“He sits upon the landlord’s
the needle of the nation
sucking his soul.”
Taylor, Keeanga-Yamahtta. Race for Profit: How Banks and the Real Estate Industry Undermined Black Homeownership. Chapel Hill, NC: The University of North Carolina Press, 2019.
By Eric Michael Rhodes
When Michael Bloomberg blamed the end of redlining for the financial crisis, he was echoing an enduring narrative about African American borrowers: one as familiar as it is erroneous. Keeanga-Yamahtta Taylor disabuses readers of this fallacy in Race for Profit: How Banks and the Real Estate Industry Undermined Black Homeownership. She shows that the increasingly financialized housing and mortgage industries have been profiting from Black homeowners for fifty years—with the aid of the government. Race for Profit historicizes what all landlords and low-income people know—what Matthew Desmond recently put into writing: “there is a lot of money to be made off the poor.”
Taylor’s task in Race for Profit is to demonstrate how, during the 1970s, public-private partnerships in the provision of subsidized housing brought the Department of Housing and Urban Development (HUD) into league with “real estate brokers, mortgage bankers, and homebuilders.” Taylor reimagines neighborhoods in “urban crisis” as sites not only of destitution but of extraction for the housing industry. Risk of foreclosure transformed from “a reason for exclusion into an incentive for inclusion” as the Federal Housing Administration (FHA) promised to reimburse lenders for foreclosures. Black women especially were targeted for “predatory inclusion” in this new urban housing market as formerly redlined neighborhoods were flooded with credit. The federal government was unwilling to regulate the industry it colluded with, so fair housing was swapped for profiteering from the “uneven development” intrinsic to racial segregation. As foreclosures dotted the Black inner city, suburban home values (and wealth) soared.
Weaving newspaper accounts and government documents into the existing historiography, Taylor demonstrates how the suburban and urban housing markets were not distinct but profoundly interconnected through “segrenomics”—the “business of profiting…from high levels of racial and economic segregation.” Contending that rent gouging in redlined neighborhoods amounted to a “Black tax,” Taylor shows that it was not poverty that led to segregation but the reverse. High suburban home values were propped up at the direct expense of Black urbanites.
The housing programs of the Great Society did not engender “big government” but rather big business—particularly the housing and insurance industries. The Johnson administration, buffeted by the riots and by critics of its expensive wars on poverty and Vietnam, turned to business to “unleash capital into urban areas while not…adding to the deficit.” The housing industry sought to recast itself as a “vehicle for social change” while the government “bribe[ed] business into the slums” by eliminating risk and insuring mortgages in Black neighborhoods. Private industry profited handsomely from this new urban housing market, as it lobbied for homeownership (rather than low-rent housing) along with lax enforcement of antidiscrimination legislation. The outlawing of redlining did nothing to address the underlying logic of segrenomics; The extension of access to conventional “real estate practices and mortgage financing” was on “more expensive and comparably unequal terms” for Black homebuyers. Taylor’s source base (plucked from the National Archives, HUD, the Library of Congress, presidential libraries, and the Bentley Historical Library) proves her point. The congressional record is full of references to how the housing and insurance industries would capitalize on the housing crisis.
Richard Nixon was elected with a mandate to roll back social spending. Nixon’s HUD Secretary George Romney, a racial liberal who thought that African American inclusion in markets would lead to equality, tried to use the power of the federal government to open up existing housing (Open Communities) and build new subsidized units (Operation Breakthrough) in the suburbs for low-income Black buyers. However, Romney’s programs flew in the face of Nixon’s New Federalist, colorblind, and anti-welfare politics. Nixon undermined Romney: by decentralizing federal authority to localities, doling out no-strings-attached block grants to them; blaming the poor for their station; and slashing new construction budgets. Nixon portrayed segregation as the result of both individual “choice” and race-neutral economic discrimination. This appeal to his “suburban majority” was a fatal blow to fair housing and “facilitated the thriving conditions of predatory inclusion in the existing, urban market.” Taylor locates the emergence of the community development movement in this moment, as “shrinking budgets, declining tax bases,” and behavioralist explanations of the urban crisis legitimized the push to increase homeownership within the inner city rather than expanding African American housing choice in the suburbs. “Separate but equal” was a boon to suburban home values, as segrenomics triumphed once again.
Romney’s 235 housing program provided loans to formerly redlined low-income homebuyers. However, the real estate, construction, appraisal, and mortgage banking industries ultimately used 235 to maintain profitable metropolitan segregation. Brokers steered Black buyers into substandard existing housing in the central city and employed “fast foreclosures” to a handsome profit there, while encouraging whites to move into new 235 units in the suburbs.
Channeling Rhonda Y. Williams, Taylor argues that poor Black women were scapegoated for the structural perversions of HUD programs. Program participants were cast as “undeserving, unprepared, and unsophisticated” and were blamed for the poor condition of central city housing. But they fought back through class-action lawsuits and media appearances. The “dysfunction discourse” of individual pathology was weaponized to serve the right’s revanchist project: rolling back the Great Society. In fact, argues Taylor, it was in the realm of housing policy that revanchism first manifested. All the while, the housing industry cashed federal checks.
