The Age of Predatory Inclusion

A review of Race for Profit: How Banks and the Real Estate Industry Undermined Black Homeownership, by Keeanga-Yamahtta Taylor. 2019, University of North Carolina Press, 368 pp., $30 (Hardcover). Purchase a copy here.

Cover image of Race for Profit, which shows a young black girl sitting on steps.The federal government’s role in perpetuating residential segregation during the 20th century has finally begun to receive greater public attention. Building on decades of work by activists and scholars, recent writings by authors such as Ta-Nehisi Coates and Richard Rothstein have helped inform public understanding of and conversations about the history of government-backed practices like redlining. These policies encouraged white homeownership in suburbs and largely restricted African Americans to deteriorating rental housing in the urban core.

Far less is known, however, about federal housing policy that targeted African Americans after officials ended the practice of redlining in the late 1960s. This is the subject taken up by Keeanga-Yamahtta Taylor’s engrossing and penetrating book, Race for Profit. Taylor chronicles how in the late 1960s and early 1970s, federal officials—eager to quell several consecutive summers of urban uprisings—launched programs that aimed to bring homeownership within reach of poor and working-class African Americans. U.S. Department of Housing and Urban Development (HUD) and Federal Housing Administration (FHA) officials used a variety of incentives such as subventions and mortgage insurance guarantees to entice real estate developers, lenders, and brokers to become partners in programs that would, they hoped, make homeownership affordable to hundreds of thousands of low-income African Americans.    

Taylor—one of this country’s foremost activist-scholars of political change and racial and economic inequality—meticulously documents how these programs were anything but a panacea. Federal officials failed to substantively challenge real estate industry assumptions that African Americans were detrimental to property values or industry practices that exploited low-income residents. The result was a period of what Taylor calls predatory inclusion, in which federal housing policy transformed from practices like redlining that largely excluded Black communities to predatory ones that more explicitly targeted African Americans and did far more to enhance real estate industry profits than to redress residential segregation and housing inequalities.   

The programs Taylor predominantly focuses on existed during a short period between the late 1960s and early 1970s. But her meticulous dissection of both the assumptions and flawed implementations that undermined these policies yield an array of insights about housing policy— and racial capitalism—in the late 20th century. Taylor convincingly argues that blithely partnering with private industry to enact these programs “impaired” government’s ability “to aggressively regulate an industry that had employed racial discrimination in its determined pursuit of insatiable profit as a business principle.” Rather than facilitating access to affordable housing in white suburbs, for instance, the real estate industry overwhelmingly focused on the urban areas to which low-income African Americans had long been restricted. What’s more, the terms on which homeownership opportunities were extended to program recipients were far more expensive and extractive than those available to white suburban homeowners.

Indeed, the homeownership opportunities offered to people desperate to move out of dilapidated housing were often little more than outright swindles. The homes available for purchase—which were appraised and rubber stamped for sale by chummy and corrupt real estate networks—were often in poor shape, leaving purchasers with leaking roofs, missing boilers, flooding basements, and a slew of building code violations they did not have the capital to fix. Indeed, because HUD-FHA guarantees meant the government would pay lenders even in the case of foreclosures, low-income Black people were seen as desirable precisely “because they were poor, desperate, and likely to fall behind on their payments.”

Yet, as default and foreclosure grew within these programs, the disproportionately Black and female purchasers received the blame, rather than the corrupt real estate industry. The eventual fallout—documented in widespread national media coverage—reinforced racist ideas about African Americans being irresponsible neighbors whose very presence hindered property values. It was also weaponized by the Nixon administration to put the nail in the coffin of Lyndon Johnson’s Great Society by holding these programs’ shortcomings up as evidence that government could only fail in attempts to solve the problems of urban poverty. “Only the market,” the new logic went, “could handle the gargantuan problems rooted in American cities.” The result was not only a diminished commitment to poor urban areas of color, but an aggressive shift toward policies like Section 8 that relied even more on the market to address problems of the urban core.

Taylor’s impassioned writing helps Race for Profit to by and large avoid becoming bogged down in intricate and obscure federal policy details. Additionally, unlike many works on federal policy making, Taylor weaves together analysis of these policies alongside absorbing—albeit often tragic—narratives about the effects they had on recipients. While Race for Profit would have benefited from greater exploration of the roles and effects poor Black women had in exposing these exploitative programs, the attention these women do receive helps recover a critical terrain on which African Americans fought for rights and resources in the 1970s.

While readers familiar with Taylor’s insightful political commentaries may wish she had included more discussion of how to address our current housing crisis, Race for Profit nonetheless offers a number of lessons for today’s policy makers and community development advocates. I’ll name just a few. For one, Race for Profit shows the failures of public policies being “guided by the objectives of private enterprise,” especially with an industry as riddled with racist practices and logics as real estate. Second, Taylor eviscerates the view prominent among racial liberals in the 1960s and 1970s—still common today—that markets are neutral spaces in which merely extending access can “bestow the political, economic, and social riches of American society.” Markets are, in fact, shaped by political, social, cultural, economic, and racial dynamics. Indeed, one of Taylor’s richest contributions is to illustrate how the real estate industry maximized its profits through continuing to cut off Blacks’ access to the suburban market while simultaneously inundating another market “with credit, capital, and indiscriminate access to distressed and substandard homes.”

Finally, Taylor’s work should cause us to question proposals to address poverty and racial inequities merely through greater access to homeownership. Given the continued “conflation of race and risk to property values” that results in Black homes being valued less and appreciating at lower rates than white homes, as well as ongoing discriminatory banking and real estate industry practices, Taylor explains that attempts to redress racial disparities only through homeownership risk reproducing—rather than undermining—these inequalities.

Race for Profit has already been awarded an array of professional awards, along with being named a finalist for both the National Book Award and the Pulitzer Prize in history. This praise is well deserved. Taylor’s gifted storytelling weaves together rich archival discoveries and perceptive historical and political analysis to craft a persuasive indictment about the failures of racial capitalism.

3 COMMENTS

  1. Excellent review. I look forward to reading the book which appears right on. I worked in leadership roles in HUD from 1970-2000 and saw first hand the excesses described. They are still going on today. The Low Income Housing Tax Credit Program which progressives seem to love has built a lot of affordable units, but the primary beneficiaries have been developers, syndicator, attorneys, bankers and consultants. Public Housing was originally sold in congress as a development program to stimulate the construction industry during the depression.

    I believe a guaranteed annual income targeted to low income people is the best answer.

  2. I too look forward to reading this book. We know that many HUD programs did not really help most of those who needed affordable housing. However there was one program that should not be overlooked – housing cooperatives. In San Francisco, over 2,000 units were created in Fillmore, Bayview and other districts. Redevelopment destroyed far more units than that, however, there are African-American families still living in SF at monthly costs that are 20% of the market. Co-op members run their own housing and it’s as close as most of us would ever come to owning our home in the Bay Area.

  3. Oddly enough, I came across these conclusions years ago, before I understood the impact of redlining. I did my MPA thesis on should rental vs homeownership be promoted for public housing residents. I found homeownership to be grossly overly promoted to public housing residents, figured out that many previous homeownership programs were scams, and that rental made much more sense for some, especially for the disabled. My advisors were furious with me that I wasn’t entirely pro-homeownership, kept having me doing more research, marked me down, and made me re-write it to the point that I knew it wasn’t true. However, time has proven my original thesis correct. I am glad that this is finally getting the attention that it deserves.

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