Housing, Dollars & Racism

One of the recurring themes of thedigitalquad is the intersection of academic scholarship and the “real” world. Academic presses may not sell all that many books, but without them – and the hard work of scholars and faculty across higher education – we would, in many ways, be clueless.

Why is so much of American housing segregated by race? It is a vitally important question – for equity, for justice, and for our basic democracy. One approach and answer to that question, effectively presented and argued in Keeanga-Yamahhta Taylor’s impressive work, Race for Profit: How Banks and the Real Estate Industry Undermined Black Homeownership, stands out. “The practice of housing discrimination and residential segregation is so powerful because it has purpose,” she writes, emphasizing that “the further white people are from Black people within a metropolitan area the more value is imbued in their housing.” The book makes clear, drawing on history, policy and economics, the mutually reinforcing intersection of capitalism and racism from the 1960s until today.

Taylor is a professor at Princeton University. She’s written other academic books and also for the popular media, describing herself as a scholar, writer and activist. Those threads are visible in Race for Profit, which is presented with clarity, care and a compelling sense of outrage. The book received numerous awards, including being named a Pulitzer Prize finalist and a National Book Award long list. It is very well done history with immediate relevance.

The focus of Race for Profit is the 1960s and 1970s, when rules and policies regarding housing support and finance changed at the federal level. Redlining, the practice that segregated communities by race and risk, tremendously disadvantaged Black communities and was banned in the 1968 Fair Housing Act. Concurrently, there was a significant shift away from public housing and towards a collaborative relationship between public and private sectors. Taylor shows how the US housing market, for a very long time, has baked into its thinking strongly held ideas of what constitutes “good” or “bad” housing. These are consistently based on property values and the whiteness of a neighborhood. Consequently, when federal money and policy turned to private and market forces to develop affordable housing, racism and segregation increased. As she puts it, “the interests of real estate inevitably meant that the racial practices at the very heart of real estate and mortgage lending practices were then grafted onto public policy.”

Race for Profit has a chronological structure, beginning by setting the context for the passage and implementation of the Housing and Urban Development Act of 1968. The nation’s cities were suffering from significant violence and unrest. Civil rights are how traditional history often frames the time. Taylor highlights the importance of safe and affordable housing towards understanding the period and the unrest. She shows how urban investment and disinvestment, white flight, and the “Black Tax” set the stage for major political action. Housing, though, was not just a rights issue and cannot be analyzed though that lens alone. It is just as much a business, an economic sector with powerful entrenched interests, forces that shaped the nature and context of housing law, policy and practice. Many politicians welcomed the relationship, as big government was politically unstable as President Johnson wrestled with the Vietnam War. The Joint Committee on Urban Problems (JCUP), formed in 1967 and represented through leadership in the insurance industry, was a key voice as officials wrestled with how cities should be rebuilt and what was appropriate legislation. It may be a surprise to some that the insurance industry is a major player in housing. Metropolitan Life Insurance was the nation’s largest landlord in the 1960s. Metropolitan Life was also in the courts, the public eye, and the target of civil rights groups as many of their large rental units in cities were segregated. Bipartisan legislation that was received with enthusiasm by cities and the Black community, the HUD Act offered a comprehensive plan that was supposed to provide public and private benefit.

That was the legislative promise. The reality, especially as implemented under President Nixon, was markedly different. The administration moved away from desegregation to “economic integration,” blunting the impact of HUD and appeasing local communities and entrenched interests. Most vividly, the federal government refused to pressure local housing to comply with the goals of racial integration. Taylor’s detailed account of Michigan Governor George Romney‘s appointment and tenure as Nixon’s Secretary of Housing and Urban Development highlights the limits of liberal policy and practice, particularly when it came to urban renewal. Millions upon millions were spent. Integration did not take place and affordable housing, especially for Black Americans living in cities, did not increase. The push was for home ownership. Many made money along the way, but ordinary Americans seeking a decent and affordable place to live were not the primary recipients. In fact, as money for renovations and housing support increased, so, too, did unscrupulous practices. These were reported and amplified in the press, giving critics of federal support for housing ammunition. Shady appraisers, developers, mortgage brokers, banks and realtors worked in tandem to profit in the environment, often leaving unsophisticated first-time home buyers with debt and mounting problems. Reforms came late, if all, and usually in response to a problem cited in the press. HUD did not enforce fair housing consistently or credibly. This was no impediment to Nixon’s reelection. By 1973, with the threat of urban violence decreasing, a “victory” was declared and federal funding for affordable housing ceased.

Taylor moves quickly over the Ford, Carter and Reagan years, with her primary points well-established. Federal funding to promote home ownership enriched entrenched interests without significantly aiding poor or Black Americans. Home ownership on its own is no cure for racism, segregation or income gaps. And without major changes, home ownership can exacerbate these problems. Taylor is direct. “There has not been an instance in the last 100 years when then housing market has operated fairly, without racial discrimination. From racial zoning to restricted covenants to LICs to FHA-backed mortgages to the subprime mortgage loan, the U.S. housing industry has sought to exploit and financial benefit from the public perception of racial difference.”

Race for Profit is history with legs. We are living with its legacy today as housing and segregation are ever present. The book is carefully researched arguments that force reckoning and render the everyday evils of racism visible. Like an old-school journalist, Keeanga-Yamahhta Taylor follows the money. Why is so much American housing segregated? Because policy and practice support it and profit from it.

David Potash

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