By 1973, the economic fallout from stagflation coupled with the relative dearth of urban uprisings gave neoliberals the pretext to further diminish the Keynesian social contract. Nixon’s second term saw HUD’s total abandonment of its promises to create new suburban housing and address segregation. Republicans attacked the very idea that the government had a responsibility to address poverty. The neoliberals’ whipping boy was the “underclass,” an imagined section of society whose individual behavior was responsible for urban decline and even for stagflation.
Housing policy was transformed thereafter. The Housing and Community Development Act of 1974 (HCDA) and Section 8 were concessions to the New Right. In a reversal of HUD’s commitment to bolstering fair housing through categorical grants and subsidizing mortgage insurance to increase the stock of low-income units, the HCDA rather delegated housing funds to localities without inducements to desegregation. Section 8 benefited landlords as it prioritized the conversion of existing private units over new construction. Segregation remained profitable, and the federal government gave up once and for all on offering true equality in housing (and wealth) to African Americans. Segrenomics reigned after redlining. This is history not as change, but continuity over time.
While historians have only adopted the analytical frame of neoliberalism “with some trepidation,” Race for Profit embraces it. Taylor posits a useful definition: more than simple privatization and privatism, neoliberalism is “a political, social, and economic rejection of the social welfare state and the social contract more generally.” She demonstrates well how the state socialized risk while privatizing profit in the realm of housing.
Taylor’s interrogation of neoliberalism is necessary because Race for Profit pushes the periodization of the HUD housing crisis well into the mid-1970s, as the New Right’s hold on federal policy tightened. Picking up the story where Charles Lamb, Matt Lassiter, Kevin Kruse, Christopher Bonastia, Edward Goetz, and Richard Rothstein left off, Race for Profit integrates the intellectual trends of scholars such as Julilly Kohler-Hausmann, Jordan Camp, Michelle Alexander, Elizabeth Hinton, and Kim Phillips-Fein into its analysis of housing during the “Long 1980s.” Race for Profit begins to bridge the eras of redlining, gentrification, and the housing bubble of the aughts.
Taylor tracks the transformation of racial liberalism into racial neoliberalism through the figure of George Romney. This is a significant update to Romney’s legacy. Michael Danielson first portrayed Romney as an ill-fated, tragic crusader worthy of sympathy—as the moderate voice of reason contra Nixon’s brutality—in his canonical Politics of Exclusion (1976). Widely cited along with the reporting of John Herbers (New York Times), Danielson’s simplistic portrait has remained hegemonic within suburban history for forty years. But by following the arch of Romney’s story past Warren, Michigan, Taylor discovers that he came to lament “the legislation that…ended redlining and created homeowning opportunities in the nation’s cities,” continuing: “He publicly questioned poor women’s housemaking skills and described them as ‘unsophisticated.’” Whereas he had advocated the Great Society’s social contract and agreed that “racial discrimination [was] herding men into the ghetto,” by the end of his tenure he contended that “unknowable factors [created] a Black core of the city.” Taylor reminds us that Romney’s (if not Johnson’s) preference had always been for private solutions to public problems.
Race for Profit exposes the false dichotomy at the center of the tired debate between “fair housing” (bringing people to opportunity) and “community development” (bringing opportunity to people). There was no, and is no, “choice to be made between the urgency of repairing the cities and opening up housing options for African Americans beyond the city core.” Making this point, Taylor distinguishes between true housing choice and “choice” as shibboleth used to prop up segrenomics. Finally, Race for Profit presents more evidence that race and class are not easily separable categories and is the most nuanced study of racial capitalism in housing since David Freund’s Colored Property.
What is left out? While Taylor rightly observes that historians have not considered how the economic shifts of the 1970s affected housing (especially for Black borrowers), Race for Profit might have considered the labor market’s relation to the credit markets on which it focuses. In other words, given the space, Taylor might have discussed in more depth how deindustrialization and the decline in wages occasioned by the rise of the service industry made Black borrowers segregated in the inner city particularly susceptible to the depravities of the mortgage industry. If William Julius Wilson’s work influenced Taylor’s thinking, The Truly Disadvantaged does not appear in her bibliography.
Notwithstanding this shortcoming, Taylor’s novel analysis, vivid storytelling, clear argumentation, and encyclopedic mastery of the historiography make it a future classic. The introduction and first chapter will impart to upper-level students an understanding of the major contours of the literature on postwar housing. Policymakers looking to avoid the mistakes of 2008—and those which led to the crisis—would do well to read Race for Profit, too.
Eric Michael Rhodes is a lecturer at the University of Angers where he teaches the history of New York City and documentary film. His research focuses on housing in the rusting Steel Belt of the 1970s. Eric’s writing has appeared in New Jersey Studies and Tropics of Meta. His essays will appear in three forthcoming books: “Who Killed John Crawford?” in The Dayton Anthology (Belt Publishing); “Conducting Decline: The Cleveland Orchestra during the Long 1980s” in Where East Meets (Mid)West: Exploring a Regional Divide (Kent State University Press); and “Midwestern ‘Mobocracy’: Racial and Labor Politics in 1830s Cincinnati” in The Making of the Midwest: Essays on the Formation of Midwestern Identity (Hastings College Press). He is a Reviews Editor at The Metropole. Follow him @EricMichaRhodes.
Featured image (at top): The housing struggle in crisis, National Tenants Organization, Daniel T. Magidson, 1973, Prints and Photographs Division, Library of Congress
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