text also raises questions that extend beyond its pages, perhaps most importantly, what it would mean to refuse the reproduction of the current system by refusing to ask for more inclusion? Where else might energy for housing and racial justice be invested, and what might it build?

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References:

Smith, N. (1996). The new urban frontier : gentrification and the revanchist city. London; New York: Routledge.