Race for profit: How banks and the real estate industry undermined black homeownership, by Keeanga-Yamahtta Taylor

Journal of Urban Affairs > Book Review > Race for profit: How banks and the real estate industry undermined black homeownership, by Keeanga-Yamahtta Taylor

Carolina Reid (2021) Race for profit: How banks and the real estate industry undermined black homeownership, by Keeanga-Yamahtta Taylor, Journal of Urban Affairs, 43:6, 922-924, DOI: 10.1080/07352166.2020.1868257

In Race for Profit, Keeanga-Yamahtta Taylor traces a careful and compelling history of efforts to expand access to homeownership across the United States in the aftermath of World War II. Specifically, she focuses on an important inflection point in the history of the Federal Housing Administration (FHA), when the agency shifted from denying access to guaranteed mortgages to Black/African American households (through redlining) to actively encouraging them to become homeowners (for example, through its Section 235 program). Taylor argues that the ensuing system of “predatory inclusion” did little to expand access to homeownership; indeed, it merely served as conduit for banks and other private sector actors to make a profit off of Black households who were confined to segregated neighborhoods with poor quality housing options. In addition, Taylor shows how the failures of the program—which were attributed to individual irresponsibility and government subsidy rather than private malfeasance—laid the foundation for a federal shift toward relying on the private market for housing assistance and “cast doubt further on social welfare as a concept” (p. 249).

The overarching narrative and subject matter of Race for Profit will be familiar to most urban scholars: Taylor’s history tackles the legacy of redlining, the twin forces of suburbanization and urban renewal, the resistance of the federal government to enforcing fair housing laws, and the failure of FHA’s Section 235 program, which led to thousands of foreclosures in largely poor, Black neighborhoods. What makes this book so compelling—and a “must-read” for anyone interested in both urban history and housing policy—is Taylor’s meticulous research into original source material. Taylor’s use of primary sources such as internal policy memos, speeches, legal cases, newspaper articles and advertisements reveal with stunning bluntness the racialized assumptions and flawed theories that shaped the response to the “urban crisis” confronting U.S. cities in the late 1960s and early 1970s.

Three aspects of the book are worth specific mention. First, Taylor is a beautiful and evocative writer, and it is impossible not to be moved by the stories that detail the sheer inhumanity of the housing conditions in segregated Black neighborhoods and the duplicitous practices of private market actors who took advantage of those conditions to make a profit. What is particularly powerful is how Taylor evokes the materiality of racial inequality in the housing market, for example, detailing through first-hand accounts and newspaper stories the fear parents had of rats harming their children as they slept. Rats become the literal embodiment of the urban crisis, with their scratching “the sound you carry with you for the rest of your life. It is something heard by poor people in every poor neighborhood in every city in the nation” (p. 26). Taylor’s focus on Black women is also noteworthy, since their stories and a gender-focused analysis are often excluded from histories of homeownership and mortgage access.

Second, Taylor effectively connects the failure of FHA’s 235 program to the government’s inability to address fair housing issues; indeed, she argues that segregated housing markets created the conditions that made Black households vulnerable to the predatory abuses in the 235 program. Chapter 3, entitled “Forced Integration,” provides a detailed accounting of the “behind the scenes” tribulations of then HUD Secretary George Romney. While Romney came into the office with the goal of using federal power to force cities to remove exclusionary barriers, the Nixon administration quickly undermined any meaningful HUD actions to promote fair housing. What Taylor adds to this history is how Romney himself moved away from structural analyses of racial segregation for why the program failed and instead increasingly placed the blame on Black women and neighborhoods, questioning their “homemaking skills” and describing them as “unsophisticated” (p. 168). By uncovering moments such as these in the archives, Taylor provides unique insights into the ways in which policy-makers often shift the definition or framing of the problem even when they know better, and thereby also constrain the subsequent solutions.

Indeed, the third strength of Race for Profit is its resonance for contemporary urban policy. As I was reading it, I couldn’t help but draw parallels between the housing policy debates in the 1970s and the ones today. While overt discrimination may now be illegal, studies consistently show that Blacks are shown fewer rental and ownership options, are more likely to be denied a mortgage (or are offered a predatory loan product), and experience lower rates of house price appreciation than non-Hispanic Whites. Many of Taylor’s arguments about predatory inclusion seemed as if they could just as easily apply to the 2009 foreclosure crisis. The Black-White homeownership and wealth gaps remain at an all-time high, and Romney’s inability to use his perch in the federal government to combat exclusionary zoning echoes in the halls of the HUD building today, as the Trump administration unraveled the small steps taken by the Obama administration to strengthen the implementation of Affirmatively Furthering Fair Housing law.

Taylor argues that the policy decisions of the 1970s shaped these outcomes by creating a “durable” approach to housing that relies on public-private partnerships. Rather than investing in “the goal of a decent home and a suitable living environment for every American family”1—for example, by establishing the right to housing and a robust, well-funded public housing program—the government pursued a homeownership strategy that relied on the private sector to meet the housing needs of poor, Black households. It is this private sector orientation—and the dynamics of racial capitalism that undergird it—that Taylor is really critiquing in this book. Taylor contends that it wasn’t a “failure of bureaucracy, organizational mismanagement, or malfeasance alone,” but rather the “central role of private institutions that remained vested in a racially segmented housing and mortgage market” that shapes racial housing market inequality (p. 255).

As such, Race for Profit is asking us to interrogate the dominant paradigm in housing policy which continues to rely on public-private partnerships to deliver housing assistance. It’s about much more than a critique of homeownership or down-payment assistance programs; from Housing Choice Vouchers to the Rental Assistance Demonstration (RAD) to the battles over the future of the GSEs, the private sector remains deeply embroiled in public policies designed to expand access to high-quality and affordable housing. Whether we can make this public/private partnership model work—or if in fact it can’t—may be one of the most important questions confronting urban planners and policy-makers in the coming decades. Race for Profit grapples with this question through the lens of racial justice, and through its nuanced analysis, concludes a new paradigm is needed.


1. Housing Act of 1949, Public Law 81–171 (7/15/49)

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